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Labor and Social Protection

Does emigration really increase the wages of non-emigrants?

Alessio Brown's picture

Although immigration and its effect on labor markets in receiving countries is a frequent focus of research and public concern, there is less known about the impact of emigration on sending countries. Yet, as Benjamin Elsner explains in his recent study for IZA World of Labor, emigration actually has positive and large effects on wages in sending countries. 

Does competition create or kill jobs?

Klaus Tilmes's picture

Greater competition is crucial for creating better jobs, although there may be short term tradeoffs.

Job creation on a massive scale is crucial for sustainably ending extreme poverty and building shared prosperity in every economy. And robust and competitive markets are crucial for creating jobs. Yet the question of whether competition boosts or destroys jobs is one that policymakers often shy away from.

It was thus valuable to have that question as a central point of discussion for competition authorities and policymakers from almost 100 countries – from both developed and developing economies – who recently gathered in Paris for the 14th OECD Global Forum on Competition (GFC).

According to World Bank Group estimates the global economy must create 600 million new jobs by the year 2027 – with 90 percent of those jobs being created in the private sector – just to hold employment rates constant, given current demographic trends.
Yet the need goes further than simply the creation of jobs: to promote shared prosperity, one of the urgent priorities – for economies large and small – is the creation of better jobs. This is where competition policy can play a critical role.
Competition helps drive labor toward more productive employment: first, by improving firm-level productivity, and second, by driving the allocation of labor to more productive firms within an industry.
Moreover: Making markets more open to foreign competition drives labor to sectors with higher productivity – or, at least, with higher productivity growth. Making jobs more productive, in turn, generally increases the wages they command.
That’s in addition to cross-country evidence on the impact of competition policy on the growth of Total Factor Productivity and GDP, and the fact that growth tends not to occur without creating jobs. Thus there’s compelling evidence that – far from being a job killer, as skeptics might fear – competition (over the long term) has the potential to create both more jobs and better jobs.

The key question then becomes whether such long-term benefits must be achieved at the expense of short-term negative shocks to employment – especially in sectors of the economy that may experience sudden increases in the level of competition.
Progress toward better jobs is driven partly by the disappearance of low-productivity jobs, as well as the creation of more productive jobs in the short run. Competition encourages that dynamic through firm entry and exit, along with a reduction in “labor hoarding” in firms that have previously enjoyed strong market power.

Cities: The new frontier of social protection

Keith Hansen's picture
photo: Dominic Chavez/World Bank

​Consider this: By the time you had breakfast this morning, the world’s urban population grew by some 15,000 people. This number will increase to 180,000 people by the end of the day and to 1.3 million by the end of the week. On a planet with such a vast amount of space, this pace of urbanization is like crowding all of humanity into a country the size of France.

Cities are where most of the world’s population lives, where more and more of population growth will occur, and where most poverty will soon be located. 

But why do so many people choose cities? Poor people constantly pour into Rio de Janeiro and Nairobi and Mumbai in search of something better. The poorest people who come to cities from other places aren’t irrational or mistaken. They flock to urban areas because cities offer advantages they couldn’t find elsewhere.  The poverty rate among recent arrivals to big cities is higher than the poverty rate of long-term residents, which suggests that, over time, city dwellers’ fortunes can improve considerably.

Madagascar: Expanding the bandwidth of the extreme poor

Andrea Vermehren's picture
​Photo: Laura B. Rawlings / World Bank

It is 8 AM. The winter sun begins to appear over the gray-green mass of trees above the village of Tritriva in Madagascar’s central highlands. The courtyard of a stone church is already filled with women, many holding still-sleeping children in their arms. They have assembled for the first time in two months to receive a cash payment from the Malagasy state.

The women are poor and all live on less than $2 per day. The money they receive from the government amounts to about a third of their cash income for the two months in between each payment: it will go a long way in helping them support their families for the rest of the winter.
Initiated by the Madagascar government,  with support from the World Bank, the payments are part of a new program implemented by the Fonds d'Intervention pour le Développement (FID) to combat poverty in rural Madagascar and provide sustainable pathways to human development.

Making cities competitive – What will it take?

Megha Mukim's picture

Cities are the future. They are where people live and work. They are where growth happens and where innovation takes place. But they are also poles of poverty and, much too often, centers of unemployment.

How can we unleash the potential of cities? How do we make them more competitive? These are urgent questions. Questions, as it turns out, with complex answers – that could potentially have huge returns for job creation and poverty reduction.

Cities vary enormously when it comes to their economic performance. While 72 percent of cities grow faster than their countries, these benefits do not happen uniformly across all cities. The top 10 percent of cities increase GDP almost three times more than the remaining 90 percent. They create jobs four to five times faster. Their residents enjoy higher incomes and productivity, and they are magnets for external investment.
We’re not just talking about the “household names”among global cities: Competitive cities are often secondary cities, many of them exhibiting success amidst adversity – some landlocked and in lagging regions within their countries. For instance, Saltillo (Mexico), Meknes (Morocco), Coimbatore (India), Gaziantep (Turkey), Bucaramanga (Colombia), and Onitsha (Nigeria) are a few examples of cities that have been competitive in the last decade.
So how do cities become competitive? We define competitive cities as those that successfully help firms and industries create jobs, raise productivity and increase the incomes of citizens. A team at the World Bank Group spent the last 18 months investigating, creating and updating our knowledge base for the benefit of WBG’s clients. In our forthcoming report, “Competitive Cities for Jobs and Growth,”* we find that the recipe includes several basic ingredients.

