2013world development reportISBN 978-0-8213-9620-9SKU 19620Jobs provide higher earnings and better benets as countries grow, but they are also a driver of development. Poverty falls as people work their way outof hardship and as jobs empowering women lead to greater investmentsin children. Efciency increases as workers get better at what they do, as more productive jobs appear, and less productive ones disappear. Societies ourish as jobs bring together people from different ethnic and social backgrounds and provide alternatives to conict. Jobs are thus more than a byproduct of economic growth. They are transformationalthey are what we earn, what we do, and even who we are.High unemployment and unmet job expectations among youth are the most immediate concerns.But in many developing countries, where farming and self-employment are prevalent and safety nets are modest at best, unemploy-ment rates can be low. In these countries, growth is seldom jobless. Most of the poor work long hours but simply cannot make ends meet. And the violation of basic rights is not uncommon.Therefore, the number of jobsis not all that matters: jobs with high development payoffs are needed.Confronted with these challenges, policy makers ask difcult questions. Should countries build their development strategies around growth, or should they focus on jobs? Can entrepreneurship be fostered, especially among the many microenterprises in developing countries, or are entrepre-neurs born? Are greater investments in education and training a prerequisite for employability, or can skills be built through jobs? In times of major crises and structural shifts, should jobs, not just workers, be protected? And is there a risk that policies supporting job creation in one country will come at the expense of jobs in other countries?The World Development Report 2013: Jobs offers answers to these and other difcult questions by looking at jobs as drivers of developmentnot as derived labor demandand by considering all types of jobsnot just formal wage employment.The Report provides a framework that cuts across sectors and shows that the best policy responses vary across countries, dependingon their levels of development, endowments, demography, and institutions. Policy fundamentals matter in all cases, as they enable a vibrant private sector, the source of most jobs in the world. Labor policies can help as well, evenif they are less critical than is often assumed.Development policies, from making smallholder farming viable to fostering functional cities to engaging in global markets, hold the key to success. JobsAbout the coverIn almost every language there is a range of words related to jobs, each emphasizing a different angle. Some words hint at the nature of the activity being performed, evoking the skill or expertise that is required. Others refer to the volume of human inputs used in production, bringing images of effort and con-veying a sense of physical exertion. There are also words asso-ciated with the sheer numbers of people engaged in economic activity,whicharemoreeasilyassociatedwithaggregatesta-tistics. Inothercases,whatseems tobeatstakeis acontrac-tual relationship, involving mutual obligations and a degree of stability. In some languages, there are even words to designate the place where the person works, or at least a slot in a produc-tion process. This multiplicity of words clearly shows that jobs are multi-dimensional and cannot be characterized by a single term or measured by a single indicator.Words related to jobs do not always translate well from one language to another, as the range of options available in each casecanbedifferent.Iflanguagesshapethinking,thereare times when the ways in which people refer to jobs seem to be at odds. Gaps probably arise from the different characteristics of jobs being emphasized in different societies. They also sug-gest that jobs agendas can differ across countries.In many languages, words related to jobs serve not only as commonnounsbutalsoaspropernouns.Throughouthis-tory family names have been associated with specic skills or trades: Vankar in Hindi, Hattori in Japanese, Herrero in Span-ish,orMfundisiinZulu,justtomentionafew.Theuseof job-related words as household identiers shows that people associated themselves with what they did. Nowadays, people aspire to choose their jobs based on what motivates them and on what could make their lives more meaningful. In almost every language there are also several words to express the lack of a job. Almost invariably these words have a negative connotation, close in spirit to deprivation; at times they even carry an element ofstigma.Inalltheseways,languageconveystheideathatjobsaremorethanwhatpeople earn, or what they do at work: they are also part of who they are. AfrikaansLithuanianUkrainianFarsiHebrewMaoriBasqueTswanaMohawkGalicianBengaliRomanian SwahiliRussianTamilTurkishDutchZuluShonaHungarianPolishGuaranCroatianGermanGreekEnglishBurmesePortuguesePortugueseHindiYorbTibetanAmharic RomaSpanishJuba ArabicQuechuaRomanshJapaneseDinkaAymaraRomaFinnishIcelandicGeorgianSwedishBahasaWelshTagalogGaArabicMalagasyBulgarianIndonesian/MalaysianFrenchItalianThaiChineseKoreanUrduMapucheAlbanianTajikiGaelicKirundiVietnameseJobs 2012 International Bank for Reconstruction and Development / The World Bank1818 H Street NW, Washington DC 20433Telephone: 202-473-1000; Internet: www.worldbank.orgSome rights reserved1 2 3 415 14 13 12This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. 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Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for com-mercial purposes, under the following conditions:AttributionPlease cite the work as follows: World Bank. 2012. World Development Report 2013: Jobs. Washington, DC: World Bank. DOI: 10.1596/978-0-8213-9575-2. License: Creative Commons Attribution CC BY 3.0. TranslationsIf you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an ofcial World Bank translation. 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Further permission required for reuse.Cover design: Will Kemp, World BankInterior design: Debra NaylorvContentsForewordxiiiAcknowledgmentsxvAbbreviations and data notesxviiOverviewMoving jobs center stage2Jobs wanted3Development happens through jobs8Valuing jobs14Jobs agendas are diverse . . . but connected17Policies through the jobs lens21Jobs are center stage, but where are the numbers?34QuestionsWhen is the conventional wisdom right? 36Notes39References411 The jobs challenge48A job, but not always a salary49Youth bulges, aging societies, and migrant nations51Cities, wages, and women52Jobs are changing in surprising ways54Prosperity, but a changing distribution of earnings56The role of the private sector58Vulnerability on a global scale58Question 1What is a job? 63Notes68References69viCONTENTSPart 1Jobs are transformational742 Jobs and living standards76Jobs improve material well-being76Jobs are more than just earnings82Jobs and life satisfaction84Question 2Growth strategies or jobs strategies?87Notes92References933 Jobs and productivity98Employment turbulence, not jobless growth98Most jobs are in very small farms and rms104In farms, uneven technological progress106Among rms, much churning and few gazelles107Question 3Can entrepreneurship be fostered?114Notes119References1214 Jobs and social cohesion126Jobs can help manage social tensions127Jobs (or the lack of jobs) can shape social interactions134Question 4Can policies contribute to social cohesion? 140Notes146References147Part 2What are good jobs for development?1525 Valuing jobs154Rights as the foundation155The value of jobs to individuals and society158Spillovers from jobs159Can the development payoffs from jobs be quantied?162Question 5Skills or jobswhich comes rst?174Notes179References1826 Diverse jobs agendas190Agrarian economies190Conict-affected countries193Urbanizing countries197Resource-rich countries199Small island nations203ContentsviiCountries with high youth unemployment206Formalizing economies210Aging societies213Question 6A targeted investment climate?217Notes223References2257Connected jobs agendas232Migration of workers232Migration of jobs237Question 7Competing for jobs? 243Notes249References250Part 3Policies through the jobs lens2568 Labor policies revisited258Labor regulations: A plateau effect260Collective representation: New forms of voice263Active labor market programs: Effective within limits267Social insurance: The challenge of expanding coverage272Question 8Protecting workers or protecting jobs?277Notes281References2849 Beyond labor policies292Establishing the fundamentals293Setting policy priorities for jobs298Diverse jobs agendas, diverse policy priorities301Connected jobs agendas: Global partnerships for jobs305Jobs are center stage, but where are the numbers?311Question 9How to accelerate labor reallocation?313Notes319References321Appendixes328Glossary329Bibliographical note332Background papers and notes334Selected indicators337Index381viiiCONTENTSBoxes 1How does womens labor force participation increase?301.1 The nature of work and leisure change as cities develop531.2 Jobs bring earnings opportunities to women, but also new difculties541.3 The temporary stafng industry is growing in developing countries571.4Responses to the crisis went beyond income support for the unemployed621.5Few countries produce statistics on informality641.6Not all child work is child labor 662.1 There many dimensions of living standards and many ways to measure them772.2 Most poor people work802.3 The value of job attributes can be quantied through hedonic pricing832.4Work can pose risks to health and safety842.5The relationship between growth and employment is not mechanical882.6Korea went from a growth to a jobs strategy, and Singapore the oher way around903.1 What drives economic growth?993.2 Microenterprises account for most job creation and destruction1063.3 Most microenterprises are in rural areas and engage in commerce1103.4 What explains the boom in the garment industry in Bangladesh? 1174.1 What is social cohesion? 1284.2 Do jobs cause trust? Analysis of Eurobarometer and Latinobarmetro Surveys1324.3 Displacement and unemployment can lead to the erosion of trust and ties1334.4 Jobs, motivation, and identity in Risaralda, Colombia1344.5Voice can be extended to the self-employed: The case of SEWA1354.6Some jobs connect people across ethnic boundaries1364.7 Measuring inequality of opportunities in access to jobs1384.8Domestic workers: The journey to an ILO convention1414.9From laws on the books to laws in action in Cambodias garment sector1424.10In post-conict settings, well-designed programs reduce social tensions1435.1 Children do perilous work in artisanal gold mines in Mali1555.2Compliance with core labor standards is partial 1575.3The concept of Decent Work and the Decent Work Agenda1585.4Economics and the social sciences deal with spillovers from jobs, under different names1605.5Several data sources can be used to quantify the development payoffs from jobs1635.6International denitions of green jobs can be too narrow for developing countries1705.7How skills are formed, and how they can be measured1755.8Manpower planning has given way to dynamic skills development1776.1 Can agrarian Ethiopia compete in manufacturing? 