While employment creation in developing countries is high on the agenda of most donor agencies, there are different views on how to achieve it. This page brings together key publications offering insights into major obstacles and potential solutions to job creation.
At a glance: Short reads on employment creation
- Synthesis Note: Employment Creation, DCED, 2017. This note summarises key research and debates on the most effective approaches for creating employment. Key take-aways include:
- Labour-intensive light manufacturing industries, supported by a conducive investment climate, can deliver productive jobs for low-skilled workers at scale.
- 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. Development agencies focused on job creation through SMEs should therefore target small firms that grow.
- Creating wage jobs in the manufacturing and service sectors has great potential in the medium term, but increasing productivity and incomes of the many people in traditional agriculture also needs to be remain a priority in the short-term.
DCED publications on employment creation
- Working Paper: Measuring Job Creation in Private Sector Development, by MarketShare Associates for the DCED, 2014:This paper is to complement offers practical advice and examples on how to measure job creation and job quality. It is written for private sector development programmes and is particularly relevant for those working towards the DCED Standard for results measurement.
Key overview documents
- World Employment and Social Outlook.Trends 2017, ILO. The ILO’s flagship report takes stock of the current global labour market situation, assesses the most recent employment developments and forecasts unemployment levels. It also focuses on trends in job quality, paying particular attention to working poverty and vulnerable employment.
- Increasing Employment Opportunities: Navigating Africa’s complex job market. Brookings Institution, 2017. This report aims to identify and implement policies which can capatilise on Africa’s “demographic dividend.” It analyses demand- and supply-side challenges to job creation.
- Promoting Productive Employment in Sub-Saharan Africa. A Review of the Literature, UNU-MERIT, 2013. In sub-Saharan Africa, the primary employment problem is not unemployment but underemployment. As such, this paper focuses on productive and sustainable employment, rather than just the employment rate.
- 2013 World Development Report on Jobs, The World Bank, 2013. In 2013, the World Bank’s flagship World Development Report focused on jobs. It identified the role of strong private sector led growth in creating jobs and outlined how jobs that do the most for development can spur a virtuous cycle.
- IFC Jobs Study. Assessing Private Sector Contributions to Job Creation and Poverty Reduction, IFC, 2013. It is crucial to understand the constraints that private companies face in creating jobs. This report aims to help by providing an understanding of how the private sector generates jobs, what constraints limit job creation, and how these problems can be mitigated.
The relationships between growth, employment and poverty reduction
- Working for economic transformation, ODI/ECDPM, 2015.
- What do empirical studies say about economic growth and job creation in developing countries?, EPS PEAKS, 2013.
- Jobs, growth and poverty: What do we know, what don’t we know, what should we know?, ODI, 2011.
Employment and poverty reduction
- Wage labor, agriculture-based economies and pathways out of poverty. Taking stock of the evidence, USAID, 2015.
- Creating jobs that reduce poverty: A Research Agenda on Developing-Country Gazelles, RTI, 2012.
- Does employment really matter for poverty reduction?, The World Bank, 2007.
Country Assessments and sectoral employment studies
- 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, The World Bank Group, 2015.
- Which firms create the most jobs in developing countries? Evidence from Tunisia, The World Bank, 2014.
- Rural Wages in Asia, ODI, 2014.
- Structural change in Ethiopia: An employment perspective, The World Bank, 2014.
Constraints and solutions to employment in developing countries
The Impact of the Business Environment
- Investment Climate Reforms and Job Creation in Developing Countries; What Do We Know and What Should We Do? The World Bank, September 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, The World Bank, 2013.
- The effect of business registration reform on entrepreneurial activity in Mexico, The World Bank, 2008.
The role of structural transformation and industrial development
- Industrial 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, February 2016.
- Aid, Employment and Poverty Reduction in Africa, UNU WIDER, 2014.
- Structural transformation and employment creation: the role of growth facilitation policies in Sub-Sahara Africa, ODI, 2012.
- Light Manufacturing in Africa. Targeted policies to enhance private investment and create jobs, Dinh et al., 2012.
The Potential of Skills and Innovation
- The impact of SENAI’s vocational training programme on employment, wages, and mobility in Brazil, IRIBA, 2014.
- Innovation and productivity change in low-income countries. A brief overview of policy and academic debates, ODI, 2013.
- Skills Development Pathways in Asia, OECD/ LEED, 2013.
- Innovation, Employment and Skills in Advanced and Developing Countries. A Survey of the Literature, IZA, 2012.
Small and large enterprises in job creation
- Is Small Beautiful? Small Enterprise, Aid and Employment in Africa. African Development Review, 2015.
- Small and medium-sized enterprises and decent and productive employment creation, ILO, 2015.
- Firm Dynamics, Productivity Growth and Job Creation in Developing Countries: The role of Micro and Small Enterprises, The World Bank, 2013.
- Constrained Gazelles. High Potentials in West Africa’s Informal Economy, ISS, 2012.
Job quality: promoting ‘decent work’ and productive employment
- 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, Chris Blattman and Stefan Dercon, 2016. A summary is available here.
- SDC e&i network resources on social aspects of work.
- The Business Case for Quality Jobs – Evidence from Better Work, ILO and IFC, 2014.
- Informal Workers in Global Horticulture and Commodities Value Chains. Literature review, WIEGO, 2013.
- The quality of employment and decent work: definitions, methodologies and ongoing debates, Cambridge Journal of Economics, 2013.
Interventions to support employment creation
Overviews and systematic reviews
- A Literature Review of Labour Market Impacts of Value Chain Interventions, LEI Wageningen UR, 2014.
- Interventions for employment creation in micro, small and medium sized enterprises. A systematic review, for KfW, 2014. A summary of the systematic review can be found in OECD DAC Evaluation Insights (May 2014): Creating Jobs in Small Businesses.
- Constrained Gazelles: High Potentials in West Africa’s Informal Economy, World Development vol. 40/7, 2012.
Practical tools for employment interventions
- 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, MarketShare Associates for DCED, 2014.