New insights for assessing and improving job quality in developing countries

International frameworks, such as the World Bank’s 2013 World Development Report, the International Labour Organization’s Decent Work Agenda, the OECD’s Job Quality Approach, and the UN’s Sustainable Development Goal 8, have long highlighted the essential attributes of “good jobs.” These include earnings, benefits, job stability, and working conditions.

However, until recently, no globally harmonized, micro-data-based measure of multi-dimensional job quality existed. This gap has now been addressed by identifying key indicators associated with the desired characteristics of good jobs across countries. These indicators cover four dimensions: earnings, benefits, stability, and working conditions (see Figure 1).
 

Figure 1. Job Quality Measure

^{Source: World Bank}

This new Job Quality Measure (JQM) evaluates wage employment across 40 developing countries, representing a range of regions and income groups (see Figure 2). The JQM allows for comparisons of overall job quality and its individual dimensions, not only between countries, but also within countries—across locations, economic sectors, and socio-demographic groups such as women and youth (see Brummund, Mann, and Rodriguez-Castelan, 2018, for a Latin America application). In this blog, we present three key findings on job quality in developing countries.
 

Figure 2. Global Distribution of Job Quality

^{Source: Hovhannisyan et al., 2022
Note: Map shows countries included in the study and the distribution of aggregate country-level Job Quality Measure values.}
 

1. Variation in Job Quality Across Countries and Dimensions

Job quality varies significantly across countries, particularly in the dimensions of benefits and stability (see Figure 3). The benefits dimension includes employment perks that protect workers from various shocks, such as health insurance, pension contributions, social security, and paid leave. The stability dimension, meanwhile, includes indicators such as job tenure, written contracts, permanent positions, and formal employment.

While income and working conditions are also important, they tend to vary less across countries. In general, most salaried workers in developing countries earn enough to lift an average family out of poverty and enjoy decent working conditions (Figure 3). These dimensions are likely more relevant for self-employed workers, who are not included in this analysis due to data limitations.
 

Figure 3. Job Quality Measure and its Dimensions Across Countries

^{Source: Hovhannisyan et al., 2022}
 

2. Job Quality Gaps by Demographics

Job quality tends to be lower for women, youth, rural workers, and individuals with lower educational attainment. The most significant gaps are observed between workers with varying levels of education. Workers with secondary education have an average JQM score 30% higher than those with primary education, while those with tertiary education score 26% higher than those with secondary education and 63% higher than those with only primary education.

The JQM scores also show that high-skilled workers generally experience better job quality across all dimensions, with particularly notable differences in benefits. Additionally, urban workers’ job quality closely mirrors that of prime-age workers, while rural workers, especially youth, face lower job quality (see Figure 4).
 

Figure 4. Job Quality Measure by Sex, Education, Location, and Age

^{Source: Hovhannisyan et al., 2022}
 

3. Sectoral Disparities in Job Quality

Certain sectors offer significantly higher job quality than others. Finance, business services, public administration, and utilities stand out as sectors with superior job quality, particularly in benefits and stability (Figure 5). In contrast, lower-skill sectors like agriculture and construction have the lowest job quality scores. Agricultural wage workers, for example, score poorly across all dimensions except for working conditions, while construction workers face the greatest challenges in benefits and stability.
 

Figure 5. Job Quality Measure by Sector and Education

^{Source: Hovhannisyan et al., 2022}
 

Why this Measure Matters

The JQM is a valuable tool for assessing and improving job quality in developing countries. It evaluates various aspects of job quality, including wages, job security, working conditions, and access to benefits. Here are some applications of the JQM:

1. Policy Design and Implementation: Governments and international organizations can use the JQM to design targeted policies addressing specific job quality issues, improving wages, job security, and working conditions, especially for vulnerable groups.
2. Monitoring and Evaluation: The JQM helps monitor and evaluate job-related interventions, allowing policymakers to track progress and adjust measures to achieve desired outcomes.
3. Identifying Vulnerable Populations and Lagging Sectors: The JQM identifies vulnerable populations, lagging sectors, and underperforming regions, aiding in tailoring policies and directing investments where needed most.
4. Understanding Key Determinants of Job Quality: The JQM highlights factors influencing job quality, such as the local business environment, regulatory frameworks, and fiscal policies, essential for shaping public policies and assessing private investments' welfare impacts.
5. Research and Analysis: Researchers can use the JQM to study job quality trends and their impact on economic development.
6. International Comparisons: The JQM enables cross-country comparisons of job quality, allowing policymakers and researchers to learn from other countries' experiences and adopt successful strategies.

Incorporating the JQM into policy design, monitoring and evaluation, private sector practices, research, and international comparisons helps stakeholders improve job quality and promote sustainable economic development.