1946.2 Conict can increase labor force participation among women 1946.3 Solving jobs challenges is urgent in South Sudan1956.4 Development pessimism about Bangladesh was understandable, but has been proven wrong 1976.5 The entrepreneurs of Bangladesh are local1986.6 Landowner companies can build capacity while spreading the wealth 2036.7 The debate on how to reduce informality is intense in Mexico2126.8In Ukraine, the impact of aging is compounded by migration and declining fertility2166.9Once again, the debate rages over industrial policy2186.10Caution is needed when interpreting results from enterprise surveys2196.11Special economic zones have a mixed record2217.1Why do multinationals locate where they do?2407.2E-links create job opportunities in developing countries, but the scale is still modest2407.3Globalization is often viewed as jobs migrating abroad2448.1Employment protection legislation covers more than ringrules2608.2 Are bargaining councils the cause of unemployment inSouth Africa?2658.3 New forms of collective bargaining are emerging in China2668.4Recicladores forced changes in Bogots solid waste management policies2678.5E-links to jobs: New technologies open new frontiers2688.6The Mahatma Gandhi National Rural Employment Guarantee Act launched the biggest public works program in the world2718.7Modern technology can reduce social protection costs, leakage, and corruption276ContentsixFigures 1A job does not always come with a wage52Among youth, unemployment is not always the issue63In China, employment growth is led by the private sector84Jobs are transformational85Jobs provide higher earnings and benets as countries grow96Jobs account for much of the decline in extreme poverty107Simultaneous job creation and destruction characterize all economies118Larger rms pay higher wages129The employment share of microenterprises is greater in developing countries1310People who are unemployed, or do not have motivating jobs, participate less in society1411Views on preferred jobs and most important jobs differ1612Some jobs do more for development1713The individual and social values of jobs can differ1714Good jobs for development are not the same everywhere2015Manufacturing jobs have migrated away from high-income countries2216Three distinct layers of policies are needed2317Finance and electricity are among the top constraints faced by formal private enterprises2418Combining work and training increases the success rates of programs2719A decision tree can help set policy priorities2820Which countries succeeded at addressing their jobs challenges and how?321.1 A job does not always come with a wage501.2 Among youth, unemployment is not always the issue511.3 Employment growth is needed to cope with population growth521.4 Moving from farms to cities does not always bring economic growth 531.5 Labor productivity remains low in developing countries 551.6 The skills mix changes with economic development 561.7 Jobs provide higher earnings and benets as countries grow 571.8 Wages in developing countries are catching up 591.9 Returns to education are higher in poorer countries 601.10In China, employment growth is led by the private sector601.11In developing countries, the crisis affected earnings more than employment611.12A majority of countries have ratied the core labor standards652.1 Working hours vary across ages 782.2 Women spend more time in activities not directly generating income792.3 Jobs are the most important source of household income802.4 Jobs take households out of poverty, especially in developing countries812.5 Jobs account for much of the decline in extreme poverty822.6 Workers often care more about job security than about income852.7 Life satisfaction is lower among farmers and the unemployed863.1 Economic growth does not occur at the expense of jobs in the medium term993.2 Simultaneous job creation and destruction characterize all economies 1003.3 Labor reallocation across sectors was a driver of productivity growth in East Asia1013.4 Efciency gains at the rm level are the main driver of productivity growth1023.5 Efciency gains and employment growth can go together1033.6 Smallholder farming is dominant outside Latin America1043.7 The employment share of microenterprises is greater in developing countries 1053.8 Crop yields have diverged vastly across regions1073.9 The dispersion of productivity in manufacturing is greater in developing countries 1088.8Kurzarbeit has become a new word in labor market policies2809.1How does womens labor force participation increase?3009.2 There have been successes in tackling jobs challenges around the world3029.3Improving business practices facilitates compliance with labor standards3079.4Knowledge gaps on jobs and development chart the research agenda3129.5Chinas hukou system has been partially liberalized315xCONTENTS3.10 Large rms tend to perform better and to pay better than small ones1093.11 Young rms are more likely than old ones to engage in innovative activities1093.12Surviving rms were born larger and grew less in Ghana than in Portugal1113.13The majority of rms grew little in India and Mexico1123.14Some among the self-employed have the potential to become successful entrepreneurs1153.15Management scores vary widely across small enterprises in Sub-Saharan Africa1164.1 Trust and civic engagement go together with peaceful collective decision making1294.2 People who are unemployed trust and participate less1304.3 People with motivating jobs trust and participate more1314.4 Having a job means more community participation in Indonesia1324.5 Inequality of job opportunities varies across countries1395.1 Views on preferred jobs and most important jobs differ1595.2Some jobs do more for development1605.3The individual and social values of jobs can differ1625.4Some earnings gaps decrease with the level of development; some do not 1655.5A higher womens share of household income raises food expenditures in the Republic of Congo1665.6Who gets the jobs matters for poverty reduction in Bulgaria and Latvia1665.7Agglomeration effects vary across industrial sectors in Taiwan, China1675.8Knowledge spillovers from foreign direct investment increase domestic productivity1685.9High emissions per worker can go hand in hand with low emissions per unit of output1695.10Proximity of garment factories stimulates schooling among young girls in Bangladesh1715.11Not all jobs provide social identity, networks, or a sense of fairness1725.12Gender and fathers education account for a large share of inequality of opportunity in access to jobs1735.13Relative to other obstacles, skills have become more severe constraint to business1756.1In the absence of a Green Revolution, poverty remains high in agrarian economies 1926.2 Instability and poor infrastructure are severe constraints on business in conict-affected countries1966.3 Small island nations are located far away from economic centers2046.4Migration matters for small island nations, even more so in the Pacic2056.5 Youth unemployment rates are extremely high in some countries2076.6Having higher education does not bring better employment chances in Tunisia 2086.7 Labor regulation may not be the biggest obstacle to formalization2116.8The labor force will shrink if age-specic participation rates remain constant 2146.9Labor productivity has to increase to avoid declines in living standards2156.10The assessment of constraints to business varies across enterprises2207.1Manufacturing jobs have migrated away from high-income countries2387.2The global number of manufacturing jobs has not varied much2397.3Policies for jobs may or may not harm other countries2478.1The mix of labor policies and institutions varies across countries2598.2The coverage of collective bargaining is low in developing countries2648.3Combining work and training increases the success rates of programs2698.4In Romania, public works programs have the lowest placement rate and highest placement costs 2728.5Labor taxes and social contributions vary across different countries facing different job challenges2758.6Workers are willing to give up earnings for access to health insurance and pensions2758.7Decoupling between job creation and job destruction was massive in the United States during recessions2789.1Three distinct layers of policies are needed2939.2Finance and electricity are among the top constraints faced by formal private enterprises2959.3 The rule of law is associated with development 2979.4A decision tree can help set policy priorities2999.5Chile reduced its dependence on mineral exports3049.6Unemployment rates for youth have fallen in Slovenia3059.7Offers to liberalize services are generally modest3099.8Is there a missing middle in the distribution of manufacturing rms in India? 