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Global and Local Connectivity and Spatial Development

Ejaz Ghani's picture

With William Kerr and Alexander Segura.

Developing countries have become much more globally integrated. On a global dimension, they now trade a lot more with other countries than they did two decades ago. Domestic connectivity at the country level has been helped through investments in road networks as urban and rural areas are becoming better connected not just through roads but phones lines and faster flows of knowledge.

How global and local connectivity influence spatial development and distribution of jobs is a tricky question. A naïve approach might look industry-by-industry at their exposure to trade or highways and ask what happens to the average wage in the industry as highways form.  This approach, however, risks confounding several forces.  It could be, for example, that a decline in the average wage represents a positive outcome if 1) those firms and workers who were already in the industry are experiencing wage growth, and 2) the industry overall expands to pull in workers from subsistence agriculture.  A declining average wage can signify the second factor is dominating the first factor, but this might be cause for celebration by policy makers rather than a source of concern.

Tales from the Development Frontier

Hinh T. Dinh's picture

How have China and other countries resolved the binding constraints in light manufacturing to create jobs and prosperity? This vital question is answered in a new book based on unprecedented access and detailed interviews at hundreds of Chinese firms in more than 15 cities (including the coastal regions that have fuelled the export boom), as well as visits to a dozen countries in Africa and Asia. The book, Tales from the Development Frontier: How China and Other Countries Harness Light Manufacturing to Create Jobs and Prosperity, focuses on labor-intensive manufacturing (apparel, leather goods, agribusiness, woodworking, and metal products). It is part of the Light Manufacturing in Africa Project being undertaken by a World Bank team in the Development Economics Vice Presidency. We draw from  analytical reviews, case studies, and the testimony of individual entrepreneurs to show how developing countries can grow manufacturing to create jobs and foster prosperity.

Kaushik Basu, the world economy, humility, and jobs

Merrell Tuck-Primdahl's picture

At his Sabanci lecture yesterday on ‘Emerging Nations and the Evolving Global Economy’, Kaushik Basu predicted that sluggish growth will likely prevail overall for the next two years, as the baton of economic growth is handed over from industrialized countries to developing countries. He cautioned that countries have bought time with liquidity injections and other stimulus measures, but that will not do anything to fix deeper structural problems.

To hear his talk, along with his views on the recent austerity debate that reached a fever pitch over the past 10 days, listen to the audio of the full lecture and question and answer session here.

Kaushik elaborated on some of his ideas for getting the world out of the current ‘time-buying’ phase in an April 23 piece in Project Syndicate op ed ‘Two Policy Prescriptions for the World Economy.’ Dani Rodrik was especially taken with Kaushik’s opening line that “One thing that experts know, and that non-experts do not, is that they know less than non-experts think they do.” This pointed to the hard truth that the austerity debate has revealed that policy setting in today’s world is a highly uncertain business and that humility should be the order of the day.

Chart: Good jobs for development are not the same everywhere

LTD Editors's picture

From the World Development Report 2013.

Looking through the jobs lens and focusing on the key features of the different country types can help identify more clearly the kinds of jobs that would make the greatest contribution to development in each case. This focus allows for a richer analysis of the potential tradeoffs between living standards, productivity, and social cohesion in a specific context.

Friday Roundup: China’s Cities, India’s healthcare, US jobs & the Fiscal Cliff

LTD Editors's picture

In “How Cities Can Save China” Henry Paulson, former US Treasury Secretary and current head of the Paulson Institute, argues in this week’s New York Times that better city planning will allow China’s investments to be more balanced, debt levels to be lowered, pollution to be eased, and a consumption windfall to be realized.

Chart: Jobs account for much of the decline in extreme poverty

LTD Editors's picture

From the World Development Report 2013.

Quantitative analysis confirms that changes in labor earnings are the largest contributor to poverty reduction. In 10 of 18 countries, changes in labor income explain more than half the reduction in poverty, and in another 5 countries, more than a third. In Bangladesh, Peru, and Thailand, changes in education, work experience, and region of residence mattered, but the returns to these characteristics (including labor earnings) mattered most. Just having work was not enough, given that most people work in less developed economies. What made a difference for escaping poverty was increasing the earnings from work.

 

Friday Roundup: Unemployment, Jobs, Sectors, and Rethinking Development

LTD Editors's picture

How do you measure unemployment? By counting the number of people looking for work but unable to find it. However, this measure overlooks people willing to work and not necessarily looking for jobs. In an interesting chart, The Economist illustrates how a broader measure makes unemployment in Europe look even worse
 

Jobs, plateaus, dividends, skills and data

Kaushik Basu's picture

Jobs have been at the center of my life since I took up my own new job as World Bank Chief Economist on October 1. This began within hours of my joining the Bank, when I participated in the press launch of the World Development Report 2013 on Jobs. Following that, my interactions at the Tokyo Annual Meetings of the World Bank and IMF also brought the jobs issue into high relief, with ministers and policymakers from around the world reacting to the WDR, especially in some of my corridor conversations with them.
 
I have a longstanding interest in labor-related issues, the role of labor laws, and on the impact of privatization on jobs. So I was pleased by the clairvoyance of the World Bank in choosing jobs as the topic for the 2013 World Development Report, much before the Bank knew that it would choose me to be the Chief Economist.

Friday Roundup: Manufacturing, Inequality, and the MDGs

LTD Editors's picture

For those of us following the US Election 2012, the words ‘manufacturing’ and ‘jobs’ are hard to miss. Building on that buzz, The Economist recently conducted a debate: “Will manufacturing return to the West?” While the US election is a good ten days away, the decision on this debate is out: Manufacturing will return to the west. Irrespective of the verdict, both the sides – opposing and defending the motion- have provided numerous insights in to the trends that are unfurling in China and US. Read them here.

Inequality, alongside jobs, is the proverbial elephant in the room amidst the US presidential elections. Joe Stiglitz has a new 'Campaign Stops' blog in the New York Times online that draws on The Economist magazine's special series from earlier this month. Stiglitz discusses the perils of underplaying the great divide between the one percent in the US and the middle class. Meanwhile, on the other side of the debate, Kevin Hasset of the American Enterprise Institute along with Aparna Mathur, write in the WSJ that inequality studies that focus mainly on pre-tax incomes are flawed because they overlook transfer payments such as food stamps, unemployment insurance and other safety net programs. Read the article here.

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