World Development Report 2013: Jobs

Adopting a cross-sectoral and multidisciplinary approach, the report looks at why some jobs do more for development than others. 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. The report advances a three-stage approach to help governments meet these objectives. First, policy fundamentals, including macroeconomic stability, an enabling business environment, investments in human capital, and the rule of law, are essential for both growth and job creation. Second, well-designed labor policies can help ensure that growth translates into employment opportunities, but they need to be complemented by a broader approach to job creation that looks beyond the labor market.

The jobs agenda in one country will thus be different from that in another country, depending on their dominant features. The challenges facing countries as they move along the development path are illustrated by the agrarian, urbanizing, and formalizing cases:. Most people are still engaged in agriculture and live in rural areas. Jobs that improve living standards have a substantial development payoff because of high poverty rates.

Cities need to be more functional to reap the benefits from agglomeration and global integration, so jobs that set the foundation for cities to eventually become economically dynamic are good jobs for development. Even in the most optimistic scenario, however, it may take decades before urbanization is complete, so increasing productivity in agriculture is a priority. Productivity growth in agriculture has risen enough to free up large numbers of people to work in cities. Job opportunities for women, typically in light manufacturing, can have positive impacts on the household allocation of resources.

Jobs that deepen the global integration of urbanizing countries, especially in highervalue-added export sectors, are also good for development. As countries urbanize, congestion, pollution, and other costs of high density become increasingly serious, so. Large and growing urban populations generally lead to more developed economies, where a fairly substantial proportion of firms and workers are covered by formal institutions and social programs.

But further increasing formality to levels typical of industrial countries involves tradeoffs between living standards, productivity, and social cohesion. There is a premium on jobs that can be formalized without making labor too costly and on jobs that reduce the divide between those who benefit from formal institutions and those who do not. In some countries, the jobs challenge is shaped by demography and special circumstances affecting particular groups. In countries with high youth unemployment young people do not see opportunities for the future.

Many of these countries have large youth bulges, which can put downward pressure on employment and earnings. Many also have education and training systems that are not developing the kinds of skills needed by the private sector. On closer inspection, the problem is often more on the demand side than the supply side, with limited competition reducing employment opportunities, especially in more skill-intensive sectors.

In these settings, removing privilege in business entry and access to jobs is likely to have large development payoffs. Aging societies also face generational issues, but these stem from a shrinking working-age population and the high cost of providing and caring for a growing number of elderly people. The impact of the declining workingage population can be mitigated through policies for active aging, ensuring that the most productive members of society, including the highly skilled elderly, can work.

Containing the increase in pension, health care, and long-term care costs can be achieved through reforms in program design, but these reforms can be a source of social strain. Resource-rich countries may have substantial foreign exchange earnings, but this wealth may not translate into employment creation beyond the exploitation of natural resources. Indeed, the abundance of foreign exchange can hamper the competitiveness of other export activities.

Some resource-rich countries distribute part of their wealth through transfers or subsidized public sector jobs, while relying on migrants to do menial work. This approach can maintain living standards but at the expense of productivity growth and social cohesion. In those countries, jobs that support the diversification of exports can have large development payoffs. Small island nations, because of their size and remoteness, cannot reap the benefits from agglomeration and global integration except through tourism.

So the productivity spillovers from jobs are limited, as are employment opportunities outside basic services and government. Outmigration offers an alternative for improving living standards, while return migration and diaspora communities can stimulate the diffusion of new business ideas among locals. In conflict-affected countries, the most immediate challenge is to support social cohesion. Employment for ex-combatants or young men vulnerable to participation in violence takes on particular importance.

With fragile institutions and volatile politics, attracting private investment and connecting to global value chains may be out of reach for quite some time.

Promoting Jobs, Protecting People

Yet construction can boom even in poor business environments, and it is labor intensive. Investments in infrastructure can not only support social cohesion through their direct employment impact, they can also be a step in preparing for future private sector job creation. These criteria are not mutually exclusive. Chad and the Democratic Republic of Congo are both resource rich and conflict affected; Jordan and Armenia are formalizing and also have high youth unemployment.