3149.9Export processing zones were a driver of foreign direct investment in Sri Lanka3169.10Restrictions to hukou conversion increase with city size and income317ContentsxiMaps1Only in some countries are migrants a substantial share of the population213.1Manufacturing activities are sprawling out of the main urban centers in the Republic of Korea1027.1Only in some countries are migrants a substantial share of the population2337.2Many migrants are highly skilled2358.1Coverage of social insurance remains low in many countries 274Tables3.1 Few small rms grew in Mexico1136.1 Projects in extractive industries are capital intensive and create few jobs 2006.2 Cities in resource-rich developing countries are among the most expensive in the world 2018.1There is a wave of new empirical evidence on the impacts of EPL2618.2The impacts of minimum wages are a favorite research topic in labor economics262xiiiForewordToday, jobs are a critical concern across the globefor policy makers, the business community, and the billions of men and women striving to provide for their families. As the world struggles to emerge from the global crisis, some 200 million peopleinclud-ing75millionundertheageof25areunemployed.Manymillionsmore,mostofthem women, nd themselves shut out of the labor force altogether. Looking forward, over the next 15 years an additional 600 million new jobs will be needed to absorb burgeoning working-age populations, mainly in Asia and Sub-Saharan Africa.Meanwhile, almost half of all workers in developing countries are engaged in small-scale farming or self-employment, jobs that typically do not come with a steady paycheck and ben-ets. The problem for most poor people in these countries is not the lack of a job or too few hours of work; many hold more than one job and work long hours. Yet, too often, they are not earning enough to secure a better future for themselves and their children, and at times they are working in unsafe conditions and without the protection of their basic rights.Jobs are instrumental to achieving economic and social development.Beyond their critical importanceforindividualwell-being,theylieattheheartofmanybroadersocietalobjec-tives, such as poverty reduction, economy-wide productivity growth, and social cohesion. The development payoffs from jobs include acquiring skills, empowering women, and stabilizing post-conictsocieties.Jobsthatcontributetothesebroadergoalsarevaluablenotonlyfor those who hold them but for society as a whole: they are good jobs for development.The World Development Report 2013 takes the centrality of jobs in the development pro-cess as its starting point and challenges and reframes how we think about work. Adopting a cross-sectoral and multidisciplinary approach, the Report looks at why some jobs do more for development than others. The Report nds that the jobs with the greatest development payoffs are those that make cities function better, connect the economy to global markets, protect the environment, foster trust and civic engagement, or reduce poverty. Critically, these jobs are not only found in the formal sector; depending on the country context, informal jobs can also be transformational.Building on this framework, the Report tackles some of the most pressing questions policy makersareaskingrightnow:Shouldcountriesdesigntheirdevelopmentstrategiesaround growthorfocusonjobs? Aretheresituationswherethefocusshouldbeonprotectingjobs as opposed to protecting workers? Which needs to come rst in the development processcreating jobs or building skills? The private sector is the key engine of job creation, accounting for 90 percent of all jobs in the developing world. But governments play a vital role by ensuring that the conditions are in place for strong private sectorled growth and by alleviating the constraints that hinder the private sector from creating good jobs for development.TheReportadvancesathree-stageapproachtohelpgovernmentsmeettheseobjectives. First,policyfundamentalsincludingmacroeconomicstability,anenablingbusinessenvi-ronment, investments in human capital, and the rule of laware 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. Third, governments should strategically identify xivFOREWORDwhich jobs would do the most for development given their specic country context, and re-move or offset the obstacles that prevent the private sector from creating more of those jobs. In todays global economy, the world of work is rapidly evolving. Demographic shifts, tech-nological progress, and the lasting effects of the international nancial crisis are reshaping the employmentlandscapeincountriesaroundtheworld.Countriesthatsuccessfullyadaptto these changes and meet their jobs challenges can achieve dramatic gains in living standards, productivity growth, and more cohesive societies. Those that do not will miss out on the trans-formational effects of economic and social development. The World Development Report 2013 is an important contribution to our collective under-standing of the role of jobs in development. Its insights will provide valuable guidance for the World Bank Group as we collaborate with partners and clients to advance their jobs agendas. Working together, we can foster job creation and maximize the development impact of jobs.Jim Yong KimPresidentThe World Bank GroupxvAcknowledgmentsThis Report was prepared by a team led by Martn Rama, together with Kathleen Beegle and JeskoHentschel.TheothermembersofthecoreteamwereGordonBetcherman,Samuel Freije-Rodriquez, Yue Li, Claudio E. Montenegro, Keijiro Otsuka, and Dena Ringold. Research analysts Thomas Bowen, Virgilio Galdo, Jimena Luna, Cathrine Machingauta, Daniel Pala-zov, Anca Bogdana Rusu, Junko Sekine, and Alexander Skinner completed the team. Addi-tional research support was provided by Mehtabul Azam, Nadia Selim, and Faiyaz Talukdar. The team beneted from continuous engagement with Mary Hallward-Driemeier, Roland Michelitsch, and Patti Petesch. The Report was cosponsored by the Development Economics Vice Presidency (DEC) and the Human Development Network (HDN). Overall guidance for the preparation of the Report was provided by Justin Lin, former Senior Vice President and Chief Economist, Development Economics; Martin Ravallion, acting Senior Vice President and Chief Economist, Develop-mentEconomics;andTamarManuelyan-Atinc,VicePresidentandHeadoftheHuman Development Network. Asli Demirg-Kunt, Director for Development Policy, oversaw the preparation process, together with Arup Banerji, Director for Social Protection and Labor. Former World Bank President Robert B. Zoellick, President Jim Yong Kim, and Manag-ing Directors Caroline Anstey and Mahmoud Mohieldin provided invaluable insights during thepreparationprocess.ExecutiveDirectorsandtheirofcesalsoengagedconstructively through various meetings and workshops.An advisory panel, comprising George Akerlof, Ernest Aryeetey, Ragui Assaad, Ela Bhatt, Cai Fang, John Haltiwanger, Ravi Kanbur, Gordana Matkovi c, and Ricardo Paes de Barros, contributed rich analytical inputs and feedback throughout the process. Seven country case studies informed the preparation of the Report. The case study for Bangladesh was led by Binayak Sen and Mahabub Hossain, with Yasuyuki Sawada. Nelly Agu-ilera, Angel Caldern Madrid, Mercedes Gonzlez de la Rocha, Gabriel Martnez, Eduardo Rodriguez-Oreggia,andHctorVillarrealparticipatedinMexicoscasestudy.Thestudy forMozambiquewasledbyFinnTarp,withChanningArndt,AntonioCruz,SamJones, and Fausto Mafambisse. For Papua New Guinea, Colin Filer and Marjorie Andrew coordi-nated the research. The South Sudan study was led by Lual Deng, together with Nada Eissa. AbdelRahmenElLahgacoordinatedtheTunisianwork,withtheparticipationofInes Bouassida,MohamedAliMarouani,BenAyedMouelhiRim,AbdelwahabBenHafaiedh, and Fathi Elachhab. Finally, Olga Kupets, Svitlana Babenko, and Volodymyr Vakhitov con-ducted the study for Ukraine.Theteamwouldliketoacknowledgethegeneroussupportforthepreparationofthe ReportbytheGovernmentofNorwaythroughitsMinistryofForeign Affairs,themulti-donor Knowledge for Change Program (KCP II), the Nordic Trust Fund, the Government of Denmark through its Royal Ministry of Foreign Affairs, the Swiss State Secretariat for Eco-nomic Affairs (SECO), the Canadian International Development Agency (CIDA), the Gov-ernment of Sweden through its Ministry for Foreign Affairs, and the Government of Japan xviACKNOWLEDGMENTSthrough its Policy and Human Resource Development program. The German Ministry for Economic Cooperation and Development Cooperation (BMZ) through the German Agency for International Cooperation (GIZ) organized a development forum that brought together leading researchers from around the world in Berlin.Generous support was also received for the country case studies by the Australian Agency forInternationalDevelopment(AusAID),CanadasInternationalDevelopmentResearch Centre (IDRC), the Government of Denmark through its Royal Ministry of Foreign Affairs, theJapanInternationalCooperationAgency(JICA)throughtheJICAInstitute,and theUnitedNationsUniversityWorldInstituteforDevelopmentEconomicsResearch (UNU-WIDER). The United Kingdoms Overseas Development Institute (ODI) assisted the team through the organization of seminars and workshops. A special recognition goes to the International Labour Organization (ILO) for its contin-ued engagement with the team. Jos Manuel Salazar-Xiriachs and Duncan Campbell coor-dinated this process, with the participation of numerous colleagues from the ILO. Interagency consultations were held with the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), and the United Nations Economic and Social Council (ECOSOC). The team also beneted from an ongoing dialogue with the Inter-national Trade Union Confederation (ITUC).Country consultations were conducted in Bangladesh, Canada, China, Denmark, Finland, France, Germany, India, Japan, the Republic of Korea, Mexico, Mozambique, Norway, Papua New Guinea, Singapore, Sweden, Switzerland, Tunisia, Turkey, Ukraine, and the United King-dom. All consultations involved senior government ofcials. Most included academics, business representatives, trade union leaders, and members of civil society. In addition, bilateral meet-ings were held with senior government ofcials from Australia, the Netherlands, South Africa, and Spain.Consultations with researchers and academics were arranged with the help of the African EconomicResearchConsortium(AERC)inKenya,theEconomicResearchForum(ERF) in the Arab Republic of Egypt, and the Latin American and Caribbean Economic Associa-tion (LACEA) in Chile. The Institute for the Study of Labor (IZA) organized special work-shops with its research network in Germany and Turkey, coordinated by Klaus Zimmerman. Forskningsstiftelsen Fafo in Norway undertook a household survey in four countries, which this Report draws on. TheproductionoftheReportandthelogisticssupportingitwereassuredbyBrnagh Murphy,MihaelaStangu,Jason Victor,andCcile Wodon,withacontributionbyQuyn Thy inh. Ivar Cederholm coordinated resource mobilization. Irina Sergeeva and Sonia Joseph were in charge of resource management. Martha Gottron, Bruce Ross-Larson, Gerry Quinn, and Robert Zimmermann participated in the editing of the Report. The Development Data Group, coordinated by Johan Mistiaen, contributed to the preparation of its statistical annex.The Ofce of the Publisher coordinated the design, typesetting, printing, and dissemina-tion of both the hard and soft versions of the Report. Special thanks go to Mary Fisk, Stephen McGroarty, Santiago Pombo-Bejarano, Nancy Lammers, Stephen Pazdan, Denise Bergeron, Andres Meneses, Theresa Cooke, Shana Wagger, Jose De Buerba, and Mario Trubiano, as well as to the Translations and Interpretation Units Cecile Jannotin and Bouchra Belfqih.The team also thanks Vivian Hon, as well as Claudia Seplveda, for their coordinating role; Merrell Tuck-Primdahl for her guidance oncommunication; Vamsee Krishna Kanchi and Swati P. Mishra for their support with the website; Gerry Herman for his help with the prepa-ration of the movie series associated with the Report; and Gytis Kanchas, Nacer Mohamed Megherbi, and Jean-Pierre S. Djomalieu for information technology support. Many others inside and outside the World Bank contributed with comments and inputs. Their names are listed in the Bibliographical Note.xviiAbbreviations