Jobs as Pathways to Ending Poverty and Boosting Shared Prosperity Arup Banerji World Bank Labor Core Course 2013
Renewed World Bank Group Goals End extreme poverty: the percentage of people living with less than US$ 1.25 a day to fall to 3 percent by 2030 Promote shared prosperity: foster income growth of the bottom 40 percent of the population in every country 2 Sustainability, an overarching theme Achieving these goals require promoting environmental, social, and fiscal sustainability
The poverty target of 3% by 2030 3 50 45 40 35 30 25 20 15 10 5 0 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2028
Most household income is generated through jobs self-employment wage employment transfers other 17 23 24 17 21 31 29 35 35 30 41 45 47 49 38 53 32 54 70 68 46 59 67 73 49 79 39 37 58 38 36 50 36 29 35 35 26 10 4 Source: Covarrubias and others (2012) for WDR 2013
So jobs are critical for both the goals Job Creation Poverty Reduction, Growth of Incomes Inclusive Growth Infrastructure, Human Capital Investments Taxes Transfers 5
But there are huge challenges 1. Insufficient demand for formal labor, and low participation especially for youth 2. Low productivity of self-employment 3. Inadequate skills 4. Fragmented programs 6
1. A world at work, but not a world of wage earners Work status: farmers self-employed wage earners East Asia and the Pacific selfemploye d 23% farmers 34% wage 43% Europe and Central Asia farmers 5% selfemploye d 8% wage 87% Latin America and the Caribbean farmers 10% selfemploye d 24% wage 66% Middle East and North Africa South Asia Sub-Saharan Africa selfemploye d 27% farmers 26% wage 47% selfemploye d 21% farmers 29% wage 50% selfemploye d 33% farmers 48% wage 19% 7 Source: WDR 2013 Calculations Source: WDR 2013
1. Unemployment but also idleness for youth Lebanon Egypt Turkey Pakistan Chile India Indonesia Brazil Ghana Ukraine Thailand Tanzania 0 10 20 30 40 50 60 70 80 percent of youth population 8 not in school or labor force unemployed Source: WDR 2013
Share of Informal Employment in Total Non-Agricultural Employment 2. Poverty and the prevalence of (low productivity) informal work 100 BEN HTI 80 60 40 IRN CHL MEX TUN CRI MAR ARG BRA PAN DOM DZA COL TUR ECU PHL PRY PER BOL GTM HND SLV THA ZAF VEN YEM EGY IDN KEN MLI BFA MOZ PAK IND NER ZMB 9 20 0 ROM RUS 0 10 20 30 40 50 60 70 80 90 100 Share of Population Living Below 2 USD (PPP) a Day Source: OECD: Is Informal Normal? and World Bank Group (2007).
2. Women often over-represented in informal employment India Indonesia Philippines Kenya 59.1 70.8 73.4 78 77.2 82.9 85.7 83.1 Share of informal employment in total nonagricultural employment (in %) Source: OECD Development Centre, 2009 South Africa Thailand Brazil 51 49.1 54.3 50.2 52.3 64.9 10 Mexico 47.8 53.5 0 20 40 60 80 100 Men Women
3. Employers complain about the lack of job-relevant skills 11 Sources: IFC Jobs Study, World Bank STEP study
3. But ALMPs need complementary steps to build Skills CCTs: Nutrition CCTs: Education Active labor market programs: Training Risk mitigation and innovation: Social Insurance Labor regulations 12 (Source: World Bank 2010)
4. Programs for labor opportunities need to work together across the life cycle Example: SPL programs across the life cycle Old-age pensions, disability insurance Pregnancy, Early childhood Nutrition/ECD, CCTs for pre-school, health Employment services, entrepreneurship, training and skills Old age School age CCTs for (girls ) education Unemployment, disability insurance 13 Working age Youth Youth employment programs, skills training
Towards answers 1: Three distinct layers of policies are needed (WDR 2013) 14 Source: 2013 World Development Report on Jobs 14
Towards answers 2: Building social protection and labor systems (connected portfolios of programs to address various challenges Administration level: Program Aim: Building basic subsystems to support one or more programs for security, equity or opportunity Program level: Program Admin. subsystems Program Aim: Improving design of existing programs and harmonizing across portfolio of programs Program Policy Level: Aim: Ensuring overall policy coherence across programs and levels of government 15 Source: Robalino, Rawlings and Walker (2012)
Towards answers 2: Building social protection and labor systems: Examples Program e.g., connect beneficiary databases across training and unemployment benefit programs Program Admin. subsystems Program e.g., ensure that there is a smooth connection from beneficiaries going from welfare to work Program e.g., promote coherence between taxation incentives and employment objectives 16 Source: Robalino, Rawlings and Walker (2012)
Towards answers 3: Different countries have different jobs challenges 17 Source: WDR
For further information, visit www.worldbank.org/spstrategy go.worldbank.org/tm7gteb8u0 (WDR on Jobs) 18 www.jobsknowledge.org