We recently completed a Jobs Diagnostic in Kenya to look at ways that the country can create better jobs, especially for young Kenyans. Skills development is fundamental to the transition to better jobs as we found that firm creation is low and that more productive firms do not create more jobs. This lack of growth of the more productive firms is the real challenge. Better, more productive, transformational jobs will be key helping the country meets its goals of Vision 2030.
A key theme in this year’s IDA replenishment is the need to improve jobs through accelerated economic transformation. Generating more jobs and increasing productivity by creating stronger market linkages is a challenge everywhere in the developing world. But it is both particularly important and difficult in countries facing fragility. Sierra Leone had hardly emerged from the effects of a long civil war when the Ebola crisis struck. Around the same time, the commodity super cycle began winding down in 2014, negatively affecting revenues. The Jobs Group is working with the Government in Sierra Leone to meet this challenge. A team recently visited Sierra Leone to see how World Bank Group operations are helping and to find out what more can be done to improve the outlook for jobs in the country.
There is an undeniable link between urbanization and job creation – but what exactly is the relationship, and how could the potential of unprecedented urbanization growth most benefit the world’s urban poor looking for jobs? Urbanization can lead to more, better and inclusive jobs in cities around the world. But recent urbanization trends, particularly in Africa, show that in many cases urbanization is taking place without job creation. Focusing on issues such as reducing spatial mismatches may provide policy options to affect positive labor market outcomes. This is the first in a series of upcoming blogs looking at the connections, the dynamics and the interactions between urbanization and jobs.
Job creation is a crucial aspect of development. And broad-based, high-quality education is crucial for inclusive development. Worryingly low levels of education quality and quantity show that there is a crisis of education in some West African countries. If inclusive growth is to pull people into the labor market and out of poverty, this must be addressed. Getting education right is a crucial first step on the road to creating better employment and reducing poverty. It must be considered a priority by national governments and donors alike.
Rigid labor markets prevent formalization, especially when labor costs are high relative to the productivity of the workforce. Evidence from around the world, from developed and developing countries, shows that employers have a number of ways they adjust to the costs imposed by onerous labor policies. One of the main lessons that policy makers should learn, is that adopting measures that reduce rigidity and costs can help mitigate the negative impacts on unemployment and informality.
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.
Worries over Mozambique’s developmental trajectory have gained international attention over the last 12 months. These suggest that Mozambique’s most recent phase of growth was built on shaky foundations, without deep roots into the broader domestic economy. The lack of structural transformation in the economy is reflected in the structure of employment, where the vast majority of households continue to rely on informal, smallholder agriculture. Raising agricultural productivity is indispensable.
The minimum wage is a basic labor policy for workers and used in most countries around the world. But can we prevent the distorted use of the minimum wage? In theory yes. It is difficult although not impossible. Using objective methods based on economic tools that design formulas that link specific parameters and criteria to socio-economic context determines optimal levels and discards suboptimal levels. This approach can prevent minimum wages from being used for purposes that ultimately may end up generating undesirable effects on the economy.
Concern about climate change is often deemed a luxury; the domain of those that do not have to worry about famine, surviving the pending winter, local conflict, or political instability. But in the next three decades, an anticipated 900 million people will be added to Africa’s cities: a tripling of the current urban population. The small affluent-class aside, the clarion call of Africa’s newly urban population is not around climate change or industrialization, but jobs and access to work.
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.