and data notesABBREVIATIONSADBAsian Development BankALMPactive labor market programARBAsociacin de Recicladores de Bogot (Bogot Association of Recyclers)BPObusiness process outsourcingCAFTA Central America Free Trade AgreementCASENLa Encuesta de Caracterizacon Socioeconomica Nacional(Chile National Socioeconomic Characterization) CIRADCentre de coopration internationale en recherche agronomique pour le dveloppement (Center for International Cooperation in Agronomic Research for Development)CFACommittee on Freedom of AssociationCOSATUConfederation of South African Trade UnionsCSRcorporate social responsibilityECLACEconomic Commission for Latin America and the CaribbeanECOSOCUnited Nations Economic and Social CouncilEMBRAPAEmpresa Brasileira de Pesquisa Agropecuria(Brazilian Enterprise for Agricultural Research)EPLemployment protection legislationEPZexport processing zoneEUEuropean UnionFAOFood and Agriculture Organization of the United NationsFAFOForskningsstiftelsen Fafo (Fafo Research Foundation) FDIforeign direct investmentFACB freedom of association and collective bargainingGATTGeneral Agreement on Tariffs and TradeGATSGeneral Agreement on Trade in ServicesGDPgross domestic productGNPgross national productHOIHuman Opportunity IndexI2D2International Income Distribution DatabaseICIndustrial CouncilICLSInternational Conference of Labour StatisticiansICTWSSInstitutional Characteristics of Trade Unions,Wage Setting, State Intervention and Social PactsIDAIndustrial Disputes Act (India)IDRCInternational Development Research CenterIEAInternational Energy Agency IFCInternational Finance CorporationxviiiABBREVI ATI ONSANDDATANOTESIFPRIInternational Food Policy Research InstituteILOInternational Labour OrganizationIMFInternational Monetary FundIPCCInternational Panel on Climate ChangeISSPInternational Social Survey ProgrammeITinformation technologyIZAForschungsinstitut zur Zukunft der Arbeit (Institute for the Study of Labor)KILMKey Indicators of the Labor MarketKUTKorea University of Technology and Education MDGMillennium Development GoalMERCOSURMercado Comn del Sur (Southern Cone Common Market)MFAMulti-Fiber Arrangement MGNREGAMahatma Gandhi National Rural Employment Guarantee ActMISManagement Information SystemNASSCOMNational Association of Software and Service CompaniesNEET not in education, employment, or trainingNGOnongovernmental organization ODIOverseas Development InstituteOECDOrganisation for Economic Co-operation and DevelopmentPISAProgramme for International Student AssessmentPPPpurchasing power parityR&Dresearch and developmentSEWASelf Employed Womens AssociationSEZspecial economic zone SMEsmall and medium enterpriseSNASystem of National AccountsSOEstate-owned enterpriseTEWATermination of Employment of Workmen ActTFPtotal factor productivityTVEtechnical and vocational education UNUnited NationsUNDPUnited Nations Development ProgrammeUNECEUnited Nations Economic Commission of EuropeUNEPUnited Nations Environment ProgrammeUNESCOUnited Nations Educational, Scientic and Cultural OrganizationWDRWorld Development ReportWTOWorld Trade OrganizationWIEGOWomen in Informal Employment: Globalizing and OrganizingDATA NOTES The use of the word countries to refer to economies implies no judgment by the World Bank about the legal or other status of territory. The term developing countries includes low- and middle-income economies and thus may include economies in transition from central plan-ning,asamatterofconvenience.DollarguresarecurrentU.S.dollars,unlessotherwise specied. Billion means 1,000 million; trillion means 1,000 billion.Jobsarethecornerstoneofeconomicand socialdevelopment.Indeed,development happensthroughjobs.Peopleworktheir way out of poverty and hardship through bet-terlivelihoods.Economiesgrowaspeopleget better at what they do, as they move from farms to rms, and as more productive jobs are cre-atedandlessproductiveonesdisappear.Soci-etiesourishasjobsbringtogetherpeople fromdifferentethnicandsocialbackgrounds andnurtureasenseofopportunity.Jobsare thustransformationaltheycantransform whatweearn,whatwedo,andevenwhowe are. Nosurprise,then,thatjobsareatopthe developmentagendaeverywhereforevery-onefrompolicymakerstothepopulace,from businessleaderstounionrepresentatives,from activiststoacademics.Lookingtoseizeoppor-tunitiesforjobcreationpresentedbymassive demographicshifts,technologicalinnovations, global migrations of people and tasks, and deep changes in the nature of work, policy makers ask difcult questions: Shouldcountriesbuildtheirdevelopment strategiesaroundgrowthorshouldthey rather focus on jobs? Canentrepreneurshipbefostered,especially amongthemanymicroenterprisesindevel-oping countries, or are entrepreneurs born? While jobs can contribute to social cohesion, is there anything governments can do about it, apart from trying to support job creation? Aregreaterinvestmentsineducationand trainingaprerequisiteforemployability,or can skills be built through jobs? Should efforts to improve the investment cli-mate target the areas, activities, or rms with greater potential for job creation? Whatistheriskthatpoliciestofosterjob creationinonecountrywillcomeattheex-pense of jobs in other countries? When confronted with large shocks and ma-jor restructuring, is it advisable to protect jobs and not just people? Howcanthereallocationofworkersbeac-celeratedfromareasandactivitieswithlow productivity to those with greater potential?Individualsvaluejobsfortheearningsand benets they provide, as well as for their contri-butions to self-esteem and happiness. But some jobshavebroaderimpactsonsociety.Jobsfor womencanchangethewayhouseholdsspend moneyandinvestintheeducationandhealth ofchildren.Jobsincitiessupportgreaterspe-cializationandtheexchangeofideas,making otherjobsmoreproductive.Jobsconnected toglobalmarketsbringhomenewtechnologi-Moving jobs center stageOVERVIEWMoving jobs center stage3triesgrowricher,thepolicyenvironment mustbeconducivetogrowth.Thatrequires attending to macroeconomic stability, an en-ablingbusinessenvironment,humancapital accumulation, and the rule of law. Labor policies. Because growth alone may not beenough,laborpoliciesneedtofacilitate jobcreationandenhancethedevelopment payoffs from jobs. Policies can address labor market distortions while not being a drag on efciency. But they should avoid distortion-aryinterventionsthatconstrainemploy-ment in cities and global value chainsand providevoiceandprotectionforthemost vulnerable. Priorities.Becausesomejobsdomorefor developmentthanothers,itisnecessaryto identifythetypesofjobswiththegreatest developmentpayoffsgivenacountryscon-text,andtoremoveoratleastoffsetthe marketimperfectionsandinstitutionalfail-ures that result in too few of those jobs being created.Thecentralityofjobsfordevelopment shouldnotbeinterpretedasthecentralityof laborpoliciesandinstitutions.Nearlyhalf thepeopleatworkindevelopingcountries arefarmersorself-employedandsoareout-side the labor market. And even in the case of wageemployment,laborpoliciesandinstitu-tions may or may not be the main obstacle to job creation. Often, the most relevant obstacles lieoutsideofthelabormarket.Thecatalysts for job creation may be policies that make cit-iesworkbetter,helpfarmersaccessandapply appropriateagriculturaltechniques,orallow rms to develop new exports. Jobs are the cor-nerstoneofdevelopment,anddevelopment policies are needed for jobs.Jobs wantedTo many, a job brings to mind a worker with anemployerandaregularpaycheck.Yet,the majorityofworkersinthepoorestcountries are outside the scope of an employer-employee relationship.Worldwide,morethan3billion peopleareworking,buttheirjobsvarygreatly. Some 1.65 billion are employed and receive reg-cal and managerial knowledge. And in turbulent environments, jobs for young men can provide alternatives to violence and help restore peace.Throughtheirbroaderinuenceonliving standards,productivity,andsocialcohesion, these jobs have an even greater value to society thantheydofortheindividual.Butsomejobs canhavenegativespillovers.Jobssupported throughtransfersorprivilegerepresentabur-den to others or undermine their opportunities to nd remunerative employment. Jobs damag-ingtheenvironmenttakeatolloneverybody. Thus it is that some jobs do more for develop-ment, while others may do little, even if they are appealing to individuals.Whichjobshavethegreatestdevelop-mentpayoffsdependsonthecircumstances. Countries differ in their level of development, demography,endowments,andinstitutions. Agrarian socie ties face the challenge of making agriculturaljobsmoreproductiveandcreat-ing job opportunities outside farms. Resource-richcountriesneedtodiversifytheirexports, sothatjobsareconnectedtoglobalmarkets ratherthansupportedthroughgovernment transfers.Formalizingcountriesneedtode-signtheirsocialprotectionsystemsinways thatextendtheircoveragewithoutpenalizing employment. Avastmajorityofjobsarecreatedbythe privatesector.Governments,though,cansup-portorhindertheprivatesectorincreat-ingjobs.Theideathatdevelopmenthappens throughjobsshedsnewlightonthestrategies, policies,andprogramsgovernmentscanpur-sue.Strategiesshouldidentifywhichtypesof jobswouldhavethehighestdevelopmentpay-offs,givenacountryscircumstances.Policies shouldremovetheobstaclesthatpreventthe private sector from creating jobs. Programs for generating employment may also be warranted, forinstance,inconict-affectedcountries.But the costs and benets of these policies and pro-gramshavetobeassessed,takingintoaccount the potential spillovers from jobs, both positive and negative.Atamorepracticallevel,thisjobslenson devel opmentleadstoathree-layeredpolicy approach: Fundamentals.Becausejobsprovidehigher earnings and broader social benets as coun-4WORLDDEVELOPMENTREPORT20131.59011510600213077%2x22x 9x10x39% 97%3%28%60%1.6621billion people working infarming and self-employmentmillion people working abroadmillion childrenworking in hazardous conditionsmillion entrants to the labor forceper year in Sub-Saharan Africamillion jobs needed over 15 yearsto keep current employment ratesmillionvictims of forced labormillion postsecondarystudents in Chinalabor force participationby women in Vietnamemployment growthin a rm in Mexico over 35 yearsthe productivity gap between manufacturing rms in the 90th and 10th percentiles in Indiathe productivity gap between manufacturing rms in the 90th and 10th percentiles in the United Statesemployment growth in a rm in the United States over 35 yearsof the manufacturing jobsare in microenterprisesin Chileinternational migrants as a share of the world population of the manufacturing jobsare in microenterprisesin Ethiopiaforeign-born population in Kuwait,Qatar, and the United Arab Emirateslabor force participationby women in Pakistan billion people working fora wage or a salarymillion youth neither working nor studyingMoving jobs