Partnering to measure impacts of private sector projects on job creation

Jobs are what we earn, what we do, and sometimes even who we are. For the poor and vulnerable of the world, jobs are key to ending poverty and driving development. But not all jobs are equally transformational. Good jobs add value to society, taking into account the benefits they have on the people who hold them, and the potential spillover effects on others. For example, inclusive jobs, such as those that employ women, can change the way families spend money and invest in the education and health of children.  

Development finance institutions (DFIs) support job creation through research, investments, and technical assistance. It has become increasingly important for policy makers and development practitioners to measure the number and quality of jobs being created by interventions. This includes measuring not only direct jobs, but also the indirect and induced jobs that were generated.

Through the Let’s Work Partnership, progress has been made in defining the measurement agenda so that DFIs can improve accountability to stakeholders by not only measuring jobs in a consistent and more robust way, but also along more nuanced  dimensions: number of jobs gained, the quality of those jobs, and who gets those jobs (inclusiveness).

Let’s Work, a global partnership of over thirty organizations, is piloting three methods to measure the impact of interventions on jobs:

1. The value chain method uses surveys to identify and understand patterns of job creation along a value chain at the sector and firm level. It will help teams understand the number of jobs available in a given value chain, where they are located, and the extent and nature of relationships among actors in the chain.
   The tool can be used prior to an intervention to forecast results and also post intervention to analyze the number of jobs created from investments.

2. The tracers method aims to calculate the long-term effects of job creation by evaluating impacts of private sector investments on beneficiaries.  

3. The macro models are simulation models that explore the range of possible outcomes that can result from investments within a sector, prior to an intervention.

To carry out the development of these three tools, 26 case studies drawn from a pool of projects across partner organizations, were launched globally. Standardized approaches are being developed for each tool and used in the case studies so that project teams are able to compare and contrast results.
   

Although much progress has been made in developing these tools, some are advancing faster than others. This is mostly due to availability of data in sectors and how each case study fits with the specific tool being built. Macro model case studies, for example, have already given us a good critical mass of knowledge in certain areas such as the power sector.

The value chain studies helped us build a more rigorous set of guidelines, including Stata do-files that run estimates based on the tool, survey questionnaires customized for different sectors, Expression of Interest and Terms of Reference templates to hire consultants, and survey manuals.

For tracers, we had to re-visit the proposed case studies to evaluate their fit, but results are expected soon. 

As we learned more about these tools, piloting some of the case studies were shifted from one tool to another. We have also started to gain a better understanding of scenarios that determine when or not to use a specific tool. For instance, the tracer tool is more useful when used in a small geographically confined area with limited movement of beneficiaries especially when working with the informal sector.  

Overall, this has been a learning-by-doing exercise and the lessons learned at each step helped us revise, adapt and refine these tools. The approach is possible because of the collaborative, creative, and open-mindedness of partners who joined hands for this initiative. Ultimately, Let’s Work aims to develop a framework that is useful for project teams to estimate and measure employment impact of their projects in a reasonably standardized and rigorous way.

This post is part of a series of blogs covering the three methodologies being developed by Let’s Work to estimate direct, indirect, and induced effects of private sector interventions on jobs, accounting for both the quantity and quality of jobs. A related blog in this series can be found here. 

This work has been made possible through a grant from the World Bank’s Jobs Umbrella Trust Fund, which is supported by the Department for International Development/UK AID, the governments of Norway and Germany, the Austrian Development Agency, and Swedish Development Agency SIDA. 


Current Partners of Let’s Work include:

• African Development Bank Group (AFDB)
• Asian Development Bank Group (ADB)
• Austrian Federal Ministry of Finance (BMF)
• Department for International Development (DFID)
• European Investment Bank (EIB)
• 15 European development finance institutions (CDC, DEG, etc.)
• Inter-American Development Bank (IADB)
• International Finance Corporation (IFC)
• International Labor Organization (ILO)
• Islamic Corporation for the Development of the Private Sector (ICD) 
• International Youth Foundation (IYF)
• Ministry of Foreign Affairs of Netherlands
• Overseas Development Institute (ODI)
• Private Infrastructure Development Group (PIDG)
• Swiss Secretariat for Economic Affairs (SECO)
• World Bank (WB)
• World Business Council for Sustainable Development (WBCSD)

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