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How to create jobs fast: From public works and wage subsidies to social services and capital subsidies

David Robalino's picture
It is well-known that markets tend to neglect the provision of many social services. There is, therefore, a role for governments to subsidize the provision of these services. Photo: Sarah Farhat/ World Bank

Creating jobs is not cheap —as I discussed in this post— and it can also be a slow process. It takes time for an idea to become a business plan and eventually a new or larger business. At the same time, in many developing countries, macro and regulatory policies often discourage entrepreneurship and investments. Reforming these policies takes time and having results on the ground even longer.
 
In the meantime, in many countries, there is a sense of urgency to address important labor challenges.  It is not only youth unemployment or inactivity but also the fact that many of those who have a job are in very low productivity, very low-quality jobs. Citizens are becoming frustrated and impatient. What can be done in the short-run?

Boosting access to opportunities by connecting cities

Sonia Madhvani's picture

Connected cities use urban infrastructure and transportation networks to boost access to economic opportunities and job creation. In Port-Au-Prince, Haiti, a project recently analyzed the flows of people within the city’s network using cell phone data.  The study identified the most critical links in the urban transportation system that can connect people to jobs and businesses to markets. The project won the World Bank Group’s Fiscal Year 2018 Presidents Award for Excellence for using disruptive technology to collect data.

Creating opportunities for young women through youth employment programs

Jose Manuel Romero's picture
Innovative programs can respond to gender disparities in youth employment. Photo: Dominic Chavez/ World Bank. 

The disadvantages young women face in the labor market and in entrepreneurship in developing countries are not only substantial and complex, but they quickly compound. A plethora of forces drive gender disparities in youth employment: lack of opportunities to develop the skills demanded by the labor market, family or social pressure dissuading them from entering desirable jobs or male-dominated sectors, a detrimental work environment, or a lack of available services such as childcare might make achieving success an uphill battle. Yet innovative youth employment programs can respond to gender issues. Below are three examples presented in a recent virtual workshop held by the Solutions for Youth Employment (S4YE) coalition with members of its Impact Portfolio community.

How can new infrastructure accelerate creation of more and better jobs?

Vismay Parikh's picture
The study analyzed four stages of the value chain —production; storage and logistics; processing; and marketing— to understand the potential for job creation stimulated by infrastructure projects. (Photo: Kubat Sydykov / World Bank)


It is widely accepted that investments in infrastructure can lead to direct and indirect jobs, and usually have spillover effects into other economic opportunities. For example, good transport systems and agro-logistics services help move freight from farms to locations where value can be added (like intermediate processing, packaging and sorting of agricultural produce) and ultimately to consumers. However, the anticipated benefits of these investments are not always fully realized, or sometimes they happen much later. How can investments in infrastructure have a multiplier effect in stimulating the economy and, eventually, facilitate job creation?

To maximize their impact, infrastructure projects should explicitly analyze and include complementary investments (e.g., industrial parks or processing facilities) and soft interventions (financial services, ICT, laws and regulations, etc.) needed to unlock the potential of new markets. As part of a broader effort to link investment in rural roads to economic opportunities, the Roads to Jobs study analyzed strategic value chains in the agriculture sector in Rajasthan, India, to better understand the challenges faced by farmers in accessing markets and provided recommendations to address constraints.

The invisible door: Three barriers limiting women’s access to work

Namita Datta's picture
Women’s labor force participation worldwide over the last two decades has stagnated, and women generally earn less than men. (Photo: Tom Perry / World Bank)
How can we Press For Progress —the theme of International Women's Day 2018— to improve women's opportunities at work? Despite progress on women’s health and education in the past few decades, the gender gap on access to jobs has remained a stubborn challenge.

Investing in Africa’s talent

Esteve Sala's picture
Africa will have more people joining the labor force over the next 20 years than the rest of the world combined. Photo credit: World Bank

For every software developer in the United States, there are five open jobs. Africa, meanwhile, has the youngest, fastest-growing population on earth, with more people joining the labor force over the next 20 years than the rest of the world combined.

With this idea in mind, and the powerful belief that "brilliance is evenly distributed, but opportunity is not," Andela, founded four years ago, began recruiting recent graduates in Africa with the mission of connecting them to job opportunities in high-tech companies. Today, about 650 developers in Lagos, Nairobi, and Kampala work full-time for over 100 firms spread across 45 cities worldwide.

How much does it cost to create a job?

David Robalino's picture
Also available in: Español | Français 
A $10 million investment can actually create just a couple hundred direct jobs. / Photo: Nugroho Nurdikiawan Sunjoyo / World Bank (Yogyakarta, Indonesia)

Creating more and better jobs is central to our work at the World Bank and a shared goal for virtually all countries —developed and developing alike. But oftentimes the policy debate turns to the cost and effectiveness of programs and projects in creating jobs.
 
As an example, I recently found myself in the middle of a discussion regarding a development project aimed at creating employment:  one of the reviewers objected given that the cost per job created was too high. “More than $20,000 per job,” he said, comparing it to much lower numbers (between $500 and $3,000 per job) usually associated with active labor market programs such as training, job search assistance, wage subsidies, or public works.
 
But what is the rationale behind these numbers?

In evaluating development projects, pressing for better tools in measuring job creation

Alvaro Gonzalez's picture
We learned that from potatoes and waste recycling in Lebanon to aquaculture and poultry in Zambia, it is possible to have a standardized base guideline; however, the methodology still needs to be adjusted for specific economic, political and social contexts. (Photo: Dominic Chavez / World Bank)


There is a well-known idiom saying that you can't compare apples and oranges. But this is precisely the challenge researchers often face when it comes to measuring the jobs impact of development projects. Having standardized impact evaluation tools and methods is a milestone for private sector-led job investments, and it allows international financial institutions, development practitioners, and governments to build on existing knowledge to develop solutions. And this is precisely one of the goals that Let's Work partnership, composed of 30 different institutions, is currently pursuing; to track the number of jobs generated from private sector-led interventions, the quality of those jobs, and how inclusive those jobs are in a standardized way, so apples are compared to apples and oranges to oranges.

Using technology to promote youth employment: How to develop digital solutions

Gabriela Aguerrevere's picture
Partners have developed a human-centered approach in developing digital platforms for youth. Photo: Sarah Farhat/ World Bank

How and when can we use technology to design and implement youth employment programs? We should ask ourselves whether investing in digital solutions is worth the time and money before deciding to include a digital component in our projects, because as much as technology can be transformative and help provide solutions, it is both expensive and time-consuming. Furthermore, we need to make sure we fully understand the problem that we are trying to solve.

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