Overview

Good jobs are the surest pathway out of poverty. They are central to ending extreme poverty and boosting shared prosperity.  The developing world faces a global jobs crisis that hampers efforts to end extreme poverty and boost shared prosperity.  For the poor and vulnerable, jobs are the main way to improve their standard of living and climb out of  poverty. Research shows that rising wages account for 30 to 50% of the drop in poverty over the last decade. However, over two billion people of working age are not participating in the labor force. Most of these are women. Among those who do participate, around 200 million people are unemployed, including 75 million youth under the age of 25. Furthermore, 600 million new jobs are needed globally over the next fifteen years to keep employment rates stable and to keep up with population growth.

Creating more, better and more inclusive jobs is central to the development agenda.

Today, 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 a growing number of young people entering the labor force, particularly in Sub-Saharan African and South Asia. This, to a large extent, involves creating the conditions for the creation and growth of private sector business.

2.    Increasing productivity of jobs across the spectrum of activities.  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 at lifting the poor out of poverty or increasing the earnings of the bottom 40%.  Some jobs also provide wider benefits than others.  For instance, jobs for women can change the way households spend money and invest in the education and health of children. Jobs in cities support greater specialization and the exchange of ideas,making other jobs more productive. In turbulent environments, jobs for young men can provide alternatives 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—two thirds of whom are poor—are farmers or self-employed. They work predominantly in low productivity activities such as working a small plot of land, selling vegetables on the street, sewing clothes or offering a range of services in urban areas that offer low earnings and little security. 

Productivity-driven, private sector-led growth is the cornerstone of job creation in all countries. Expanding structural transformation; addressing the spatial mismatches of people and jobs; addressing, jobs for youth; and supporting women’s economic empowerment are needed to create more and better jobs, and to ensure job creation is inclusive.

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: Dec 02, 2016

The World Bank Group supports an integrated and comprehensive approach, leveraging resources across sectors and mobilizing global knowledge in addressing the jobs challenge.

Jobs strategies address specific social objectives, looking at regional and sectoral contexts. This involves coordinated interventions at three levels:

1.    Focus on fundamentals - macroeconomic stability, an enabling business environment, investments in human capital and the rule of law are necessary conditions for investment, job creation, and the movement of resources from low to high productivity sectors.   

2.    Institutions that protect workers and connect them to jobs.  Ensuring that workers can manage risks associated with employment, have proper working conditions, and facilitating transitions from inactivity or unemployment to work, and from low to high-paying jobs.

3.    Broadening beyond labor policies to include sectoral/regional interventions that promote private investments and job creation. Often the constraints to investments and job creation operate at the local level and are sector specific.  Addressing these constraints would require coordination between different actors and ministries (finance, trade, industry, agriculture among others).  

Measuring and evaluating evidence on the effectiveness of existing interventions as well as new approaches are critical in addressing the jobs challenge. The World Bank Group is working to address gaps on what works including:

  • Evaluating current evidence and knowledge to extract lessons learnt; 
  • Identifying the key evidence gaps with regards to policy design and program management to achieve better jobs-related outcomes;
  • Developing an evaluation strategy that identifies how best the WBG and its development partners can support positive job effects.

The World Bank Group is also conducting in-depth Jobs Diagnostics in 15 countries, including five in fragile, conflict and violence-affected states -- analyzing both the supply and demand side of the labor market to give a comprehensive assessment of the opportunities and challenges for job creation.  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 private-sector led growth; and understanding spatial mismatches of people and jobs. Findings will help inform country strategies in creating jobs.

Last Updated: Dec 02, 2016

The World Bank’s 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: Oct 03, 2016


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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