center stage5rights as the boundaries of what is unacceptable. Among them are the United Nations Universal DeclarationofHumanRights(1948)andthe International Labour Organization Declaration on Fundamental Principles and Rights at Work (1998), which further species core labor stan-dards.Combiningthesedifferentperspectives, jobsareactivitiesthatgenerateincome,mone-tary or in kind, without violating human rights.Different places, different jobsThe world of work is particularly diverse in de-velopingcountries.Thisvarietyrefersnotonly to the number of hours worked and the number ofjobsavailable,theusualyardsticksinindus-trial countries, but also to the characteristics of jobs.Twomainaspectsstandout.Oneisthe prevalenceofself-employmentandfarming.2 Theotheristhecoexistenceoftraditionaland modern modes of production, from subsistence agriculture and low-skilled work to technology-drivenmanufacturingandservicesandhighly skilled knowledge work.While nearly half of the jobs in the developing world are outside the labor market, the shares of wage work, farming, and self- employment differ greatly across countries.3 Nonwage work repre-sentsmorethan80percentofwomensem-ployment in Sub-SaharanAfricabut less than ular wages or salaries. Another 1.5 billion work in farming and small household enterprises, or in casual or seasonal day labor. Meanwhile, 200 million people, a disproportionate share of them youth, are unemployed and actively looking for work.Almost2billionworking-ageadults,the majorityofthemwomen,areneitherworking nor looking for work, but an unknown number of them are eager to have a job. Clarifying what is meant by a job is thus a useful starting point.Themeaningofthewordsusedtode-scribewhatpeopledotoearnalivingvaries acrosscountriesandcultures.Somewordsre-fer to workers in ofces or factories. Others are broader,encompassingfarmers,self-employed vendors in cities, and caregivers of children and the elderly. The distinction is not merely seman-tic.Thevariedmeaningshintatthedifferent aspects of jobs that people value. And views on whatajobisalmostinevitablyinuenceviews on what policies for jobs should look like.Forstatisticians,ajobis asetoftasksand dutiesperformed,ormeanttobeperformed, byoneperson,includingforanemployeror inself-employment.1Jobsareperformedby the employed. These are dened as people who producegoodsandservicesforthemarketor fortheirownuse.Butthestatisticaldenition ismuteaboutwhatshouldnotbeconsidered ajob.Internationalnormsviewbasichuman FI GURE1 A job does not always come with a wageSource: World Development Report 2013 team.Note: Data are for the most recent year available.nonwageemploymentwage employmentself-employmentfarmingshare of total employment, %100men women806040200Europe andCentral AsiaLatin Americaand theCaribbeanSouthAsiaEast Asiaand PacicSub-SaharanAfricaMiddle EastandNorth Africa6WORLDDEVELOPMENTREPORT2013for both men and women in Tanzania and Viet-nam. Beyond these stark contrasts in participa-tion,womencontinuetoearnsignicantlyless thanmen,andthedifferencesarenotfullyex-plainedbyeducation,experience,orsectorof work. Whileagrowingshareofyouthbetween ages15and24allocatemostoftheirtimeto schooling and training, youth unemployment is stillalarminginsomecountries(above40per-cent in South Africa since early 2008 and above 50percentinSpaininearly2012).5Evenin countries where it is low, youth unemployment istwicethenationalaverageormore.Inaddi-tion,621millionyoungpeopleare idlenot inschoolortraining,notemployed,andnot lookingforwork.Ratesofidlenessvaryacross countries,rangingbetween10and50percent among15-to24-year-olds(gure2).6Many youth work in unpaid jobs; if paid, they are less likely to have social insurance.7The changing world of workThiscomplexpictureiscompoundedbymas-sivedemographicshifts.Tokeepemployment asashareoftheworking-agepopulationcon-stant, in 2020 there should be around 600 mil-lion more jobs than in 2005, a majority of them inAsiaandSub-SaharanAfrica.Whilesome countries have experienced very large increases intheirlaborforcenearly8millionnewen-trants a year in China since the mid-1990s and 7 million in Indiaothers face a shrinking popu-lation. Ukraines labor force, for example, is es-timated to fall by about 160,000 people a year.8Rapidurbanizationischangingthecom-positionofemployment.Morethanhalfthe populationindevelopingcountriesisexpected tobelivingincitiesandtownsbefore2020.9 Asaresult,thegrowthofthenonagricultural labor force will vastly exceed the growth of the agricultural labor force. This structural change, which in industrial countries took decades, now transformslivesindevelopingcountriesina generation.Structuralchangecanbringabout remarkableimprovementsinefciency,and somedevelopingcountrieshavenarrowedthe productivity gap with industrial countries rap-idly. But others have failed to catch up.10 Over-all,thegapbetweendevelopinganddeveloped regions remains wide. Globalizationisalsochangingthenature ofjobs.Industrialcountriesareshiftingfrom 20percentinEasternEuropeandCentralAsia (gure 1). Workacrossthedevelopingworldisalso characterized by a high prevalence of informal-ity, whether dened on the basis of lack of rm registration,lackofsocialsecuritycoverage,or lackofanemploymentcontract.Informalem-ployment is not under the purview of labor reg-ulations, either because of their limited scope or because of deliberate avoidance or evasion. Re-gardless of the specic denition used, informal-ity is generally associated with lower productiv-ity. However, this does not necessarily mean that formalization would result in greater efciency. Informality can be a symptom of lower produc-tivity as much as it can be a cause of it.4Genderandagedifferencesarestriking. Worldwide, fewer than half of women have jobs, comparedwithalmostfour-fthsofmen.In Pakistan,28percentofwomenbutmorethan 82 percent of men participate in the labor force, whereas participation rates are above 75 percent FI GURE2 Among youth, unemployment is not always the issueSource: World Development Report 2013 team.Pakistan2008Turkey2005India2009Indonesia2010Chile2009Brazil2009Ukraine2005Ghana2005Tanzania20090 10 20 30 40 50 60not looking for worknot in school or at workshare of population ages 1524, %looking for workwomenmenMoving jobs center stage7Between1995and2005,theprivatesectorac-countedfor90percentofjobscreatedinBra-zil,andfor95percentinthePhilippinesand Turkey.21Themostremarkableexampleofthe expansion of employment through private sec-tor growth is China. In 1981, private sector em-ploymentaccountedfor2.3millionworkers, whilestate-ownedenterprises(SOEs)had80 million workers.22 Twenty years later, the private sector accounted for 74.7 million workers, sur-passing, for the rst time, the 74.6 million work-ers in SOEs (gure 3). Incontrasttotheglobalaverage,insome countries in the Middle East and North Africa, the state is a leading employer, a pattern that can belinkedtothepoliticaleconomyofthepost-independence period, and in some cases to the abundance of oil revenues.23 For a long period, public sector jobs were offered to young college graduates. But as the scal space for continued expansion in public sector employment shrank, queuingforpublicsectorjobsbecamemore prevalent,leadingtoinformality,adevaluation ofeducationalcredentials,andformsofsocial exclusion.24Afairlywell-educatedandyoung laborforceremainsunemployed,orunderem-ployed, and labor productivity stagnates.25Overall,countrieshavebeensuccessfulat creating jobs. More people have jobs now than everbefore,andthosejobsprovidegenerally higherearnings.Indeed,amidrapidsocialand economicchange,povertyhasdeclinedinde-velopingcountries.Theshareofthepopula-tion of the developing world living on less than US$1.25 a day (in purchasing power parity) fell from 52 percent in 1981 to 22 percent in 2008, orfrom1.94billionpeopleto1.29billion.26 Thisreductionistheresultofmultiplefactors, butthecreationofmillionsofnew,morepro-ductivejobs,mostlyinAsiabutalsoinother partsofthedevelopingworld,hasbeenthe main driving force.27Jobs are vulnerable to economic downturns, though, much more so in the private sector than thepublicsector.Short-termcrisesmaywipe out years of progress. They may start in a single country but now, through globalization, spread overentireregionsortotheworld.Therecent nancialcrisiscreated22millionnewunem-ployed in a single year. Growth in total employ-ment, hovering around 1.8 percent a year before 2008,felltolessthan0.5percentin2009,and by 2011 had not yet reached its pre-crisis level.28 primaryandtraditionalmanufacturingindus-triestowardservicesandknowledge-intensive activities.11Atthesametime,technological improvementsandoutsourcingtodeveloping countriesareleadingtoadeclineinmedium-skilled jobs.12 Production tasks have been splin-tered so that they can be performed in different locations.13 Transnational companies have built integrated value chains to tap into national skill poolsaroundtheworld.14Outsourcingisoc-curring in services as well as in manufacturing. The share of developing countries in exports of world services nearly doubled to 21 percent be-tween 1990 and 2008.15Technology is changing the way workers and rmsconnect,throughtheiraccesstomuch larger,evenglobal,employmentmarketplaces. Some of the new marketplaces operate through theinternet;othersusemobilephonetechnol-ogy.16Part-timeandtemporarywageemploy-mentarenowmajorfeaturesofindustrialand developingcountries.InSouthAfrica,tempo-rary agency workers make up about 7 percent of the labor force; the temporary stafng industry provides employment to an average of 410,000 workersaday. InIndia,thenumberoftempo-raryworkersthatemploymentagenciesrecruit grew more than 10 percent in 2009 and 18 per-cent in 2010.17Thischanginglandscapeofglobalproduc-tionhasalsobroughtaboutshiftsinskillen-dowments and in the world distribution of top talent.ChinaandIndiarankhighinperceived attractivenessasoutsourcinghubsbecauseof theirexceptionallyhighratingsintheavail-abilityofskills.18Indiahascloseto20million students in higher education, nearly as many as theUnitedStates;bothcountriesareoutpaced byChina,with30millionpostsecondarystu-dents.19TheUnitedStatesstillaccountsfora large share of top scores in international student assessments,buttheRepublicofKoreahasthe same share as Germany, and both are closely fol-lowedbytheRussianFederation.Thenumber of high-performing students in Shanghai alone isone-fththatofGermanyandabouttwice that of Argentina.20The role of the private sectorIn such rapidly changing times, the private sec-toristhemainengineofjobcreationandthe source of almost 9 of every 10 jobs in the world. 