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Overview

Context

Jobs are the main source of income for the majority of the world’s people. Jobs provide much more than economic benefits: Jobs give people meaning and purpose, and help them contribute to their families, communities, and nations. Improving people’s livelihoods and earnings strengthens nations’ economies: By building more competitive and resilient economies, investment in new job creation can increase individuals’ returns from their current jobs and help them move from unemployment or low-return occupations to higher-productivity jobs.

Although the recovery from the global financial crisis is gradually progressing, more than 200 million people are out of work worldwide—and more than 1 billion are marginally employed in low-income or informal jobs that keep them earning below their potential. Women are less likely to enter the labor force, while in many countries more youth are filling the ranks of the unemployed. Even more challenging, a demographic surge will soon make the job-creation challenge even more urgent: The International Labour Organization (ILO) estimates that, during the next 10 years, the world will need to create more than 400 million jobs to avoid a further increase in unemployment.

To meet this challenge, countries must move beyond short-term mitigation of unemployment and confront deeper structural problems that undermine productivity and employment growth. Many countries are not creating enough high-quality and sustainable jobs, and large shares of their populations are self-employed or work in low-productivity activities, households, or family businesses without pay. Earnings are often too low to pull households out of poverty—and the contraction of many countries’ economies has plunged millions of formerly middle-class families back below the poverty line. Additionally, many workers in developing countries are exposed to abuse, poor working conditions, exploitation, or lack of income protection.

Strategy

In response to the global crises in financial systems, food stocks, and fuel supplies, the World Bank Group increased its labor lending from an annual average of $477 million in 1998-2008 to an annual average of $634 million for 2009-2011. From 1998-2011, the Bank Group supported job creation and worker protection activities in 103 countries, with total lending reaching $7.14 billion ($5.46 billion through International Bank for Reconstruction and Development lending, $1.64 billion through International Development Association lending, and $38 million in grants).

With Bank Group lending, technical assistance, and economic sector work, countries are protecting workers and investing in programs that help promote job creation through initiatives such as guiding financial and private sector reform in countries, managing macroeconomic policy, monitoring the investment climate, pursuing strategic analysis of industrial sectors, strengthening financial systems, investing in public works and infrastructure, providing employment services and training, ensuring unemployment benefits, supporting small-scale businesses and the self-employed, and broadening access to credit.

The Bank Group’s job-creation initiatives coordinate efforts on macroeconomic policy, the investment climate, industrial development, innovation and entrepreneurship, private-sector development, labor regulations, education and skills, and social protection. These policies focus on: (i) accelerating growth through competitiveness and prudent macro and fiscal management; (ii) providing incentives and conditions for expanding employment opportunities; (iii) ensuring that enough high-quality work—salaried and non-salaried—can be created; and (iv) managing risks and facilitating labor-market transitions. To help countries meet their job-related challenges, the Bank Group is providing technical assistance as well as lending and investment, building an evidence base for successful interventions, and promoting cross-country learning.

The Bank’s World Development Report 2013 will identify the obstacles to sustained job creation. The report explores the notion of a "good job" in that some jobs do more for economic and social development than others.

Results

Bank support to countries is contributing some of the following country-level results:

  • The Liberian government is generating temporary employment for young people through a cash-for-work program, and is helping them develop job-appropriate skills.
  • In Uganda, more than 6,000 unemployed youth have started enterprises and have improved their economic livelihoods.
  • In China, provinces are delivering training, improving labor market information and public employment services for rural migrants, improving employment conditions of migrant workers, and increasing awareness of worker rights and supporting legal services for migrants.
  • In Malaysia, the Bank helped the government institute a national minimum wage for the first time.
  • In Armenia, Azerbaijan, and Serbia, national employment services and labor inspectorates are being upgraded and the countries are improving their employment protection legislation.
  • In Bulgaria, more than 700,000 people are benefitting from improvements in employment services, training, small business support, and local economic development planning.
  • In Turkey, the government is launching projects that provide quality vocational training.
  • In Brazil, the government is improving the quality dimensions of big gains in employment and wages in recent years, which will ultimately help sustain productivity increases and growth.
  • In Brazil, Chile, and Colombia, the countries are developing unemployment benefit systems based on savings, which will provide better incentives to search for and keep jobs.
  • In Columbia, the government is improving institutional practices and its regulatory environment, thus promoting higher employment and employability.
  • In the Dominican Republic, the government is building the technical skills, work experience, and life skills of 13,000 youth ages 16-29.
  • In El Salvador, a program is guaranteeing a minimum level of income to poor urban families, funding the participation of people working in projects submitted by municipalities, with an emphasis on social services and innovative training.
  •  In Afghanistan, Jordan, Lao Peoples Democratic Republic, Liberia, Nepal, Rwanda, South Sudan, and Nepal, projects are increasing young women’s economic opportunities by improving their skills and access to the labor market; agricultural land; and technology, credit, and infrastructure services.
  • In Tunisia, a program has worked with about 140,000 youth as they transition from school to work, offering stipends, training, counseling, job-search assistance, and wage subsidies.
  • A new Bhutan labor code is improving working conditions and labor relations.
  • India is offering business development and mentoring underprivileged entrepreneurs. Since the program began, more than 1,200 youth entrepreneurs have emerged, generating more than 11,700 new jobs.



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