Good jobs are the surest pathway out of poverty. Over the last decade, rising labor incomes accounted for around 40% of the drop in poverty worldwide; the other important factor reducing poverty is smaller family sizes, which are also often linked to people getting better jobs.
But the developing world faces a jobs crisis that hampers efforts to end extreme poverty and to boost shared prosperity. Over two billion working age people are out of the labor market, and over 65% of workers — which add up to another two billion people— work in low-productivity jobs and do not earn enough to escape from poverty.
So, the challenges of finding Pathways to Better Jobs are at the heart of the development challenge of low-income countries. The main challenges are:
1. Creating more jobs. Over the next 15 years around 600 million jobs are needed to absorb the youth entering the labor market. The great majority of those jobs will need to be in the private sector.
2. Increasing the quality of jobs. Just having a job isn’t enough. In fact, in low income countries, most people already work. The problem is that they have bad jobs that produce low incomes. What makes a difference is having a more productive job, with better working conditions. As well as creating as many formal sector jobs as possible, it is also crucial to improve the productivity and earnings of jobs in the informal sector—which are the main source of income for most people in low-income countries.
3. Connecting people to jobs. Not all workers have the same opportunities: women, youth, and the poorest families are disadvantaged in the labor market. Low female labor force participation is a key challenge. We must work to eliminate the multiple barriers that prevent disadvantaged workers from acquiring the skills they need and accessing better jobs.
Last Updated: Apr 01, 2019