Despite sluggish growth, labor markets in developing countries continue their gradual recovery from the global financial crisis. Although there was a small acceleration in the median growth rate of wages, in sharp contrast to the dynamics observed during the first half of 2012, employment growth slowed down and the unemployment rate increased slightly. Most of the slowdown in employment growth took place in Asia and, particularly, in Latin America. Even in countries where employment continued to expand—Brazil, Turkey, and Romania—either the unemployment rate increased or wages fell. These outcomes can be explained in part by the slowdown in economic growth starting in the second half of 2012. The weak global recovery and uncertainty regarding fiscal and monetary policies in the United States and Europe could aggravate current trends. More than 1 billion people worldwide are marginally employed in low-income or informal jobs. Labor market outcomes are particularly worrisome for youth. Youth unemployment rates are up to three times higher than for adult workers and an estimated 260 million—around 40 percent in the Middle East and North Africa region—are out of the labor force and are not studying.
The Bank’s job creation initiatives coordinate efforts on macroeconomic policy, the investment climate, industrial development, innovation and entrepreneurship, private-sector development, labor regulations, education and skills, and social protection. To help countries meet their job-related challenges, the Bank is providing technical assistance as well as lending and investment, building an evidence base for successful initiatives, and promoting cross-country learning.
From FY11 to FY13, the WBG supported 1.5 million new labor market program beneficiaries, 731,000 of which are female.
El Salvador: Income Support and Employability Project [IBRD]. The Temporary Income Support Program (PATI) in El Salvador, financed by a US$50 million IBRD loan, guarantees a minimum level of income to poor urban families while providing a labor market experience. The project had the following cumulative results since being approved in FY10:
- 24,841 individuals received PATI income support, 72.3 percent of which are female.
- 17,449 18-25 year olds without secondary education have enrolled in National Employment Network (Red Nacional de Empleo – RNE).
Dominican Republic: Youth Development Project [IBRD]. This project closed in FY13 and had the following results over the life of the project:
- 38,000 beneficiaries participated in employer demand-driven job training courses. About 95 percent of these beneficiaries were from the poorest areas of the Dominican Republic and 58 percent were women.
- A total of 3,920 low-income, unskilled unemployed youth received training and employment from the temporary employment program.
- 72 percent of the Youth Employment Program graduates were employed or self-employed six months after program completion.
- 3,002 private firms offered internships as a result of the program.
- 3,965 and 29,288 additional beneficiaries participated in the Adult Basic Education (EBA) and Adult Secondary Education (PREPARA) second chance education programs respectively. 51 percent of these beneficiaries are female and 76 percent are from the poorest 40 percent of households.
Papua New Guinea: Urban Youth Employment Project. A US$16.7 million IDA loan and WBG technical assistance is helping the National Capital District Commission to implement the Urban Youth Employment Program. Since project approval in January 2011:
- 3,500 youth have been selected to participate in the project. Out of these, 2,800 have completed the five-day Basic Life Skills Training; 1,200 have participated in the Youth Job Corps intended to generate short-term employment and 800 have been engaged in one of the two Pre-Employment Training schemes, of which 500 have already graduated.
- The On-The-Job Training component, which aims to provide more in-depth skills and longer-term employability, continues to build momentum, and the number of job placements has increased to 240 (from 115 in April 2013), with about 80 employers. About 60 of these youth have already secured longer-term employment with employers.