8WORLDDEVELOPMENTREPORT2013Demography,urbanization,globalization, technology,andmacroeconomiccrisesbring aboutformidablejobschallenges.Countries thatfailtoaddressthemmayfallintovicious circlesofslowgrowthinlaborearningsand job-relateddissatisfactionaffectingasizable portion of the labor force.30 Youth unemploy-mentandidlenessmaybehigh,andwomen may have fewer job opportunities, leaving po-tentialeconomicandsocialgainsuntapped.31 Arepeatingpatternofsmallgainsinliving standards, slow productivity growth, and erod-ingsocialcohesioncansetin.Incontrast, countries that address these jobs challenges can developvirtuouscircles.Theresultspros-perouspopulations,agrowingmiddleclass, increasedproductivity,andimprovedoppor-tunitiesforwomenandyouthmaythenbe self-reinforcing.Development happens through jobsJobs are more than just the earnings and benets they provide. They are also the output they gen-erate, and part of who we are and how we interact with others in society. Through these outcomes, Policy responses to prevent and mitigate the im-pact of crises involve different combinations of instruments,withpotentiallydiverseimplica-tions for jobs.29FI GURE4 Jobs are transformational Source: World Development Report 2013 team.DEVELOPMENTJOBSLIVINGSTANDARDSPRODUCTIVITYSOCIALCOHESIONFI GURE3 In China, employment growth is led by the private sectorSource: Kanamori and Zhao 2004.Note: Data for foreign-owned companies in 2002 and for non-state-owned enterprises in 2003 are not available.1101009080706050403020100number of workers, millions198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003state-owned enterprisesindividual frms (fewer than 8 workers)private frms (8 workers or more)foreign-owned companiesMoving jobs center stage9notrefertoidenticalworkers.Butgrowthalso improves the living standards of workers whose skills have not changed. Morethantwodecadesofresearchonpov-ertydynamics,spanningcountriesasdifferent as Canada, Ecuador, Germany, and South Africa, show that labor-related events trigger exits from poverty.33 These events range from the head of ahouseholdchangingjobstofamilymembers startingtoworkandtoworkingfamilymem-bers earning more. Conversely, a lack of job op-portunitiesreducestheabilityofhouseholds toimprovetheirwell-being.34Inalargesetof qualitative studies in low-income countries, get-ting jobs and starting businesses were two of the main reasons for people to rise out of poverty.35Quantitativeanalysisconrmsthatchanges inlaborearningsarethelargestcontributorto povertyreduction(gure6).In10of18Latin Americancountries,changesinlaborincome explain more than half the reduction in poverty, and in another 5 countries, more than a third. In Bangladesh, Peru, and Thailand, changes in edu-cation, work experience, and region of residence mattered, but the returns to these characteristics (includinglaborearnings)matteredmost.Just havingworkwasnotenough,giventhatmost people work in less developed economies. What madeadifferenceforescapingpovertywasin-creasing the earnings from work.36jobs can boost living standards, raise productiv-ity, and foster social cohesion (gure 4). Jobs are what we earn Jobsarethemostimportantdeterminantof livingstandards.Formostpeople,workisthe main source of income, especially in the poorest countries. Many families escape or fall into pov-ertybecausefamilymembersgetorloseajob. Opportunitiesforgainfulwork,includingin farming and self-employment, offer households the means to increase consumption and reduce itsvariability.Higheryieldsinagriculture,ac-cesstosmalloff-farmactivities,themigration offamilymemberstocities,andtransitionsto wage employment are milestones on the path to prosperity.32 Andasearningsincrease,individ-ualchoicesexpandhouseholdmemberscan choose to stay out of the labor force or to work fewerhoursanddedicatemoretimetoeduca-tion, to retirement, or to family.Earnings from work increase with economic development,andthebenetsassociatedwith jobsimproveaswell.Therelationshipisnot mechanical, but growth is clearly good for jobs (gure5).Admittedly,aseconomiesbecome moredeveloped,theaverageskillsofjobhold-ersincrease,implyingthatobservationsacross countries are not strictly comparable, as they do FI GURE5 Jobs provide higher earnings and benefits as countries grow Source: World Development Report 2013 team.Note: GDP = gross domestic product; PPP = purchasing power parity. Each dot represents a country.100806040200300 3,000 30,000contributors to social securityprograms, % of total employmentGDP per capita, 2005 PPP US$b.Social security coverage100,00010,0001,0003001003,000 30,000average wage in manufacturing, 2005 PPP US$GDP per capita, 2005 PPP US$a.Average wage10WORLDDEVELOPMENTREPORT2013arecreatedandlessproductivejobsdisappear. Thesegainsmayultimatelybedrivenbynew goods,newmethodsofproductionandtrans-portation, and new markets, but they material-izethroughaconstantrestructuringandreal-location of resources, including labor.38 Net job creationgureshidemuchlargerprocessesof gross job creation and gross job destruction. On averageacrossdevelopingcountries,between 7and20percentofjobsinmanufacturingare createdwithinayear,butasimilarproportion disappear (gure 7).39Because economies grow as high-productivity jobsarecreatedandlow-productivityjobsdis-appear,therelationshipbetweenproductivity gains and job creation is not mechanical. In the medium term, employment trends align closely withtrendsinthesizeofthelaborforce,so growth is truly jobless in very few cases. In the short term, however, innovations can be associ-atedwitheitherincreasesordecreasesinem-Beyondtheirfundamentalandimmediate contributiontoearnings,jobsalsoaffectother dimensions of well-being, including mental and physicalhealth.Nothavingajobundermines lifesatisfaction,especiallyincountrieswhere wageemploymentisthenormandwherethe lackofopportunitiestranslatesintoopenun-employmentratherthanunderemployment. Among those employed, the material, nonmate-rial,andevensubjectivecharacteristicsofjobs canallhaveanimpactonwell-being.37Other featuressuchasworkplacesafety,jobsecurity, learningandadvancementopportunities,and health and social protection benets are valued byworkers.Butrelativelyfewjobsofferthese advantages in developing countries.Jobs are what we doEconomic growth happens as jobs become more productive,butalsoasmoreproductivejobs FI GURE6 Jobs account for much of the decline in extreme povertySources: Azevedo and others 2012; Inchauste and others 2012; both for the World Development Report 2013.Note: Family composition indicates the change in the share of adults (ages 18 and older) within the household. Labor income refers to the change in employment and earnings for each adult. Nonlabor income refers to changes in other sources of income such as transfers, pensions, and imputed housing rents. If a bar is located below the horizontal axis, it means that that source would have increased, instead of decreased, poverty. The changes are computed for Argentina (200010); Bangladesh (200010); Brazil (200109);Chile (200009); Colombia (200210); Costa Rica (200008); Ecuador (200310); El Salvador (2000-09); Ghana (19982005); Honduras (19992009); Mexico (200010); Moldova (200110); Panama (200109); Paraguay (19992010); Peru (200210); Nepal (19962003); Romania (200109); and Thailand (200009). The changes for Bangladesh, Ghana, Moldova, Nepal, Peru, Romania, and Thailand are computed using consumption-based measures of poverty, while the changes for the other countries are based on income measures.percentage of total change in extreme poverty20015010050050100RomaniaMoldovaThailandGhanaNepalPeruBangladeshEl SalvadorMexicoChileCosta RicaArgentinaEcuadorParaguayBrazilColombiaHondurasPanamafamily composition labor income nonlabor income consumption-to-income ratioMoving jobs center stage11ployment.40 The popular perception is that pro-ductivitygrowsthroughdownsizing,butsome rms are able to achieve both productivity and employmentgains.41InChile,Ethiopia,and Romania,successfulupsizerscontributedto outputandemploymentgrowthsubstantively; sometimestheyaremorenumerousthanthe successful down sizers.42 And the combination ofprivatesectorvibrancyandstatesectorre-structuringledtorapidoutputandemploy-mentgrowthintransitioneconomiesandin China in the late 1990s and the early 2000s.43 Successfulupsizerstendtobeyounger, leaner, and more innovative.44 But overall, large rms are both more innovative and more pro-ductive.Theyinvestmoreinmachinery.They aremuchmorelikelythansmallrmstode-velop new product lines, to introduce new tech-nology, to open and close plants, to outsource, andtoengageinjointventureswithforeign partners.45Thesermsproducemorewitha given amount of labor, and export more as well. Theyalsopaysubstantivelyhigherwagesthan micro-andsmallenterprises(gure8).Inde-veloping countries, however, many people work in very small and not necessarily very dynamic economic units.Family farms dominate in agriculture. At 1.8 and 1.2 hectares, respectively, average farm size issmallinSub-SaharanAfrica,andespecially in Asia.46 The Green Revolution has led to both highercerealyieldsandmorejobcreationbe-causethenewtechnologiesarelaborintensive. Butprogresshasbeenunevenacrossregions and has not taken place on a large scale in Sub- SaharanAfrica.Moremechanizedfarmshave higherproductivity,butconstraintsinland markets usually slow mechanization; without it, yields per hectare tend to be higher on smaller farms.Outsideagriculturetherearemassive numbersofmicroenterprisesandhousehold businesses(gure9).Thesesmallunitsplay signicantrolesinjobcreation,eveninhigh- middle-incomecountries.Theyaccountfor97 percentofemploymentinthemanufacturing sectorinEthiopia,butstillforasizable39per-centinChile.Intheservicessector,theirroleis often more important. Even in Eastern European countries,wheretheprivatesectorisonlytwo decades old, microenterprises are the source of 10 to 20 percent of employment in manufactur-FI GURE7 Simultaneous job creation and destruction characterize all economies Sources: World Development Report 2013 team estimates based on Bartelsman, Haltiwanger, andScarpetta 2009b and Shiferaw and Bedi 2010.Note: The gure shows annual job ows. Data are from Argentina (19962001); Brazil (19972000);Canada (198497); Chile (198098); Colombia (198397); Estonia (19962000); Ethiopia (19972007);Finland (198997); France (198997); Germany (197799); Hungary (19932000); Indonesia (199194); Italy (198794); Latvia (198398); Mexico (19862000); the Netherlands (199395);Portugal (198398); Romania (19932000); Slovenia (19912000); Taiwan, China (198691); the United Kingdom (198298); the United States (198691, 199496); and Repblica Bolivariana de Venezuela (199698).industrial economies(average)industrial economies(average)share of total employment, %net jobcreationgross jobcreationgross jobdestruction5 0 5 10 15 20Venezuela, RBColombiaTaiwan, ChinaChileBrazilIndonesiaEthiopiaRomaniaSloveniaHungaryEstoniaArgentinaMexicoLatviaECONOMY-WIDEMANUFACTURING SECTOR ONLY12WORLDDEVELOPMENTREPORT2013enterprises,thegazelles,investandearnhigher returns.50While