The World Bank called on governments in developing countries to boost job creation efforts, noting that jobs are critical for reducing poverty, making cities work and providing youth with alternatives to violence.
The bank’s World Development Report 2013 stresses the role of 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 decreases 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, more productive jobs appear and 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 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 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,” says Kaushik Basu, World Bank chief economist and senior vice president.
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.
“But in many developing countries, where farming and self-employment are prevalent and safety nets are modest at best, unemployment rates can be low. ... And the violation of basic rights is not uncommon. Therefore, the quality and not just the number of jobs is vitally important,” the report said.
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.