In the long term, cities moving up the income ladder will transform their economies, changing from “market towns” to “production centers” to “financial and creative centers,” increasing efficiencies and productivity at each stage. But economic data clearly shows there are large gains to be had even without full-scale economic transformation: Cities can move from $2,500 to $20,000 in per capita income while still remaining a “production center.”  In such cases, cities become more competitive at what they already do, finding niche products and markets in tradable goods and services. Competitive cities are those that manage to attract new firms and investors, while still nurturing established businesses and longtime residents. 
What sort of policies do competitive cities use? We find that leading cities focus their energies on leveraging both economy-wide and sector-specific policies. In practice, we see how successful cities create a favorable business climate and target individual sectors for pro-active economic development initiatives. They use a combination of policies focused on cross-cutting issues such as land, capital markets and infrastructure, while not losing focus on the needs of different industries and firms. The crucial factor is consultation, collaboration and partnerships with the private sector. In fact, success also involves building coalitions for growth with neighbors and other tiers of government.

In Lima, inequality debate focuses on women, youth, and taxes

Donna Barne's picture
Paraisopolis, São Paulo, Brazil. © Tuca Vieira

​Can we end extreme poverty in a world with extreme inequality? That question inspired a spirited debate in English and Spanish on Oct. 7, just ahead of the World Bank Group-IMF Annual Meetings in Lima, Peru, addressing corruption, taxation, discrimination against women, and the need to even the playing field for the younger generation.

Latin America’s experience with inequality was front and center at the live-streamed event, Inequality, Opportunity, and Prosperity, featuring World Bank Group President Jim Yong Kim, Ibero-American Secretary General Rebeca Grynspan, Oxfam International Chair Juan Alberto Fuentes Knight,  and moderated by CNN Español news anchor Patricia Janiot.

Message for Latin America: Protect social gains and jobs amid slowdown

Donna Barne's picture

The economic slowdown in Latin America and the Caribbean is putting pressure on workers and wages and forcing some people out of the labor force, according to a new report released during a live-streamed event of the same name, “Jobs, Wages, and the Latin American Slowdown,” in the lead-up to the World Bank Group-IMF Annual Meetings in Peru.

“A lot of women joined the labor force in the good times. Now, in the slowdown, people are exiting the labor force — men and youth with little education. This is good news if they’re going to university, but bad if they’re going to live with their parents and be idle,” said Augusto de la Torre, the World Bank’s chief economist for Latin America and the Caribbean.

Moreover, the “exit of youth from the labor force will affect poor families more than wealthier ones – inequality could become greater,” said de la Torre.

Sustainable Development Goals and Open Data

Joel Gurin's picture
Sustainable Development Goals. Source:

The United Nations (UN) has developed a set of action-oriented goals to achieve global sustainable development by 2030. The 17 Sustainable Development Goals (SDGs) were developed by an Open Working Group of 30 member states over a two-year process. They are designed to balance the three dimensions of sustainable development: the economic, social and environmental.

To help meet the goals, UN member states can draw on Open Data from governments that is, data that is freely available online for anyone to use and republish for any purpose. This kind of data is essential both to help achieve the SDGs and to measure progress in meeting them.
Achieving the SDGs
Open Data can help achieve the SDGs by providing critical information on natural resources, government operations, public services, and population demographics. These insights can inform national priorities and help determine the most effective paths for action on national issues. Open Data is a key resource for:
  • Fostering economic growth and job creation. Open Data can help launch new businesses, optimizing existing companies’ operations, and improve the climate for foreign investment. It can also make the job market more efficient and serve as a resource in training for critical technological job skills.

Heading to #UNGA? Read how to make the #SDGs a success

Mariana Dahan's picture

As you are on your way to UN General Assembly for the official launch of the SDGs, read this: approximately 2.4 billion people in the world today lack official identification (ID), including children up to the age of 14 whose birth has never been registered and many women in poor rural areas of Africa and Asia.

Being able to prove one’s identity is more than a convenience; it is based on fundamental human rights and extending it to the disenfranchised is also instrumental in achieving many of the other SDGs. SDG 16.9 aims to “provide legal identity to all, including birth registration, by 2030,” and represents the first time that documenting identity has been officially stated as a global goal. The international community should join forces to achieve this goal, as attaining it will also be a key enabler of many other SDGs.

Did we get the ‘old-age dependency’ of aging countries all wrong?

Johannes Koettl's picture
Photo by Brookings

We have all seen the numbers before: Over the coming decades, many countries in the developed and developing world alike will significantly age. One particular number to describe this development is the “old-age dependency ratio.” It measures the number of those aged above 65 years (currently defined as old age) as a share of those between 15 to 64 years (currently defined as working age). In other words, this ratio tells us how many retired people a potential worker has to sustain. With global aging, it will deteriorate dramatically in most countries over the coming decades. This raises serious concerns about the sustainability of pension systems.