The discussion around digitization is usually focused on how automation will affect jobs, disregarding how the changing world of work is also transforming the labor markets for the better. Although automation will change many jobs —up to 46% of jobs in developed countries according to a recent OECD report are highly automatable or likely to experience significant changes due to automation— it also holds several opportunities for employment intermediation. Job seekers can take new digital avenues to labor market inclusion, while employment services can also support workers with new ways of finding jobs. Three international experiences show how some countries are utilizing these opportunities.
Mozambique has achieved substantial poverty reduction during the last two decades, but the existing development model is running out of steam. When the civil war ended in the early 1990s, Mozambique was one of the poorest countries in the world. Since then, it has had relatively fast growth and the poverty headcount rate has declined steadily. However, the Jobs Diagnostic produced as part of the Let’s Work Mozambique Country Pilot shows that over the last 20 years, the pattern of growth has become progressively less inclusive. In this blog, we outline four possible strategies that could help accelerate the shift into higher value-added activities and better livelihoods for the mass of low-paid workers in Mozambique.
According to The Africa Competitiveness Report 2017, Africa is forecasted to produce just 100 million new jobs by 2035, while the working age population is projected to grow by more than 450 million. The fastest population growth will occur in the 15 to 35-year-old demographic. This growing working-age population presents both an opportunity and a potential risk to Africa’s future prosperity. To ensure these new workers engage in productive livelihoods and prevent significant increases in extreme poverty and civil unrest, governments will need to enable job creation, including scaling cost-effective livelihood development programs targeting the extreme poor. Described below is a cost-effective approach which is yielding promising results and scaling through results-based financing.
Active labor market programs (ALMPs) like job matching, training, wage subsidies, start-up support, and public works for the unemployed have a less than stellar reputation. “Ineffective,” “a ”charade,” and “a waste of money” are common labels one hears when discussing ALMPs; and even when positive effects of ALMPs are acknowledged, the sizes of these effects are portrayed as too small to bother. At the same time, these programs are widely used, not only in high-income countries, but also in many developing countries—often with the hope that they solve many labor market problems, in particular, unemployment. Are policymakers wrong to pursue these programs?