Jobs are a cornerstone of development: World Development Report

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

The World Development Report 2013: Jobs stressed 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 also revealed 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,” World Bank Group president Jim Yong Kim said.

“Governments need to move jobs to center stage to promote prosperity and fight poverty,” he said, adding that it’s critical that governments work well with the private sector, which accounts for 90 per cent 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 report’s authors highlight how jobs with the greatest development payoffs are those that raise incomes, make cities function better, connect the economy to global markets, protect the environment, and give people a stake in their societies.
“Jobs are the best insurance against poverty and vulnerability,” World Bank chief economist and senior vice president Kaushik Basu said, adding that governments play a vital enabling role by creating a business environment that enhances the demand for labour.
The global economic crisis and other recent events have raised employment issues to the center of the development dialogue.
The World Development Report 2013 authors, who processed over 800 surveys and censuses to arrive at their findings, estimate that worldwide, more than three 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,” said World Development Report director Martin Rama. “More than 620 million young people are neither working nor studying,” Rama said, adding that the worldwide number of jobs will have to increase by around 600 million over a 15-year period, just to keep employment rates constant.

But in many developing countries, where farming and self-employment are prevalent and safety nets are modest at best, unemployment rates can be low. In those places, most poor people work long hours but cannot make ends meet. And the violation of basic rights is not uncommon. Therefore, the quality and not just the number of jobs is vitally important.

The Report advances a three-stage approach to help governments meet these objectives like solid fundamentals, including macroeconomic study: labour policy should not become an obstacle to job creation, apart from providing access to voice and social protection to most vulnerable and the government should identify sectors that could create jobs.

“To move jobs center stage, we also need reliable country-level data that is disaggregated and covers more than urban or formal sector jobs,” Rama added.
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 urbanisation, infrastructure and human development, including social protection.