Still, looking through the jobs lens and focusing on the key features of the different country types can help identify more clearly the kinds of jobs. This focus allows for a richer 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 figure Migration of people—and of jobs The movement of people and jobs implies that jobs challenges, while being country specific, also have a global scope.

These processes have implications for living standards and productivity at both the sending and the receiving ends, and they can transform families and entire communities, for better or for worse. Tradeoffs are inevitable, and coping with them only through the policies of receiving countries alone may prove unsatisfactory. At the turn of the 21st century, there were more than million international migrants worldwide, nearly 90 million of them workers.

Many migrants are temporary or seasonal workers who eventually return home. Some countries are mainly recipients, while others are sources, and yet others neither host nor send significant numbers of migrants map 1. Some are large recipients either in absolute numbers for instance, the United States or in relative terms Jordan and Singapore. Migrants from Bangladesh, Mexico, and India represent a large share of total migrants worldwide; Fiji, Jamaica, and Tonga have a large share of their population overseas. Figures for some of the smaller countries are striking.

For instance, about a fifth of all Salvadorians live abroad, while more than 60 percent of the populations of Kuwait, Qatar, and the United Arab Emirates are foreign-born. The majority of the studies find either no effect or a very small negative effect on the labor earnings of locals in receiving countries. Migrants also contribute to global output if their productivity abroad is higher than it would be at home, which is usually the case. They may even contribute to output in the sending country, as networks of migrants and returnees channel investments, innovation,.

Jobs demobilizing combatants Jobs reintegrating displaced populations Jobs providing alternatives to confrontation Jobs providing opportunities for women Jobs moving the country up the export ladder Jobs not leading to excessive congestion Jobs integrating rural migrants. Jobs supporting export diversification Jobs not subsidized through transfers Jobs connected to global markets Jobs not undermining fragile ecosystems. Social effects are more mixed. On the positive side, migration connects people from different cultures in ways bound to widen their horizons.

On the negative side, the separation from family and friends can be a source of distress and isolation. Migration may also bring racial prejudice and heighten social tensions in host countries, especially when migrants are secluded in segregated occupations or neighborhoods, preventing their integration in society. Jobs are on the move as well. The past four decades have been marked by the outsourcing of manufacturing tasks from industrial countries to the developing world, especially to East Asia figure More recently, the same pattern is observable for service tasks.

In fact, services are the fastest-growing component of global trade. Developing countries are now exporting not only traditional services, such as transportation and tourism, but also modern and skill-intensive services, such as financial intermediation,. This migration, along with the transfer of new technologies and advanced management methods, contributes to productivity growth and higher living standards.

The hidden winners of job migration are consumers worldwide. The improved international division of labor increases the availability of goods and services and enhances the possibility of gaining from trade. The clear losers are those who have seen their jobs disappear because of the declining competitiveness of their industries and services. Among the losers, many skilled workers find comparable jobs without a substantial loss in salary, but oth-.

Only in some countries are migrants a substantial share of the population a. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Low-skilled workers or those with industry- or occupation-specific skills that are no longer in demand are those who suffer most. Policies through the jobs lens While it is not the role of governments to create jobs, government functions are fundamental for sustained job creation.

The quality of the civil. Temporary employment programs for the demobilization of combatants are also justified in some circumstances. But as a general rule it is the private sector that creates jobs. The role of government is to ensure that the conditions are in place for strong private-sector-led. Government can fulfill this role through a three-layered policy approach figure Because jobs improve with development, providing higher earnings and benefits as countries grow rich, a prerequisite is to create a policy environment that is conducive to growth.

Macroeconomic stability, an enabling business environment, human capital accumulation, and the rule of law are among the fundamentals. Ensuring macroeconomic stability involves containing volatility and avoiding major misalignments of relative prices. Adequate infrastructure, access to finance, and sound regulation are key ingredients of the business environment. The rule of law includes protection of property rights and also the progressive realization of rights at work, to avoid a situation where growth coexists with unacceptable forms of employment.

