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Overview

  • Good jobs are the surest pathway out of poverty. In recent years, rising labor incomes directly accounted for around 40 percent of the drop in poverty worldwide. The other important factor, smaller family sizes and falling dependency ratios, is also closely linked to people getting better jobs. But the developing world faces a jobs crisis. In low-income countries, over 90 percent of workers are in low-quality, low-productivity jobs (self-employed or informal wage jobs). So, the challenge of finding Pathways to better Jobs is at the heart of the development challenge for low-income countries.

    The disruptive impact of the COVID-19 crisis on workers, labor markets, and livelihoods has further underlined the importance of the jobs agenda.

    By July 2020, up to a third of workers in developing countries had lost their jobs or faced pay cuts. The crisis is unlikely to be limited to a “V-shaped” dip produced by the temporary need to contain the pandemic. The global economy may confront a “U-shaped” recession or even an “L-shaped” depression, with a protracted period of weak labor demand. Governments have responded quickly to address the immediate jobs challenges of COVID-19, by using (i) liquidity support for firms, (ii) wage subsidies to retain jobs; and (iii) income support for the unemployed and vulnerable households. But they will also need to address the medium and long-term effects of the pandemic by stimulating job creation, re-employment, and economic inclusion. And they’ll have to do so in a world beset by disruptive technological change and shifting patterns of demand. There is also an urgent need to strengthen health and social protection systems to provide robust universal coverage and reduce their dependence on financing through labor taxes, which creates disincentives to the growth of formal jobs.   

    To tackle the jobs crisis, governments in developing countries need to address two main challenges:

    1. To create better jobs that increase productivity and earnings for the growing workforce. The world’s working-age population will increase by about 700 million people between 2019 and 2035. Assuming no change in women’s and men’s respective participation rates of 50 and 80 percent, this means that an additional 470 million people will be seeking work – most of them in the private sector. Most people in low-income countries work, because they have no alternative. The problem is that many of these jobs produce low incomes and are insufficient to help them climb out of  poverty. Some  also face unsafe or abusive working conditions. The central challenge is to create more productive jobs with higher incomes and better working conditions. While it is important to boost formal sector jobs, it is also crucial to improve the productivity and earnings of informal sector jobs — which are the main source of income for most people in low-income countries — by connecting them to markets on more favorable terms.

    2. To support access to better jobs for disadvantaged groups, such as: youth, women, minority groups, people with disabilities, and displaced populations. That means working to eliminate the multiple barriers that prevent disadvantaged workers from acquiring the skills they need and accessing better jobs. Low female labor force participation is a key challenge.

     

    Last Updated: Mar 01, 2021

  • Jobs Diagnostics and Strategies: We help countries identify jobs challenges by analyzing their macroeconomy, labor market, and private sector growth, compared with international benchmarks. Jobs Diagnostics (JDs) highlight the market and policy inadequacies that hamper private investment and job creation and propose ways to correct them. Our JD findings are integrated into our Strategic Country Diagnostics (SCDs) and Country Economic Memoranda (CEM), which inform our Country Partnerships Frameworks (CPFs). JDs draw on the Jobs Indicators (JOIN) database, a global statistical resource curated by the Jobs Group. JOIN data are also widely used in other World Bank reports, briefings, and blogs. In 2019 we made JOIN available to users outside the Bank; launched a course with hands-on training on JD tools and techniques for developing country governments and other donor agencies; and created a Jobs Diagnostics and Solutions Community of Practice.

    Operationalizing support for jobs transformations: The World Bank Group finances investment operations which are relevant to improving jobs outcomes. We do this through IDA and IBRD policy lending, lending for results and investment lending, and IFC investment operations. In 2019, our jobs-related projects reached almost 10 million beneficiaries, including 6.5 million in IDA countries and 3 million female beneficiaries. Key points of entry include: macroeconomic and regulatory reform; finance sector development and infrastructure programs which enable better opportunities for private investment; support to agricultural value chains that link farmers to markets on more favorable terms; targeted programs to support private sector development (e.g. Special Economic Zones and SME development programs); spatial development programs that create spaces for better jobs and help workers access them (e.g. secondary city development); environment programs (e.g. the promotion of “green jobs” ); and human capital programs (education, training, active labor market policies, and social protection).

    Knowledge and research for solutions: As well as supporting the implementation of established good practices, we also mobilize global knowledge and support cutting-edge research on jobs challenges, such as: how to promote private investment and firms’ growth (especially in labor-intensive sectors); how to link independent producers to product and financial markets so they can raise their productivity and earnings; how to reform social protection systems to cover informal workers and reduce barriers to the growth of formal jobs; how to support well-managed domestic and international labor mobility toward places with higher jobs potential; and how to help disadvantaged groups to get the skills and jobs they need, through improved training systems and active labor market policies.

    The Jobs Group provides standardized methods, tools, and guidelines to enhance jobs diagnostics, strategies, and operations that improve our understanding of what works and how it can be taken to scale. We use pilots accompanied with rigorous evaluations to test proposed solutions. The Jobs Group also designs monitoring and evaluation (M&E) tools to support jobs lending operations and reports on the WBG portfolio of jobs-related projects.

