More support for good jobs

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Some months ago I discussed a paper on the myth of the entrepreneurial middle class. Abhijit Banerjee and Esther Duflo, two of the rockstars in the field of evaluation, argued in the paper that what development requires is "good jobs":

A good job is a steady, well-paid job—a job that allows one the mental space needed to do all those things the middle class does well. This is an idea that economists have often resisted, on the grounds that good jobs may be expensive jobs, and expensive jobs might mean fewer jobs. But if good jobs mean that children grow up in an environment where they are able to make the most of their talents, one might start to think that it may all be worth it.

The idea of a "good job" gets more support from a recent article in Seed Magazine by Sendhil Mullainathan, a professor at Harvard. In Poor Decision Making, he argues:

We are accustomed to ensuring that the poor have environments full of opportunities — such as education or access to clean health. But we also need to reconceptualize these environments in terms of how they help the poor to overcome decision challenges. Recognizing that salaried jobs remove one of the most basic self-control problems highlights an additional benefit of formal employment as a poverty-alleviation tool.

As I argued in my earlier post, I think Banerjee and Duflo, and now Mullainathan, are too quick to jump from "stable environment" to "salaried job." Small businesses could also provide stability - contingent on a business environment that is open to easy formalization and free of arbitrarily enforced regulations. And given the great difficulty in creating salaried jobs for all the world's poor, it might make more sense to focus on creating a stable environment for small businesses.


Ryan Hahn

Operations Officer

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