Because growth does not mechanically deliver employment, a second layer is to ensure that labor policies do not undermine job creation and instead enhance the development payoffs from jobs. But labor market imperfections should not be addressed through institutional failures. Instead, they should remain on a range—a plateau—where negative efficiency effects are modest.

Labor policy should avoid two cliffs: The first cliff undermines the development payoffs from agglomeration and global integration; the second leads to low living standards and a social cohesion deficit.

Because some jobs do more for development than others, it is necessary to understand where good jobs for development lie, given the country context. More selective policy interventions are justified when incentives are distorted, resulting in too few of. Japan is not included in panel a. If this is the case, policies should remove the market imperfections and institutional failures that prevent the private sector from creating more good jobs for development. If the failures and imperfections cannot be clearly identified, or cannot be easily removed, offsetting them may be an option, but the costs and benefits of doing so need to be carefully assessed.

Ensuring the basics Macroeconomic stability. Volatility hurts employment and earnings, often immediately. According to a recent estimate, a 1. Internally, it is often the outcome of unsustainable budget deficits and lax monetary policy. But tight budgets and rigid monetary policy rules may not be a magic wand. Assessing the soundness of macroeconomic management requires taking account of the impact of fiscal and monetary policies on economic growth. Precautionary policies can cushion those shocks, if and when they occur.

Most often, short-term stimulus or adjustment packages are needed—but these tend to be less effective in the developing world than in developed countries because of lower multiplier effects.

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Macroeconomic stability An enabling business environment Human capital Rule of law and respect for rights. Resource-rich countries face similar pressures for their currencies to appreciate, and the commodity booms of the last few years have only made these pressures stronger. Currency overvaluation can also happen in countries where large volumes of foreign assistance are needed to jump-start development, cope with natural disasters, or facilitate recovery after a conflict.

An analysis of 83 developing countries between and confirms that aid fosters growth albeit with decreasing returns but induces overvaluation and has a negative impact on export diversification. Finance, infrastructure, and business regulations set the quality of the investment climate and thus influence job creation by private firms. Access to finance, a chief constraint to business expansion in countries in every development phase, is the top constraint in low- and upper-middleincome countries figure Financial markets have the potential to allocate resources toward more productive uses, thwart the channeling of resources to those with political connections or economic power, and expand financial in-.

Finance and electricity are among the top constraints faced by formal private enterprises Firm size. The analysis is based on World Bank enterprise surveys covering 46, firms in countries. Small firms have fewer than 20 employees, medium firms have 21—99, and large firms and more. But regulatory oversight is needed to ensure transparency and competition in how funds are allocated. Access to affordable and quality infrastructure is a prerequisite for firms to operate.

Power shortages are the number-two constraint to firm growth and job creation mentioned by entrepreneurs the world over—and number one in low-income countries. Telecommunications allow for a better flow of information with suppliers and customers, and the internet and mobile technology facilitate the spread of new ideas.

Roads provide greater access to markets, as do ports and airports. Inadequate pricing policies and regulations amplify the gap in needed infrastructure services. In many countries, monopolies based on political connections have led to reduced quantities of infrastructure services at higher prices and lower quality. Regulations can increase the cost of doing business, in money or in time needed to comply. Steps taken to meet requirements or to pay fees are a burden for businesses, as are delays or discretionary decisions, such as those for permits or licenses.

There is great variation across firms in the same location with regard to the time it. Across countries, regulations on business entry are inversely correlated with productivity and firm creation, with stronger effects in sectors that have higher rates of entry. But they also equip people for productive employment and job opportunities—and through this channel, human capital drives economic and social advances. There is robust evidence from throughout the world that an additional year of schooling raises earnings substantially, and that this earnings premium reflects the higher productivity of more educated workers.

