World Development Report 2013 The World Bank 3/13/2012 Moving jobs to center stage1

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 dataSource: 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 Jobs are transformational World Development Report 2013 The World Bank Jobs get better with development

8 The jobs challenge World Development Report 2013 The World Bank What is a job?

9 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 10 Jobs and living standards

11 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. 11 Jobs and social cohesion

Job creation and destruction happen everywhere 12 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 13 Jobs and productivity

14 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. 14 Jobs and social cohesion

Source: Wietzke and McLeod 2012 for the WDR 2013 Jobs are correlated with civic engagement 15 Jobs and social cohesion Active membership and lack of a JobActive membership and motivating Job

16 Georgia: Inequities in the Labor Market are Pronounced 16 Jobs and social cohesion

17 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. 17 Jobs and social cohesion

18 Part II World Development Report 2013 The World Bank II.What are good jobs for development?

19 Valuing jobs Individual and social valuations of jobs often differ

20 Valuing jobs World Development Report 2013 The World Bank Some jobs do more for development

A typology of jobs challenges 21 Diverse jobs agendas

Agendas connected by the migration of workers 22 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? 23 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?

24 World Development Report 2013 The World Bank III. Policies through the jobs lens Part III

Policies through the jobs lens 25 World Development Report 2013 The World Bank Three distinct layers of policies are needed

26 Fundamentals 26 Jobs and social cohesion

Labor Market Institutions Revisited Within a reasonable range labor market regulations have little impact on employment or productivity. Limits of the “plateau” are not well established and vary with country institutional characteristics 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 World Development Report 2013 The World Bank March Labor policies revisited

Active Labor Market Programs appropriateness and success vary by country challenge can have positive impact but can only be part of the solution Job search: high impact – but requires large wage sector and job availability Wage subsidies: both actual but even more hidden costs can be substantial – need to be targeted very well Public works: seldom are a bridge to permanent jobs Training: mixed record, especially if provided self-standing World Development Report 2013 The World Bank March Labor policies revisited

Active Labor Market Programs – Training alone often has limited success World Development Report 2013 The World Bank March Labor policies revisited Combined work and training increases the success rates of programs

Social Insurance Managing risks both outside (health, old-age) and inside (job transitions, disability from work) the labor market Coverage often linked to labor market status – hence under- coverage is huge. Last financial crisis: only 15 percent of unemployment received insurance payments Core question: how can coverage be expanded without creating disincentives – universal tax financing; expanding to informal sector on voluntary basis etc World Development Report 2013 The World Bank March Labor policies revisited

Beyond labor policies 31 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 32 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?

33 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: To download the World Development Report 2013: Jobs, its background papers, databases and explanatory videos, visit: