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Europe and Central Asia

Four policy approaches to support job creation through Global Value Chains

Ruchira Kumar's picture
 Maria Fleischmann / World Bank

Mexico created over 60,000 jobs between 1993 to 2000 upgrading the apparel value chain from assembly to direct distribution to customers.  (Photo: Maria Fleischmann / World Bank)

As we discussed in our previous post, Global Value Chains can lead to the creation of more, inclusive and better jobs. GVCs can be a win-win for firms that create better jobs while they enjoy greater efficiency, productivity, and profits. However, there is a potential trade-off between increasing competitiveness and job creation, and the exact nature of positive labor market outcomes depends on several parameters. Given the cross-border (and, therefore, multiple jurisdictive) nature of GVCs, national policy choices to strengthen positive labor outcomes are limited. However, national governments can make policy decisions to facilitate GVC participation that is commensurate with positive labor market outcomes.

Global Value Chains: a way to create more, better and inclusive jobs

Ruchira Kumar's picture
Photo by Jonathan Ernst / World Bank

Global Value Chains are a win-win for firms that enjoy greater efficiency, productivity, and profits while they create better jobs (Photo by Jonathan Ernst / World Bank)
 
Global Value Chains (GVC) are significant vehicles of job creation, employing around 17 million people worldwide and carrying a share of 60 percent of global trade. As globalization increases, GVCs are becoming more relevant in international production, trade, and investments. And Global Value Chains also have an important effect on job creation, and these jobs usually have higher wages and better working conditions. Global Value Chains can become a win-win for firms, which enjoy greater efficiency, productivity, and profits while they create better jobs. Here are some revealing facts about the potential of GVCs to create more and better jobs.

Looking to the future: Ensuring better job opportunities for Tajikistan’s youth

Mohamed Ihsan Ajwad's picture
Ensuring better job opportunities for Tajikistan's youth
A significant share of Tajikistan’s workforce works outside the country. Photo: Gennadiy Ratushenko / World Bank


My colleague Victoria and I had an opportunity recently to meet with students at the Tajik-Russian Slavonic University in Dushanbe, Tajikistan, as part of our research and preparation for a new report called Tajikistan Jobs Diagnostic: Strategic Framework for Jobs.

Curious to learn about their future professional ambitions, we asked one class of students how many of them would like to work in the private sector after they graduate. Only about 10% of the students raised their hands. We also asked them how many would like to work for the government. This time, around 20% raised their hands.

In Russia, the effects of business regulations depend on differing implementation capacity

Alvaro Gonzalez's picture
 
Enforcing labor laws can impact firms' hiring decisions. Photo: Tomislav Georgiev / World Bank

"Writing laws is easy, but governing is difficult," wrote Leo Tolstoy in War and Peace. We agree.

Our recently finished study highlights how differences in the enforcement of a strict labor code across Russia’s numerous administrative regions has affected hiring and firing decisions. More specifically, we examine how the varying capacity to enforce the labor code affected labor adjustment by firms in response to industry-wide surges and slumps.

Middle class jobs are thriving in Central and Eastern Europe

Roma Keister's picture
Photo: Tomislav Georgiev / World Bank

Exponential increases in automation, computerization and digitization is having a profound impact on many people’s jobs. Branko Milanovic’s recent work on global inequality has shown extent to which the lower-middle class jobs in developed countries are being replaced by technology. In particular, economists argue that middle-skilled, routine-intensive jobs are being hollowed-out. And indeed, in Western European countries and the US there has been a decrease in the intensity of routine tasks – both manual and cognitive. However, in Central and Eastern European (CEE) countries, the amount of routine cognitive work has been on the rise. And the pay for these workers has increased faster than for high skilled workers. Why is this happening, when in the most advanced economies the opposite is happening?

Why are women working less under capitalism than communism?

Joanna Tyrowicz's picture
A woman works in a call center. Photo: © Flore de Préneuf / World Bank

The last three decades have seen a transition from central planning to market systems across Central and Eastern Europe (CEE). But over the same period there has been a consistent decrease in women’s employment. Prior to the transition, CEE countries were characterized by a relatively high employment ratio among women. Gender employment gaps were generally lower in CEE under central planning and then increased over the course of transition. 

An ageing population needs older workers

Wojciech Hardy's picture
Populations are ageing, globally. Prolonging the working life is one of the most pressing challenges for policymakers around the world. As jobless older people face more difficulties in finding work than prime-aged workers, it is important to support workplace retention before retirement. But job retention among older people varies substantially even across neighboring countries or subpopulations. Moreover, retention rates also vary between genders and the largest room for improvement in retention rates pertains to women.
 

Retreat from mandatory pension funds in Eastern and Central Europe

Agnieszka Chłoń-Domińczak's picture
Over the next few decades, the consequences of an ageing population will be particularly visible in Central and Eastern Europe. These developments were behind the multi-pillar pension systems reforms at the end of 1990s and at the beginning of the century. After the financial and fiscal crisis of 2008, these reforms were slowed down and partially or fully reversed. In our recent study of this retreat from mandatory pension funds in Central and Eastern European countries, we look at the causes and consequences of these changes.
 

Everyone needs tech skills, not just youth

Piotr Lewandowski's picture
We need to make sure that older workers and those already in the work force have the skills to take advantage of technological change. The ongoing debate on how advancing technology impact the demand for labor sets up a dichotomy. The future will be a utopia or a dystopia; as work reduces, society will face either unprecedented abundance or deepening inequality. But these transitions will not occur suddenly, nor will they be binary. And they will happen in very different ways depending on which firms adopt technology, and how workers might be able to respond. It is not just about youth in education; countries need to develop lifelong learning to ensure existing workers do not fall into a skills gap.

Working from home: a Kyrgyz jobs diagnostic

Jennifer Keller's picture
We recently undertook a Jobs Diagnostic in the Kyrgyz Republic to help the country move away from a migration-led development model. The jobs challenge in the Kyrgyz Republic extends beyond creating more jobs.  The country also needs better jobs in terms of higher productivity and wages.  Many Kyrgyz have moved abroad to find jobs. The incomes of these migrants and the remittances they sent allowed the country to pull itself out of the deep economic collapse following independence. But the country now needs policies that allow these workers to stay home.

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