    Last Updated: Mar 01, 2021

  • The World Bank Group has responded strongly to client countries’ demands for support to generate better jobs for poor people. As of November 2020, the World Bank has 580 active projects with a jobs theme, with investments of approximately US$86 billion. This represents 29 percent of our lending portfolio and is spread across all regions and fifteen Global Practices. A growing share of the investment projects use results-based designs. All our projects have results frameworks which specify the relevant outputs and, in many cases, incorporate rigorous impact evaluations. A few examples include:  

    • In Madagascar, Integrated Growth Poles and Corridor lending operations (FY06–14, FY14–19, FY19–23) have resulted in increases in private sector investment, jobs, and increased business and farm-level revenues. By 2020 the projects helped to increase the price paid to cocoa farmers by 50 percent; mobilized US$80 million in private sector investments in tourism and US$40 million investment to the national airline (Air Madagascar); built strong youth entrepreneurship networks in three poles; sustained a boost to cities and rural towns by providing enabling infrastructure (energy, water, sanitation, and roads): and increased tax collections of municipalities by 141 percent.
    • In Pakistan, the Punjab Skills Development Project (FY15–21) supports a twofold approach to improving the employability of Punjab’s youth, focused on policy reform and strengthening the delivery of demand-driven skills, including mechanical, electrical, plumbing, auto-mechanical, and culinary skills. By 2018, more than 30 competency-based learning assessments in priority sectors were developed and 16,000 graduates were trained, with contributions from at least 80 public and private institutes. Twelve public private agreements were signed with industry partners for market-based skills trainings with more than 800 students trained. The project increased access to market-relevant trades offered by public and private sector training providers, enrolling 52,000 students.
    • In Honduras the Rural Competitiveness Project led to an increase in productivity and competitiveness among organized rural small-scale farmers through their participation in productive alliances- a mechanism through which producers can participate in value chains that will help them improve their productivity by giving them better and more equitable access to markets, technologies, and organizations. By 2020, the project led to a 30% increase in land and labor productivity of participating rural producers. The project also helped farmer organizations in identifying business opportunities, developing business plans and providing competitive grants to implement them. The project has reached 12,788 farmers (including 1,397 women and 1,158 indigenous people). 155 productive alliances are under implementation and 259 farmer organizations have an approved business plan. The project has also mobilized $5 million for the development of farmer organizations.

    Last Updated: Mar 01, 2021

  • Partnerships are central to our engagement in the jobs agenda. Some of our key partnerships are:

    The Jobs Umbrella Multi-Donor Trust Fund (MDTF), established in 2014 to support the World Bank Group’s jobs strategy to contribute to poverty reduction and inclusive growth. The Jobs MDTF is supported by six bilateral donors. So far, it has financed 103 grants in 40 countries, as detailed in the recently published Jobs MDTF Annual Reports (2019 and 2020). The Jobs MDTF has now moved into a second phase (2021-2025), which will focus even more on operationalizing jobs interventions at scale, with a special attention on the medium- and long-term labor market effects of the COVID-19 crisis. As of December 2020, the Jobs MDTF has raised $17 million towards its $50 million Phase II fundraising goal. The recently launched Supporting Effective Jobs Lending at Scale (SEJLS) program focuses on leveraging large-scale WBG operations, strengthening the consistency of the design of jobs-relevant components and the estimation of jobs outcomes in the results framework.  

    Solutions for Youth Employment (S4YE) is a coalition of the private sector, public institutions, and civil society focused on improving jobs outcomes for young people.  During the last two years, S4YE made major advances. It established an advisory committee of 35 private companies and a Youth Advisory Group from across the developing world who contribute to S4YE’s governance, operations, and knowledge work. It expanded its “Impact Portfolio” of youth jobs projects; set up a community of practice for task managers of youth jobs projects across different World Bank GPs and the IFC; and established seven expert working groups on youth jobs challenges across the WB, IFC, and the private sector.

    Let’s Work is a global partnership encompassing over 25 private sector organizations, International Financial Institutions, Multilateral Development Banks, and bilateral donors focused on supporting private sector-led job growth.

    The Knowledge Partnership on Migration and Development (KNOMAD) generates evidence to assist policymaking around migration and labor mobility. It works with panels of global experts on different aspects of the migration challenge. In FY20 KNOMAD prepared an influential report on Leveraging Economic Migration for Development. In April 2021 KNOMAD’s report on COVID-19 through a Migration Lens projected a 20 percent fall in remittance flows to developing countries in 2020, focusing global attention on this crucial issue. KNOMAD contributes to SDG target 8.8: Protect labor rights and promote safe and secure working environments of all workers, including migrant workers, particularly women migrants, and those in precarious employment and is a custodian of two indicators for SDG 10.7: Facilitate orderly, safe, and responsible migration and mobility of people, including through implementation of planned and well-managed migration policies.

     

    The Jobs Group also works with key external partners engaged in aspects of the jobs agenda, such as the International Labor Organization (ILO), Institute of Labor Economics (IZA), the G20 Employment Working Group, International Trade Unions Confederation (ITUC), and the Network on Jobs and Development, among others.

    Last Updated: Mar 01, 2021

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INFOGRAPHIC Oct 20, 2015

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