More and Better Jobs?
The region has created just under 800,000 jobs per month during the past two decades. The ranking among five of the larger countries in the region, from the highest to the lowest by growth of employment—Pakistan, Nepal, Bangladesh, India, Sri Lanka—coincides with their ranking by growth of the working-age (15-64) population. The quality of jobs—measured in terms of higher wages for wage workers and lower poverty for the self-employed—has been improving, thanks to strong economic growth in some countries during the last three decades and massive out-migration and workers’ remittances elsewhere.
The Employment Challenge
But there is absolutely no room for complacency. South Asia will add between 1 million and 1.2 million new entrants to the labor force every month for the next two decades, the latter if female participation in the labor force rises at the pace observed in some East Asian countries. This is between 20 to 50 percent higher than the average between 1990 and 2010. Absorbing them into the labor force at rising levels of output per worker is the crux of South Asia’s employment challenge.
A Cross-Cutting Reform Agenda
Meeting the employment challenge calls for a reform agenda that cuts across sectors. Most important is enhancing access to reliable electricity supply for firms in both urban and rural settings, through a combination of new investment, tariff adjustment and improved governance of the power sector. Corruption in dealings between firms and the state, especially in transactions with the public utilities and tax administration, is also a major constraint to firms’ expanding employment. High on the policy agenda is a focus on better nutrition in early childhood in order to arrest irreversible cognitive impairment before children get to school. Improving the quality of education at all levels to equip workers with skills relevant for the world of work is important. Protecting workers in both informal and formal sectors to help deal with labor market shocks rather than protecting jobs for the few workers in the formal sector through restrictive labor legislation, should be a priority.
A Conflict-Affected Region
Recognizing that South Asia is the most conflict-affected of the major regions in the world, this book also includes a chapter on how the challenges of job creation are magnified in such environments as well as some priorities going forward for labor market policies and programs.