large rms are more productive, they were not all born large. In industrial countries, someofthemoreresoundingsuccesses,from HondatoMicrosoft,startedingarages.Many successfulcompaniesindevelopingcountries alsogrewoutofsmallhouseholdbusinesses. Thailands Charoen Pokphand Group, founded in 1921 as a small seed shop in Bangkok by two brothers, has grown into one of the largest multi-national conglomerates in agribusiness, operat-ingin15countriesandencompassingcloseto 100 companies. Indias Tata Group transformed fromaMumbai-basedfamily-ownedtrading rm in the late 19th century to a multinational conglomerate,comprising114companiesand subsidiariesacrosseightbusinesssectorson severalcontinents.ManyofChinassuccess-fulclusters,suchasthefootwearindustryin Wenzhou,alsostartedfromsmallfamilybusi-nesses working close to each other.51Unfortunately,inmanydevelopingcoun-tries, larger and older rms tend to be stagnant while smaller and younger enterprises are prone to churning. A vibrant dynamic process is usu-allyabsent.InGhana,manyrmswereborn large and showed little growth over 15 years; in Portugal, by contrast, many rms born as mi-croenterprises grew substantially.52 The major-ity of rms in India is also born small, but they tendtostaysmall,withoutdisplayingmuch variationinemploymentovertheirlifecycle. Arevealingcomparisoninvolvesthesizeof 35-year old rms relative to their size at birth. In India, the size declines by a fourth; in Mex-ico, it doubles. In the United States, it becomes 10timesbigger.53Thepotentialgainsfrom greaterentrepreneurialvibrancy,andfroma moresubstantialreallocationoflaborfrom low-tohigh-productivityunits,aresizable.54 But helping those gains materialize is a daunt-ing task.Jobs are who we are Having, or not having, a job can shape how peo-ple view themselves and relate to others. While some jobs can be empowering, in extreme cases a lack of job opportunities can contribute to vi-olence or social unrest. Youth may turn to gangs tocompensatefortheabsenceofidentityand belongingthatajobmightprovide.InEcua-FI GURE8 Larger firms pay higher wagesSource: Montenegro and Patrinos 2012 for the World Development Report 2013.Note: The gure uses 138 household and labor force surveys spanning 33 countries over 19912010. The horizontal axis reports the estimated wage premium of small rms (10 to 50 workers) and large rms (more than 50 workers) relative to microenterprises, controlling for worker characteristics.ing and 30 to 50 percent of employment in ser-vices. The large numbers of economic units are associatedwithaverywidedispersionoftotal factorproductivity.InIndia,evenwithinnar-rowlydenedsectors,amanufacturingplant at the 10th percentile of the distribution gener-ates 22 times less output than a plant in the 90th percentile would produce with the same inputs. ThispatternissimilarinanumberofLatin American countries. By comparison, the ratio is 1 to 9 in the United States.47Whilemicroenterpriseshavelacklusterper-formance as a group, they are also very diverse. Microenterprises and household businesses are a means of survival for the poor and a way of di-versifyingoutoffarmingactivities.On average, their owners do not earn much.48 But in middle-incomecountries,manyamongtheownersof micro- and small enterprises are as entrepreneur-ialastheirpeersinindustrialcountries.Their weakperformancemaybeduetoanadverse investmentenvironmentforexample,limited access to credit.49 Yet a small number of micro-wage premium, relative to microenterprises (%)small large64200 20 50 80 120estimates, %Moving jobs center stage13whosefathersdidnothaveformalsectorjobs weresignicantlylesslikelytohavesuchjobs themselves.58The distribution of jobs within societyand perceptionsaboutwhohasaccesstoopportu-nities and whycan shape expectations for the futureandperceptionsoffairness.Childrens aspirations may be inuenced by whether their parentshavejobsandthetypesofjobsthey have.TheArabSpringwasnotmerelyabout employment.Butdisappointment,especially among youth, about the lack of job opportuni-tiesandfrustrationwiththeallocationofjobs based on connections rather than merit echoed across countries.dor, for instance, they did so because they were searching for the support, trust, and cohesionsocial capitalthat they maintained their fami-lies did not provide, as well as because of the lack of opportunities in the local context.55Theworkplacecanbeaplacetoencounter new ideas and interact with people of different gendersorethnicities.Bosniansinterviewed inthelate1990scommentedthat theareain which there is the greatest support for ethnic co-operation is in the workplace.56 Business people inTrinidadandTobagoreportedthattheyin-teracted with people of a wider range of ethnic-ities at work than they did in their social lives.57 Networks can also exclude. In Morocco, people FI GURE9 The employment share of microenterprises is greater in developing countriesSources: World Development Report 2013 team estimates and EUROSTAT.Note:Microenterprises are rms, formal or informal, with fewer than 10 workers. Data for developing countries are from Argentina(200610), Bolivia (2005, 2007), Chile (2006, 2009), Colombia (2009), the Czech Republic (200507), the Arab Republic of Egypt (2006), Ethiopia (1999), Ghana (1991), Hungary (200708), India (2004, 2009), Mexico (200410), Poland (200507), Romania (200507), Slovenia (200507), South Africa (200507), Turkey (200610), Uruguay (2009), Repblica Bolivariana de Venezuela (200406), and Vietnam (2009). Data for industrial countries are from Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, and the United Kingdom over 200507.EthiopiaEgypt, Arab Rep.ColombiaGhanaMexicoVenezuela, RBArgentinaPolandTurkeyHungarySouth AfricaCzech RepublicSloveniaChileRomaniaVietnamindustrial countries (average)UruguayIndiaBoliviashare of employment, %manufacturing sector services sector100 0 80 60 40 2014WORLDDEVELOPMENTREPORT2013The nature of jobs matters as well. Jobs that empower,buildagency,andrespectrightsare associatedwithgreatertrustandwillingnessto participateincivilsociety.Jobsthatcreateeco-nomicandsocialtiesmaybuildincentivesto workacrossboundariesandresolveconict. And if people believe that job opportunities are availabletothemeithernoworinthefuture, their trust in others and their condence in in-stitutions may increase. Ultimately, jobs can in-uence social cohesion through their effects on social identity, networks, and fairness.Valuing jobsNot all forms of work are acceptable. Activities that exploit workers, expose them to dangerous environments,orthreatentheirphysicaland mentalwell-beingarebadforindividualsand societies alike. Child prostitution and forced la-bor contravene principles of human dignity and undermine individual and collective well-being. Today,anestimated21millionpeopleglobally are victims of bonded labor, slavery, forced pros-titution, and other forms of involuntary work.61 Jobsinuencehowpeopleviewthemselves, howtheyinteractwithothers,andhowthey perceivetheirstakeinsociety.59Jobsalsocan havecollectiveconsequences.Theycanshape how societies handle collective decision making, managetensionsbetweendiversegroups,and avoidandresolveconicts.Therelationshipis not immediate or direct, however. Jobs are only one factor contributing to the capacity of socie-ties to manage collective decision making peace-fully. And social cohesion can in turn inuence jobsbyshapingthecontextinwhichentrepre-neurs make business decisions. Trust beyond ones own group and civic en-gagement are two indicators of social cohesion. Unemployment and job loss are associated with lower levels of both trust and civic engagement (gure10).Whilecausalityisdifculttoes-tablish,thereismorethanjustacorrelationat stake.Indonesianmenandwomenwhowere working in 2000 but not in 2007 were less likely to be participating in community activities than those still at work. And those who were working in 2007 but not in 2000 were signicantly more likelytobeinvolvedinthecommunitythan those who were still out of work.60FI GURE10People who are unemployed, or do not have motivating jobs, participate less in societySource: Wietzke and McLeod 2012 for the World Development Report 2013.Note: The vertical axis shows the probability of the respondent being an active member of one or more of nine types of associations, controlling for the income, education,and demographic characteristics of respondents. In panel a, the probability is linked to being unemployed, and panel b to having a job characterized as cognitive, creative, or independent. The vertical lines indicate the 95 percent condence interval of the estimated probability.marginal probability0.1a.Active membership and unemployment00.10.20.30.40.50.6highincomeupper middleincomelowermiddleincomelowincomeNNNNhighincomeupper middleincomelowermiddleincomelowincomemarginal probabilityb.Active membership and motivating job0.020.0100.010.02NNNNMoving jobs center stage15householdincomecontributedbywomenof-tenresultsinimprovementsinchildrensedu-cational attainment and health. In Bangladesh, wherethegarmentindustryemployswomen inlargenumbers,theopeningofagarment factorywithincommutingdistanceofavil-lage is seen as a signal of opportunity and leads toincreasedschoolingforgirls.64Amongdis-advantagedcastesinSouthernIndianvillages, anincreaseofUS$90inawomansannualin-come is estimated to increase schooling among her children by 1.6 years.65Similarly, a job created or sustained through foreigndirectinvestment(FDI)mattersfor other jobs, and thus for other people. With the investmentcomeknowledgeandknow-how. These raise productivity not only in the foreign subsidiary but also among local rms interact-ing with the subsidiary or operating in its vicin-ity. Such knowledge spillovers are sizable in low- andmiddle-incomecountries.66Conversely,a job in a protected industry that needs to be sup-portedthroughtransfers(eitherbytaxpayers or by consumers) generates a negative spillover, evenmoresowhentheneedforprotectionis associated with the use of outdated technology that results in high environmental costs.Jobscanalsoaffectotherpeoplebyshaping social values and norms, inuencing how groups coexistandmanagetensions.InBosniaand Herzegovina and the former Yugoslav Republic of Macedonia, surveys found that the number of peoplewillingtoworktogetherordobusiness with someone of a different ethnicity was greater than the number of people in favor of intereth-nic cooperation in schools or neighborhoods.67 And in the Dominican Republic, a program tar-geted to youth at risk shows that jobs can change behaviors with positive implications for society. ParticipationintheProgramaJuventudyEm-pleo (Youth and Employment Program), which providesacombinationofvocationalandlife skillstraining,reducedinvolvementingangs, violence, and other risky behaviors.68 Forthesamelevelofearningsandbenets, the larger the