World Development Report 2013 The World Bank 3/13/2012

Moving jobs to center stage 1

Labor Market Core Course, May 9, 2013

2 Main messages World Development Report 2013 The World Bank

3 The jobs challenge World Development Report 2013 The World Bank

Jobs challenges are huge

4 The jobs challenge World Development Report 2013 The World Bank

A job does not always come with a wage

Source: WDR 2013 team based on ILO data Source: WDR 2013 team

South Asia, Africa, and East Asia and the Pacific face significant youth bulges

Alarming levels of youth idleness and unemployment

5 The jobs challenge World Development Report 2013 The World Bank

6 Part I World Development Report 2013 The World Bank

I. Jobs are

transformational

7 The jobs challenge World Development Report 2013 The World Bank

What is a job?

8 Jobs are transformational World Development Report 2013 The World Bank

Jobs drive development

Source: Inchauste and others 2012 for the WDR 2013

Jobs take households out of poverty

9 Jobs and living standards

Job creation and destruction happen everywhere

10 Jobs and productivity

World Development Report 2013 The World Bank

Source: WDR 2013 team based on Bartelsman, Haltiwanger, and Scarpetta (2009), and Shiferaw and Bedi (2010).

The employment share of microenterprises is greater in developing countries

11 Jobs and productivity

Source: Wietzke and McLeod 2012 for the WDR 2013

Jobs are correlated with civic engagement

12 Jobs and social cohesion

Active membership and lack of a Job Active membership and motivating Job

13 Part II World Development Report 2013 The World Bank

II. What are

good jobs for development?

14 Valuing jobs

Individual and social valuations of jobs often differ

15 Valuing jobs World Development Report 2013 The World Bank

Some jobs do more for development

16

Some jobs do more for living standards

• Earnings of others. Discrimination and uneven bargaining power can lead to distortions.

• Household allocations.

Female employment can change bargaining

power, increase investments in children.

• Poverty reduction. Jobs that reduce poverty can benefit society as well as individuals.

16 Jobs and social cohesion

17

Some jobs do more for productivity

Agglomeration economies. Learning and imitation happens in cities, through knowledge spillovers, exchange of ideas and better matching; and in industrial clusters, through specialization, sharing of common services and coordination.

Global integration. Knowledge spillovers occur through international trade and participation in global value chains.

Environmental impacts. Some jobs impose a greater toll on natural resources.

17 Jobs and social cohesion

18

Some jobs do more for social cohesion

Social identity. Jobs can affect the well-being of others by influencing values and behavior.

Networks. Jobs connect people. They may contribute to tolerance by increasing direct knowledge between people of different social and ethnic backgrounds.

Fairness. A perceived absence of fairness in access to job opportunities, beyond one’s own job, can undermine having a stake in society and create tensions.

18 Jobs and social cohesion

A typology of jobs challenges

19 Diverse jobs agendas

Agendas connected by the migration of workers

20 Connected jobs agendas World Development Report 2013 The World Bank

Source: WDR 2013 team based on Özden and others (2011).

Agendas connected by the migration of jobs

Manufacturing

jobs have migrated

– are services next?

21 Connected jobs agendas World Development Report 2013 The World Bank

Source: WDR 2013 team based on data from the United Nations Industrial Development Organization.

Where will

China’s jobs in light

manufacturing go as

labor costs increase?

22 World Development Report 2013 The World Bank

III. Policies through the

jobs lens

Part III

Policies through the jobs lens 23 World Development Report 2013 The World Bank

Three distinct layers of policies are needed

24

Fundamentals

24 Jobs and social cohesion

Policies through the jobs lens 25 World Development Report 2013 The World Bank

Three distinct layers of policies are needed

Labor Policies

• Regulation and minimum wages: Within a reasonable range labor market regulations have little impact on employment or productivity.

• Voice: new forms of voice are needed for those not in formal labor market. Productivity externalities happen in cities and clusters, implying that spatial negotiation can enhance coordination

• ALMPS: can have positive impact but can only be part of the solution

World Development Report 2013 The World Bank March 15 2012

26 Labor policies revisited

Active Labor Market Programs – Training alone often has limited success

World Development Report 2013 The World Bank March 15 2012

27 Labor policies revisited

Combined work and training increases the success rates of programs

Policies through the jobs lens 28 World Development Report 2013 The World Bank

Three distinct layers of policies are needed

Beyond labor policies 29 World Development Report 2013 The World Bank

Global partnerships for jobs

Rights and standards: pressure goes only so far

Further liberalizing investments, but managing the tradeoffs

Migration policies: toward bilateral agreements

Jobs are center stage, but where are the numbers?

The difficult questions 30 World Development Report 2013 The World Bank

Key policy questions addressed through the Report

But the 1st question is: what is a job? And the answer is not trivial

2 • Growth strategies or jobs strategies?

3 • Can entrepreneurship be fostered?

4 • Can policies contribute to social cohesion?

5 • Skills or jobs – what comes first?

6

• A targeted investment climate?

7 • Competing for jobs?

8 • Protecting workers or protecting jobs?

9 • How can job reallocation be accelerated?

31 Follow up World Development Report 2013 The World Bank

To continue the dialogue on what it takes to create good jobs for development join the

interactive Jobs Knowledge Platform at:

www.jobsknowledge.org

To download the World Development Report 2013: Jobs, its background papers, databases

and explanatory videos, visit:

http://www.worldbank.org/wdr2013