This page compiles key resources on employment creation through PSD programming, including youth employment. While employment creation in developing countries is high on the agenda of most donor agencies, there are different views on how to achieve it. Key insights include:
- In the medium term, labour-intensive light manufacturing industries, supported by a conducive investment climate, can deliver productive jobs for low-skilled workers at scale. This potential may change in the age of automation, with more opportunities emerging in service sectors.
- SMEs contribute a large share of employment in developing countries; however, as many fail, their net job creation rate is likely similar to large firms. Job creation efforts should target SMEs that grow.
- Increasing productivity and incomes of the many people in traditional agriculture also needs to remain a short-term priority.
Young people globally are almost three times more likely to be unemployed as are adults. They are also particularly vulnerable to insecure and poorly paid jobs. As such, they are often a key target group of employment-focused interventions. Emerging evidence on effective support options include:
- Entrepreneurship support and skills training tend to be more effective than other interventions, leading to notable benefits in some countries.
- Wage subsidies and job services have so far been largely ineffective.
- Digital technologies have great potential in delivering training and financial services to youth, as well as offering new job opportunities.
DCED publication
External publication
A Synthesis Note that summarises key research and debates on the most effective approaches for creating employment.
A Synthesis Note that summarises key research on how different private sector development approaches can assist young people.
Global trends and evidence
- World employment and social outlook, ILO, 2025
- The future of jobs report, WEF, 2025
- Youth and Employment Policies in Africa: Challenges, aspirations and opportunities, International Organisation of Employers, 2024
- Global Employment Trends for Youth, ILO, 2024
- World Employment and Social Outlook 2021: The role of digital labour platforms in transforming the world of work, ILO, 2021
- Wage labor, agriculture-based economies and pathways out of poverty. Taking stock of the evidence, USAID, 2015
Country- and sector-specific studies
- Better Jobs in Africa’s Booming Construction Sector, ILO Lab, 2018
- Manufacturing progress? Employment creation in Sri Lanka, ODI/ECDPM, 2015
- Understanding Mozambique’s growth through an employment lens, UNU-WIDER, 2015
- Work in Progress. Productive employment and transformation in Uganda, ODI/ECDPM, 2015
- Unleashing the Employment Potential of the Middle East and North Africa, World Bank Group, 2015
- Structural change in Ethiopia: An employment perspective, World Bank, 2014

Global reviews of ‘what works’
Check out our Evidence Framework page for broader resources on this topic.
- Getting Africa’s youth working: Taking a systems approach to create more & better jobs for young people in sub-Saharan Africa, ILO/MCF 2020
- A stocktake of evidence on what works in youth employment programs, World Bank Group, 2019
- The evidence is in: how should youth employment programs in low income countries be designed? World Bank, 2018
- A systematic review of training, entrepreneurship promotion, employment services and subsidised employment interventions for youth, Campbell Collaboration, 2017
- Youth & transferable skills Evidence Gap Map, 3ie
- Interventions for employment creation in micro, small and medium sized enterprises. A systematic review, for KfW, 2014.
General ‘how to’ guidance and orientations
- Employment: More work to be done (a how-to slide deck), SDC, 2023
- Youth-sensitive value chain analysis and development: Guidelines for practitioners. FAO, 2022
- How job creation fits into the broader development challenge, Carter and Sedlacek, CDC, 2019
- Guide to international labour standards and rights at work concerning young people, ILO, 2017
- Youth employment in fragile countries, ECDPM, 2017
- Case studies on youth employment in fragile situations, UNDP, 2017
Check out our Business Environment Reform knowledge page for broader resources on this topic.
- Investment Climate Reforms and Job Creation in Developing Countries; What Do We Know and What Should We Do?, World Bank, 2014
- Employment, unemployment and underemployment in Africa, UNU-WIDER, 2014
- Stunted growth: Why don’t African firms create more jobs?, World Bank, 2013
- Business environment, economic agglomeration and job creation around the world, World Bank, 2013
- Promoting Economic Transformation through Business Environment Reform, DCED, 2019
- Promoting Economic Transformation through Market Systems Development, DCED, 2019
- Industry Competitiveness and Jobs. An Evaluation of World Bank Group Industry-Specific Support to Promote Industrial Competitiveness and Its Implications for Jobs, IEG, 2016
- Topic Guide: Urbanisation and Economic Development: Private Sector Linkages, EPS PEAKS / ODI, 2016
- Aid, Employment and Poverty Reduction in Africa, UNU WIDER, 2014
Check out our Small Enterprise Development knowledge page for broader resources on this topic.
Check out our Value Chain Development knowledge page for broader resources on this topic.
- Value Chain Development for Decent Work. A systems approach to creating more and better jobs, ILO, 2021
- Global value chains and employment in developing economies, WTO, 2019
- A Literature Review of Labour Market Impacts of Value Chain Interventions, LEI Wageningen UR, 2014
- Private sector development interventions and better-quality job creation for youth in Africa, INCLUDE Knowledge Platform, 2019
- Reducing search barriers for job seekers – brief evidence summary, J-PAL, 2018
- BEAM Webinar: Market systems and job quality, BEAM Exchange, 2017
- Transitions between Informal and Formal Employment: Results from a Worker Survey in Bangladesh, GLMLIC, 2017
- Market systems and job quality: what do we know and what we can do about it?, ILO, 2017
- The Impacts of Industrial and Entrepreneurial Work on Income and Health: Experimental Evidence from Ethiopia, Blattman and Dercon, 2016.
- The Business Case for Quality Jobs – Evidence from Better Work, ILO and IFC, 2014
- The Impact of Youth Training and Employment on Migration Dynamics in the Horn of Africa, Research and Evidence Facility, 2019
- The future of jobs and skills in Africa. Preparing the region for the fourth Industrial Revolution, World Economic Forum, 2017
- Skills Training Programs (Review of Results), J-PAL, 2017
- Jobs Framework. A Methodology Paper, FSD Africa, 2020
- Guide on measuring decent jobs for youth: Monitoring, evaluation and learning in labour market programmes, ILO, 2018
- Monitoring & Evaluation for Jobs Operations: Jobs Monitoring & Evaluation Toolkit (Volume 1), World Bank, 2017
- Measuring Productive Employment: a “how to” note, ILO, 2017
- Measuring Total Employment Effects: a lean data methodology for a portfolio of investments in developing countries, CDC, 2017
- A Systematic Framework for Measuring Employment Impacts of Development Cooperation Interventions, BMZ / GIZ, 2015
- Measuring Job Creation in Private Sector Development, DCED, 2014



Photo credits: © ILO / Mirza A.