02 October 2012

World Bank: World Development Report 2013 - Jobs are a cornerstone of development

Washington - 01 October 2012 - In developing countries, jobs are a cornerstone of development, with a pay off far beyond income alone. They are critical for reducing poverty, making cities work, and providing youth with alternatives to violence, says a new World Bank report. 

The World Development Report 2013: Jobs stresses the role of strong private sector led growth in creating jobs and outlines how jobs that do the most for development can spur a virtuous cycle. The report finds that poverty falls as people work their way out of hardship and as jobs empower women to invest more in their children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and as less productive ones disappear. Societies flourish as jobs foster diversity and provide alternatives to conflict.  

A good job can change a person’s life, and the right jobs can transform entire societies. Governments need to move jobs to center stage to promote prosperity and fight poverty,” says World Bank Group President Jim Yong Kim, "It's critical that governments work well with the private sector, which accounts for 90 percent of all jobs. Therefore, we need to find the best ways to help small firms and farms grow. Jobs equal hope. Jobs equal peace. Jobs can make fragile countries become stable.

The global economic crisis and other recent events have raised employment issues to the center of the development dialogue. The WDR authors, who processed over 800 surveys and censuses to arrive at their findings, estimate that worldwide, more than 3 billion people are working, but nearly half work in farming, small household enterprises, or in casual or seasonal day labor, where safety nets are modest or sometimes non-existent and earnings are often meager. 

“The youth challenge alone is staggering. More than 620 million young people are neither working nor studying. Just to keep employment rates constant, the worldwide number of jobs will have to increase by around 600 million over a 15-year period”, says Martin Rama, WDR Director. 

The Report advances a three-stage approach to help governments meet these objectives: 
  • First, solid fundamentals – including macroeconomic stability, an enabling business environment, human capital, and the rule of law- have to be in place. 
  • Second, labor policies should not become an obstacle to job creation, they should also provide access to voice and social protection to the most vulnerable. 
  • Third, governments should identify which jobs would do the most for development given their specific country context, and remove or offset obstacles to private sector creation of such jobs. 
Focusing on the key features of different country types can help identify more clearly the kinds of jobs that would make the greatest contribution to development in each case. This focus allows for an analysis of the potential tradeoffs between living standards, productivity, and social cohesion in a specific context. It provides clues about the obstacles to job creation and, ultimately, the priorities for policy makers as they identify the most important constraints to job creation and how to overcome them. 

The World Bank Group fosters job growth through its two main channels of support to the developing world -- the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) -- as well as through the IFC and the Multilateral Investment Guarantee Agency. Assistance comes in the form of policy advice, support for private sector development plus loans and programs to advance urbanization, infrastructure and human development (including social protection). 

Source: World Bank