As such, human capital is a fundamental ingredient for desirable job outcomes. Human capital formation is cumulative. Brain development in this time period affects physical health, learning abilities, and social behavior throughout life. Schooling is fundamental for the further development of cognitive and social skills until the end of the teenage life. Social skills remain malleable through adolescence and the early adult years. These general skills are especially important in more dynamic economic environments.

Unfortunately, the evidence shows that many countries are falling short in building up the human capital of their children and youth. The quality of delivery systems has often failed to keep pace with the expansion of access to basic social services. In a large majority of developing countries that took part in the Programme for International Student Assessment PISA in , at least one-fifth of year-old students were functionally illiterate not reaching at least level 2 in the PISA reading assessment.

Across countries, the presence of institutions that protect property rights, uphold the rule of law, and rein in corruption is associated with higher levels of development. Entrepreneurs who believe their property rights are secure reinvest more of their profits than those who do not. An independent, accountable, and fair judiciary can contribute to private sector growth and job creation by enforcing the rules that govern transactions and by helping ensure that the costs and benefits of growth are fairly distributed. The justice system can enforce contracts, reduce transaction costs for firms, and create a safe and more predictable business environment.

Ensuring that standards are applied in practice requires providing access to information to workers and employers. It also implies expanding legal coverage to workers in jobs that fall outside formal laws and regulations. Associations of informal workers can inform them about their rights, help them use legal mechanisms, and offer them collective voice.

Avoiding the two cliffs A malfunctioning labor market may prevent economic growth from translating into more and better jobs. Traditional analyses focus on labor supply, labor demand, and their matching to explain why there may not be enough employment, or not enough wage employment in the case of developing countries. By not addressing labor market imperfections, or by creating them, labor policies can indeed constrain job creation, even seriously. In many cases, however, the constraints to creating transformational jobs are not connected to the labor code.

The low productivity of smallholder farming in agrarian economies is probably more closely related to failures in agricultural research and extension. And the lack of competition in technologically advanced activities that could boost the demand for skilled work in countries with high youth unemploy-.

There is no consensus on what the content of labor policies should be. Views are polarized, reflecting differences in fundamental beliefs. To some, labor market regulations and collective bargaining are sources of inefficiency that reduce output and employment, while protecting insiders at the expense of everyone else. In this view, unemployment insurance and active labor market programs create work disincentives and are a waste of money.

To others, these policies provide necessary protection to workers against the power of employers and the vagaries of the market. They can even contribute to economic efficiency by improving information, insuring against risks, and creating conditions for longterm investments by both workers and firms. Advocates of both views can find examples to support their positions. Those who see labor policies and institutions as part of the problem point to the impressive long-term job creation record of the United States, a country with limited interventions in the labor market.

They also point to the protective job security rules that have impeded young people from finding work in many North African and Southern European countries. A careful review of the actual effects of labor policies in developing countries yields a mixed picture.

The World Bank’s World Development Report Jobs – Interview with Peter Bakvis

Most studies find that impacts are modest—certainly more modest than the intensity of the debate would suggest. Excessive or insufficient regulation of labor markets reduces productivity. But in between these extremes is a plateau where effects enhancing and undermining efficiency can be found side by side and most of the impact is redistributive, generally to the advantage of middle-aged male workers as opposed to owners of capital, women, and younger workers. In most countries that have been studied, job security rules and minimum wages have a small effect on aggregate employment.

These rules offer benefits for those who are covered, while negative effects tend to be concentrated on. In Colombia and Indonesia, minimum wage increases had only a modest overall effect but the employment impact was stronger for young workers. Studies place this premium in the 5 to 15 percent range in Mexico; around 5 percent in Korea; and at 10 to 20 percent in South Africa. In some countries, though not all, the tradeoff seems to be lower employment, but even then the magnitudes are relatively small.

The limited evidence on union effects on productivity is also mixed. Active labor market programs, such as training, employment services, wage subsidies, and public works, have a mixed record. When they are well designed and implemented, they can help facilitate job matching, mitigate the negative impacts of economic downturns, and fill the gap when employers or workers underinvest in training figure Even when this is the case, though, effects tend to be modest, so expectations about what active labor market policies can achieve need to be held in check.

