Putting jobs at the heart of development

The labor market remains one of the most pressing problems in developing countries today. Too many people are still working in low productivity, insecure jobs.  Formal waged employment represents only one third of jobs in developing countries while gender differences in jobs outcomes—including large pay gaps and persistent patterns of occupational and sectoral segregation—remain large.

Alongside unprecedented global job losses and declines in labor income, the COVID-19 crisis has brought these long-standing jobs challenges back to the forefront of policy discussions. It has also fostered a sharp increase in advocacy for a green economic transition, generating a renewed interest in its jobs and labor market implications.

Meanwhile, a new set of ‘mega trends’ became more evident during the pandemic. These include: a growing role for the service sectors in the generation of better jobs at an earlier stage of development; changes in the model of globalization and in the pattern of technological change (especially digitalization); and new possibilities for labor relationships, such as jobs in services contracts that are mediated through web-based platforms (so-called ‘gig jobs’).

Generating better jobs through structural transformation

Long-standing and new jobs challenges have prompted the World Bank’s Jobs Group to review the Jobs agenda in a new Jobs Report to be published in the fall of 2023.  The report aims to provide operational guidance to support countries in their pursuit of job-rich structural transformation as the world seeks to ‘build back better’ in the aftermath of the pandemic.

The report focuses on jobs outcomes along four dimensions of structural transformation. In addition to the traditional sectoral (agriculture-manufacturing-services) and spatial (rural-urban) jobs transitions, it includes two additional dimensions: organizational (the development of firms, cooperatives, associations, and value chains) and occupational transformations (the division of labor into occupations which reflect workers’ skills).

A key argument made in the report is that balancing the development of labor demand in the organized sector with human capital development is a central challenge. The report’s analysis will show that many elements of the jobs crisis in developing countries can be traced back to the imbalance between the supply and demand of human capital. 

The report will also focus on understanding the implications of the green transition for workers and for labor markets. Essential to the successful management of the green transition into cleaner energy and reduced coal dependence will be managing a challenging balance of facilitating structural transformation by creating better jobs while also achieving ‘net zero’ in carbon emissions and protecting global ecosystems.

This is especially relevant for developing countries, where many productive activities that are environmentally detrimental are also linked to bad jobs characterized by tenuous income streams from informal work, with little or no social protection (e.g., slash-and-burn agriculture, unregulated fisheries, unsustainable forestry practices or other extractive industries, etc.). The green transition opens opportunities for ‘win-win’ transformations, yielding both positive labor market outcomes (through the creation of better jobs) while also reducing negative environmental impacts.

Jobs & development: operational guidance

To help understand how jobs evolve with development and to derive operational guidance, the report will present patterns of jobs with economic growth and structural transformation and analyze their causes. Each chapter will then identify priority policy areas, regulations, and investments that affect jobs challenges across dimensions at different stages of development, drawing on global studies and evaluations.

Please refer to the Jobs and Development Partnership website for operational and analytical work on the Jobs agenda. For information on the upcoming Jobs Flagship report please contact Federica Saliola at fsaliola@worldbank.org and Dino Merotto at dmerotto@worldbank.org.