positive spillovers from a job, the moretransformationalthejobcanbe,andthe greater its value to society. In everyday parlance, goodjobsarethosethatprovidegreaterwell-beingtothepeoplewhoholdthem.Butgood jobs for development are those with the highest valueforsociety.Understandingthesewider In 2008, 115 million children between the ages of 5 and 17 were involved in hazardous work.62 International norms of human rights and labor standards reject forced labor, harmful forms of child labor, discrimination, and the suppression of voice among workers.Beyondrights,themostobviousoutcome of a job is the earnings it provides to its holder. Theseearningscanbeincashorinkindand mayincludearangeofassociatedbenets. Othercharacteristics,suchasstability,voice, andfulllmentatwork,alsoaffectsubjective well-being. Several of these dimensions of jobs havebeencombinedintotheconceptofDe-cent Work, introduced by the International La-bour Organization (ILO) in 1999.63 Dened as opportunitiesforwomenandmentoobtain decentandproductiveworkinconditionsof freedom,equity,securityandhumandignity, thisconcepthasbeenusedbymanygovern-mentstoarticulatetheirpolicyagendason jobs. The concept of Decent Work has also been embracedbytheUnitedNationsandseveral internationalorganizationsandendorsedby numerous global forums. Asjobsprovideearnings,generateoutput, andinuenceidentity,theyshapethewell-beingofthosewhoholdthemandtheyalso affectthewell-beingofothers.Tounderstand how much jobs contribute to development, it is necessarytoassesstheseeffectsthespillovers from jobs. Jobs that generate positive spillovers haveagreatervaluetosocietythantheyhave totheindividualwhoholdsthejob,whilethe opposite is true when spillovers are negative. In-tuitively, many people have notions about such broaderpayoffs.Whenaskedabouttheirmost preferred jobs, respondents in China, Colombia, Egypt,andSierraLeonegivedifferentanswers fromthosetheyofferwhenaskedtoidentify themostimportantjobstosociety(gure11). Working as a civil servant or as a shop owner is generallypreferredbyindividuals,whileteach-ers and doctors are quite often mentioned as the most important jobs for society. Whogetsajobmakesadifferencetoo,and not just for individuals. In a society that values povertyreduction,jobsthattakehouseholds outofhardshipgenerateapositivespillover, becausetheyimprovethewell-beingofthose who care. Female employment also matters be-yond the individual. An increase in the share of 16WORLDDEVELOPMENTREPORT2013tribute to common goals, such as poverty reduc-tion, environmental protection, or fairness. Becauseajobcanaffectthewell-beingof others as well as that of the jobholder, two jobs thatmayappearidenticalfromanindividual perspective could be different from a social per-spective (gure 13). The individual perspective provides a useful starting point, because it often coincideswiththesocialperspective.Ahigh-paying job in Bangalores information technol-ogy sector is probably good for the worker; it is also good for India because it contributes to the countrys long-term growth. In other cases, the pay offstojobshasshapedrecentdevelopment thinking.69Spillovers from jobs can be identied across allthreetransformations(gure12).Somedi-rectly affect the earnings of others, as when a job issupportedthroughgovernmenttransfers,or restrictiveregulationsthatreduceemployment opportunitiesforothers.Otherspilloverstake place through interactions: in households in the caseofgenderequality,attheworkplacewhen knowledgeandideasareshared,orinsociety more broadly in the case of networks. Spillovers alsooccurwhenjobsandtheirallocationcon-FI GURE11Views on preferred jobs and most important jobs differSources: Bjrkhaug and others 2012; Hatly and others 2012; Kebede and others 2012; and Zhang and others 2012; all for the World Development Report 2013.Note: The gure shows the share of respondents who would want the job for themselves (individual value) and those who think the job is good for society (social value).a.China b.Egypt, Arab Rep.c.Colombia d.Sierra Leoneindividual value individual valueindividual value individual valuesocial valuesocial valuesocial valuesocial valueDTFCSTFCSDTCSDTSDFCDF0 10 20 30 40 0 10 20 30 40 500 10 20 30 40 0 10 20 30 40 50 505001020304050010203040500102030405001020304050CcivilservantDdoctorFfarmerSshopownerTteacherMoving jobs center stage17thebiggestpayoffmaybeforjobsthatreduce povertyordefuseconict.Certainly,thelevel of development matters. The jobs agenda is not the same in an agrarian economy as in one that is rapidly urbanizing. It is bound to be different still in countries already grappling with how far the formal economy can be extended. two perspectives may conict. For instance, Viet-nams poverty rate declined with unprecedented speed in the 1990s when land was redistributed tofarmersandagriculturalcommercialization wasliberalized.70Fromtheindividualperspec-tive, farming jobs involve difcult working con-ditions,substantialvariabilityinearnings,and no formal social protection. But they can make a major contribution to development, as a ticket outofpovertyformany.Conversely,bloated public utilities often offer a range of privileges to theiremployeeseveniftheutilitiesthemselves provideonlylimitedcoverageandunreliable servicesandareobstaclestoeconomicgrowth and poverty reduction. Such jobs may look ap-pealing from an individual perspective, but are less so to society.Jobs agendas are diverse . . .but connectedJobschallengesarenotthesameeverywhere. Creating more jobs may be a universal goal, but thetypesofjobsthatcancontributethemost to development depend on the country context. Jobs that connect the economy to the world may matterthemostinsomesituations;inothers, FI GURE13 The individual and social values of jobs can differSource: World Development Report 2013 team.job in a protectedsector using outdatedtechnologyindividualvalueenvironmentalcost burdenshiftedinformal jobgiving a chance toa poor personpovertyreduction agglomerationeffectsglobalintegrationgender equality urban job connectedto a global value chainfor a womansocialidentityspilloverindividualvaluesocial valuesenseof fairness job offering an opportunity to ayoung personFI GURE12Some jobs do more for developmentSource: World Development Report 2013 team.Jobs that do notshift burdento othersJobs thatempowerwomenJobs forthe poorJobsconnected toglobal marketsJobs that givea senseof fairnessJobs thatlink tonetworksJobs that shape socialidentityDEVELOPMENTJOBSLIVINGSTANDARDSPRODUCTIVITYSOCIALCOHESIONJobs that areenvironmentallybenignJobs infunctionalcities18WORLDDEVELOPMENTREPORT2013jobs that do no environmental damage have particularly positive development impacts. Formalizingcountries.Largeandgrowingur-banpopulationsgenerallyleadtomorede-velopedeconomies,whereafairlysubstantial proportionofrmsandworkersarecovered byformalinstitutionsandsocialprograms. But further increasing formality to levels typi-calofindustrialcountriesinvolvestradeoffs betweenlivingstandards,productivity,and socialcohesion.Thereisapremiumonjobs that can be formalized without making labor toocostlyandonjobsthatreducethedivide between those who benet from formal insti-tutions and those who do not. Insomecountries,thejobschallengeis shapedbydemographyandspecialcircum-stances affecting particular groups. Incountrieswithhighyouthunemployment youngpeopledonotseeopportunitiesfor the future. Many of these countries have large youth bulges, which can put downward pres-sure on employment and earnings. Many also have education and training systems that are notdevelopingthekindsofskillsneededby theprivatesector.Oncloserinspection,the problemisoftenmoreonthedemandside thanthesupplyside,withlimitedcompe-titionreducingemploymentopportunities, especiallyinmoreskill-intensivesectors.In these settings, removing privilege in business entry and access to jobs is likely to have large development payoffs. Agingsocietiesalsofacegenerationalissues, but these stem from a shrinking working-age populationandthehighcostofproviding andcaringforagrowingnumberofelderly people. The impact of the declining working-age population can be mitigated through pol-iciesforactiveaging,ensuringthatthemost productivemembersofsociety,including the highly skilled elderly, can work. Contain-ingtheincreaseinpension,healthcare,and long-term care costs can be achieved through reforms in program design, but these reforms can be a source of social strain. Naturalendowments,includinggeography, and institutions can create unique jobs challenges.But the nature of good jobs for development in a particular context is not simply a function ofincomepercapita.Itmaybeinuencedby conictthatisongoingorstillreverberating. Acountrysgeographyoritsnaturalendow-ments can also be determining factors. Small is-land nations have unique jobs challenges, as do resource-rich economies. Or demography may be the key characteristicwitness the imposing but very different challenges in countries facing high youth unemployment and those with ag-ing populations.A typology of jobs challengesA countrys level of development, institutional strength,endowments,anddemographyde-newherethedevelopmentpayofffromjobs is greatest. The jobs agenda in one country will thus be different from that in another country, dependingontheirdominantfeatures.The challenges facing countries as they move along thedevelopmentpathareillustratedbythe agrarian, urbanizing, and formalizing cases: Agrariancountries.Mostpeoplearestillen-gagedinagricultureandliveinruralareas. Jobsthatimprovelivingstandardshavea substantialdevelopmentpayoffbecauseof highpovertyrates.Citiesneedtobemore functional to reap the benets from agglom-erationandglobalintegration,sojobsthat set the foundation for cities to eventually be-comeeconomicallydynamicaregoodjobs for development. Even in the most optimistic scenario, however, it may take decades before urbanizationiscomplete,soincreasingpro-ductivity in agriculture is a priority. Urbanizing countries. Productivity growth in agriculture has risen enough to free up large numbersofpeopletoworkincities.Job opportunitiesforwomen,typicallyinlight manufacturing,canhavepositiveimpacts onthehouseholdallocationofresources. Jobsthatdeepentheglobalintegrationof urbanizingcountries,especiallyinhigher-value-addedexportsectors,arealsogood fordevelopment.Ascountriesurbanize, congestion,pollution,andothercostsof high density become increasingly serious, so Moving jobs center stage19thatwouldmakethegreatestcontributionto developmentineachcase.Thisfocusallows foraricheranalysisofthepotentialtradeoffs betweenlivingstandards,productivity,and socialcohesioninaspeciccontext.Itpro-vides clues about the obstacles to job creation and, ultimately, the priorities for policy makers (gure 14).Migration of peopleand of jobsThe movement of people and jobs implies that jobschallenges,whilebeingco