Social insurance coverage is limited even in the most formalized developing countries. Unemployment insurance can help workers manage the risks of job loss, but it can also weaken job search efforts. When unemployment insurance, pensions, health care, and other benefits are financed through the payroll, high contribution rates can create hiring disincentives.

In the end, there is no substitute for affordable social protection benefits that are valued by workers. The main issue is coherently integrating social protection and social assistance to minimize gaps and overlaps. In sum, labor policies and institutions can improve labor market information, manage risk, and provide voice. But these advantages can come at the expense of labor market dynamism, reduced incentives for job creation and job search, and a gap in benefits between the covered and uncovered. The challenge is to set labor policies on a plateau—a range where regulations and institutions can at least partially address labor market imperfections without reducing efficiency.

Labor market rules that are too weak or programs that are too modest or nonexistent can leave problems of poor information, unequal power, and inadequate risk management untreated. In contrast, rules that are too stringent and programs that are too ambitious can compound market imperfections with institutional failures.

The focus on good jobs for development offers some insights to assess where the edges of the plateau, the cliffs, may lie. At one end of the plateau are labor policies that slow job creation in cities, or in global value chains, and make countries miss out on jobs supporting agglomeration effects and knowledge spillovers. Forgoing the development payoffs from urbanization and global integration would be a consequence of falling off the cliff. This is not necessarily an argument for minimum regulation. At the other end of the plateau, the absence of mechanisms for voice and protection for those who do not work for an employer, or do so in the informal sector, is also a concern.

Extending voice for workers who are often among the poorest may result in higher living standards. Limiting abuses by employment intermediaries should enhance efficiency, and building inclusive social protection systems can contribute to greater social cohesion. Fares and Puerto The figure shows the correlation coefficient between type of training and reported success of a program, with success defined as improving employment or earnings and being cost-effective.

Realizing the development payoffs from jobs In addition to ensuring that the fundamentals support growth and that labor policies are adequate, decision makers can help realize the development payoffs that come from jobs. Some jobs do more than others for living standards, productivity, and social cohesion.

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What those jobs are depends on the country context—its level of development, demography, endowments, and institutions. In some circumstances, there will be no constraints to the emergence of good jobs for development, and no specific policy will be needed. In others, governments can support the private sector in creating more of these jobs. Sometimes this can be achieved by removing constraints that impede the creation of jobs with high development payoffs.

When this is not possible, policies can be more proactive and bypass the constraints, provided that the gains to society from doing so outweigh the cost. What are good jobs for development? Assessing the development payoffs from jobs in a particular country context is the first step in identifying priorities. The nature of those jobs varies with the characteristics of the country, including its phase of development, demography, endowments, and institutions. Jobs challenges are not the same in agrarian economies, resource-rich countries, conflict-affected countries, or in countries with high youth unemployment.

And the jobs with the greatest development impact differ as well, resulting in diverse jobs agendas. Are there enough of these jobs? A country may or may not face constraints in creating good jobs for development. For example, light manufacturing can offer employment opportunities for women, with significant impacts on poverty. If a boom is under way, the development value of new manufacturing jobs might materialize.

But it might not if, for example, inadequate urbanization policies limit the establishment of new firms. In the absence of gaps of this sort, it is difficult to justify government interventions beyond establishing the fundamentals and adopting adequate labor policies.

Data and analysis can be used to identify misaligned incentives, indicated by a gap between the individual and the social value of jobs. Several research areas deal with these gaps. For instance, the tools of public finance can measure the tax burden that applies to capital and labor and assess the crosssubsidization between individuals or firms. The methods of labor economics can uncover gaps between the actual earnings of specific groups of workers and their potential earnings, or between the social and individual returns to schooling.

