Overview

Good jobs are the surest pathway out of poverty. The developing world faces a jobs crisis that hampers efforts to end extreme poverty and boost shared prosperity with over two billion people of working age that are not participating in the labor force. Research shows that rising wages account for around 40% of the drop in poverty over the last decade. Among those who do participate in the labor market, around 200 million people are unemployed, including 75 million youth under the age of 25.

The developing world is confronted by a jobs challenge on three levels:

1. Creating around 40 million jobs per year over the next 15 years to increase employment rates and absorb the young people entering the labor force, particularly in Sub-Saharan African and South Asia. This means enhancing the conditions for private sector growth.

2. Increasing productivity of jobs across the spectrum of activities. There are two was to do this: create as many formal jobs as possible while also working to improve productivity and earnings of jobs in the informal sector. This requires a focus on informal sector jobs which are the major source of income for the poor, and in low-income countries, the majority of the population.  This might involve improving production technologies, investing in skills, and expanding access to markets.  At the same time, this requires not tilting incentives to remain formal or harming formal businesses with unfair competition. It is therefore also important to facilitate the movement of jobs from low to higher productivity activities, from the informal to the formal sector, from rural to urban areas.

3. Helping connect people to jobs. Not all workers have the same opportunities in the labor market. We must ensure that those who are able to work have the incentives to do so, and that they have skills that are required in today’s modern job market. We must also make sure that they have information about the types of jobs available, and the ability to move to the regions where jobs are created. 

But jobs are not all equally transformational. Some jobs are better than others at lifting the poor out of poverty or increasing the earnings of the bottom 40%. Jobs for women can change the way households spend money and invest in the education and health of children. In turbulent environments, jobs for young men can serve as an alternative to violence and help restore peace.

Just having a job is also not enough. What makes a difference in sustaining the escape from poverty is increasing the earnings from work; that is, having a more productive job. However, half of the world’s working population are farmers or self-employed. They work predominantly in low productivity activities such as farming a small plot of land, selling vegetables on the street, sewing clothes or jobs in urban areas that offer low earnings and little security. 

The World Bank Group continues to support job creation in fragile and conflict-affected states through a wide variety of operational approaches, bringing a focus on private sector-led growth and ensuring incentives from short-term interventions do not distort long-term development.

Last Updated: Mar 31, 2017

The World Bank Group supports a comprehensive approach, leverages resources across sectors and mobilizes global knowledge in addressing the jobs challenge.

Jobs strategies address specific social objectives in regional and sectoral contexts.

These address three main challenges most countries face: creating jobs in the formal sector of the economy; improving the quality of informal jobs; and facilitating access for vulnerable and marginalized groups to jobs.

To develop job strategies and projects, the World Bank Group identifies key challenges countries face including factors that preclude job creation in the formal sector or access to jobs; finds potential solutions to address these challenges; and develops methods to monitor and measure impacts of these solutions on jobs outcomes looking at improved earnings, labor productivity and employment rates. Key interventions include:

1. Macro and regulatory policies to create an enabling environment for investing in current and new enterprises and allowing them to grow and create jobs. These include: improving macroeconomic management and governance to dampen risks and uncertainty; upgrading business regulations and taxes on labor; removing barriers to entry; and/or reforming different parts of the financial sector to expand access to capital and insurance.

2. Labor regulations and active labor market programs to improve working conditions, expand access to social insurance, and facilitate labor market transitions—from inactivity and unemployment into jobs and from lower to higher quality jobs.

3. Targeted programs to create jobs by addressing sectoral and regional failures. These involve programs that promote entrepreneurship and support the development of small and medium enterprises in specific sectors or regions; programs to connect small informal producers - including farmers or own account workers - to formal value chains; or, more broadly, investments in infrastructure, information and communications technology, and basic services to support the development of secondary towns that can attract entrepreneurs, firms, and workers

The World Bank Group is completing in-depth Jobs Diagnostics in 20 countries, including five in fragile, conflict and violence-affected states -- analyzing the supply and demand side of the labor market to give a comprehensive assessment.  Jobs Diagnostics use macro, household, and firm data to understand key challenges faced by countries in creating jobs.

In addition, in-depth research is currently underway in key priority areas: addressing informality; empowering women through jobs; supporting job creation in fragile and conflict-affected areas; addressing jobs for youth; identifying opportunities for private-sector led growth; urbanization and job creation; and addressing migration. Findings will help inform country strategies in creating jobs.

Last Updated: Mar 31, 2017

The World Bank is currently working in over 30 countries, of which 16 are in the world’s poorest (IDA). Our work combines jobs diagnostics, sectoral pilots and evaluations, jobs strategies, and support to lending operations. Our work has supported job creation in the following countries:

A project in Solomon Islands has employed more than 12,000 young people from vulnerable communities and created over 664,000 work days.

In Ethiopia, more than 3,000 women have benefited from a special line of credit for female entrepreneurs backed by the World Bank’s fund for the poorest countries, IDA.

In Nigeria, some 16,000 youth were employed through road construction projects. Almost 50% of beneficiaries are women.

A project in China, provided skills training to 522,628 young people, most of whom were from the rural areas, provided employment services for over 4.2 million job seekers, creating employment opportunities for rural migrant workers.

Last Updated: Mar 31, 2017

The World Bank engages with partners in developing methods and tools that assess the direct and indirect impacts of interventions on job creation. Through the Let’s Work Partnership, the World Bank and its partners provide support in implementing interventions through country pilots – developing a job creation strategy in 7 pilot countries -- and working to improve data, methodologies and analysis.

The World Bank is also part of an – Solutions for Youth Employment (S4YE) – to address the youth employment crisis. Launched in 2014, S4YE is a global coalition of civil society actors, government officials, foundations, private sector entities, international organizations, and young people that seeks to fill the gap in youth employment. S4YE launched its five-year strategy that will support employment and productive work for 150 million youth by 2030. Through its inaugural report: Toward Solutions for Youth Employment, the coalition highlighted the urgency and challenges of providing jobs to over 620 million young people that are unemployed. The report provides clear evidence that investments in youth employment that focus on innovation and collaboration pay off.

In addition, the World Bank administers the Jobs Umbrella Multi-Donor Trust Fund, whose objective is to improve opportunities for workers worldwide by promoting private sector-led job creation. Activities funded include data collection and implementation tools; design of integrated job strategies across countries; and the creation of partnerships between development practitioners and the private sector. 

Last Updated: Mar 31, 2017


Focus on Jobs

2013 World Development Report (WDR)

The WDR 2013 has made jobs a key policy priority, stressing the role of strong private sector-led growth in creating jobs that do the most for development.






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