Poverty analyses help in identifying the kind of jobs that are more likely to provide opportunities to the poor, or the locations where job creation would have a greater impact on reducing poverty. Productivity studies allow for quantifying the spillovers from employment in foreign-owned investment companies, or in cities. Environmental studies shed light on the carbon footprint and pollution created by various types of jobs. Can the constraints be identified?

The gaps between the individual and social values of specific types of jobs indicate unexploited spillovers from jobs. The gaps typically arise from market imperfections and institutional failures that cause people to work in jobs that are suboptimal from a social point of view, lead firms to create jobs that are not as good for development as they should be, or connect people less through jobs than would be socially desirable. But identifying those constraints is not always easy. For instance, a broad set of cultural, social, and economic forces may result in insufficient employment opportunities for women.

Similarly, the obstacles to more jobs in cities could be in the land market, or in the institutional arrangements to coordinate urban development, or in the ability to raise revenue to finance infrastructure. Can the constraints be removed? If the institutional failures and market imperfections leading to misaligned incentives can be identified, reforms should be considered. It is a good economic principle to target reforms on the failures and imperfections at the root of the problem.

The next World Development Report is on Jobs, and I'm worried about it

Where reforms are technically and politically feasible, policy makers can directly tackle the major constraints hindering the creation of more good jobs for development by the private sector. Can the constraints be offset? Reforms might not be feasible, technically or politically. Or perhaps the constraints for jobs are not identifiable. An alternative then is to adopt offsetting policies that can restore the incentives for job creation.

For instance, if a diffuse but entrenched set of norms and beliefs makes it difficult for women to work, efforts could aim at increasing their employability through targeted investments in social and physical infrastructure box 1. Similarly, if politically charged regulations slow down the reallocation of labor toward more productive activities, urban infrastructure and logistics could enhance the attractiveness of jobs in cities and jobs connected to world markets. But there are cases when constraints can neither be removed nor offset.

An engagement strategy involving a deeper analysis of the options and buy-in by key stakeholders is needed then. Policy making to remove or offset constraints needs to be selective and supported by good public finance principles. The costs and benefits of policy options need to be assessed, but calculations are different when the overall development impact is the guiding objective. An employment program to demobilize ex-combatants in a conflict-affected country could be assessed in terms of whether the earnings gains of participants justify the program costs, but a full accounting should also incorporate the potentially positive effects from reintegration and peace building.

Whether or not it is still worth implementing depends on the value policy makers attach to social cohesion benefits. These benefits should be stated for the policy decision to be transparent. Diverse jobs agendas, diverse policy priorities Some countries have successfully set policy to bring out the development payoffs from jobs, in ways that provide a model to others. As an agrarian country, in the s Vietnam concentrated on increasing productivity in agriculture, freeing labor to work in rural off-farm employment and eventually supporting migration to cities.

In , more than 70 percent of employment was in agriculture, 58 percent of the population lived in poverty, and famine was still a real concern. Poverty has declined dramatically. Combined with a strong emphasis on agricultural extension, land reform and deregulation led to rapidly growing agricultural productivity on very small farm plots.

These policies were part of a broader package of reforms, or Doi Moi, that took Vietnam from central planning to a market economy with a socialist orientation. Nowhere has the change been faster than in Latin America. Since the s, more than 70 million women have entered the labor force, raising the female labor participation rate from 36 percent to 43 percent.

In Colombia, the rate increased from 47 percent in to 65 percent in Recent research attributes this rapid transformation to increases in labor force participation among married or cohabiting women with children, rather than to demographics, education, or business cycles. Changes in social attitudes contributed to the transformation, but this is a complex area with limited scope—and justification—for direct policy intervention. But this cannot be mechanically attributed to religion, as countries like Indonesia have high participation rates.

Other social norms and regulations prevent women from participating, despite their willingness and capacity to do so. While the scope to influence social attitudes is limited, evidence suggests that public policies and programs in other areas have an important role to play.

These investments can be categorized into three groups. They can address shortages in the availability of services such as lack of electricity or daycare facilities that force women to allocate large amounts of time to home production. They can make it easier for women to accumulate productive assets, such as education, capital, and land, facilitating their entry into highproductivity market activities. And they can remove norms or regulations that imply biased or even discriminatory practices, preventing women from having equal employment opportunities. There are successful experiences with targeted investments and interventions of each of these three sorts.

Public provision or subsidization of child care can reduce the costs women incur at home when they engage in market work. Examples include publicly provided or subsidized day care such as Estancias Infantiles in Mexico, Hogares Comunitarios in Colombia, and similar programs in Argentina and Brazil. Correcting biases in service delivery institutions, such as the workings of government land distribution and registration schemes, allows women to own and inherit assets.

Finally, the use of active labor market policies, the promotion of networks, and the removal of discriminatory regulations are important to make work more rewarding for women. The country opened to foreign investors, first in natural resource exploitation and light manufacturing, and then more broadly in the context of its accession to the World Trade Organization in In the wake of the conflict, the government supported the reintegration and demobilization of more than 54, former combatants.

In , 73 percent of ex-combatants. Rwanda has built on this start by rejuvenating the private sector through reforms of institutions and business regulations. Unemployment fell to single digits from around 20 percent in the early s. Governance reforms in all areas of public sector management promoted accountability and transparency. An active export-oriented growth policy, including the welcoming of foreign investment, supported productivity spillovers from jobs connected to global markets.

Competitive innovation funds for nonmineral export sectors, especially in agribusiness, have broadened the export base. Taking advantage of European integration, the economy successfully restructured its export sector.

Very good infrastructure and a fairly well-skilled workforce helped as well. Examples of successful policies can actually be found across the entire typology of jobs challenges figure As an urbanizing country, Korea carefully designed and phased policies to accompany the transition of jobs from agriculture to light manufacturing and then to industries with higher value added. Housing and transportation policies held the diseconomies of urbanization in check. Tonga, a small island nation, is actively using the Recognized Seasonal Employer program launched by. New Zealand in to provide employment opportunities through migration, leading to higher remittances, improved knowledge of agricultural techniques, computer literacy, and English-language skills.

Over the past decade, job creation in the formal sector has been three times as rapid as in the informal sector. Just in the five years leading up to the crisis, the formal share of total employment increased by about 5 percentage points. Poland, an aging society, has seen its employment ratio increase from 60 percent in to 65 percent in This was due to changes in the application of eligibility rules of disability pensions, and pension reforms adjusting the level of benefits down as life expectancy increases. In , a new wave of pension reforms raised the retirement age to 67 for men and women from the current 65 for men and 60 for women.

Global partnerships for jobs Policies for jobs in one country can have spillovers to other countries, both positive and negative. An important issue is whether international coordination mechanisms could influence government decisions to enhance the positive spillovers and mitigate the negative. Several areas lend themselves to more and better coordination. Cross-border mechanisms exist to set standards and provide channels for improving compliance with rights.

ILO conventions can influence domestic legislation and be a channel for voice and coordination internationally, as demonstrated by the process of adopting the conventions for home-based and domestic workers. The support for core labor standards in the Declaration on Fundamental Principles and Rights at Work suggests that countries respond to pressure from the international community.

The persistence of forced labor, children working in hazardous conditions, discrimi-. From the ITUC perspective, what do you think about this fact? Specifically for freedom of association issues, I think for a World Bank Report, and I have read many of them; it is definitely the most complete and the most detailed justification of the importance of core labour standards, and I think it is very positive for the Bank.

Now how that will translate on a country level, and how the World Bank actually takes that lesson is another question. One message from this report is that growth is important, but growth alone is not enough for job creation. According to you, what should be the role of ILO core labour standards in this issue of job creation? They especially want to focus on unemployment that has spill-over, multiplier effects in other sectors. And they say in some cases, in some contexts, that can include informal economy employment.

Now I would point that out as a fundamental contradiction and I did in my response [at the meeting] this morning.