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.
For more specific resources on labour markets and employment in light of the COVID-19 pandemic, please refer to the DCED knowledge page on Socioeconomic impacts and national responses.
DCED publication 
External publication
A Synthesis Note that summarises key research and debates on the most effective approaches for creating employment.
A guidance note on designing interventions that support more and better jobs.
Global trends and evidence
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.
- Evidence and debates on employment creation, DCED, 2017
- 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.
General ‘how to’ guidance and orientations
- Employment: More work to be done (a how-to slide deck), SDC, 2023
- Getting Employment to work for Self-Reliance: A USAID Framework for Programming, USAID, 2019
- How job creation fits into the broader development challenge, Carter and Sedlacek, CDC, 2019
- Increasing Employment Opportunities: Navigating Africa’s complex job market, Brookings Institution, 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.
- 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
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
- 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.
- SDC e&i network resources on social aspects of work (allow time to load)
- The Business Case for Quality Jobs – Evidence from Better Work, ILO and IFC, 2014
- The Future of Work in Africa Implications for Secondary Education and TVET Systems, The MasterCard Foundation, 2018
- The future of jobs and skills in Africa. Preparing the region for the fourth Industrial Revolution, World Economic Forum, 2017
- The impact of SENAI’s vocational training program on employment, wages, and mobility in Brazil: Lessons for Sub Saharan Africa?, Barria and Klasen, 2016
- Jobs Framework. A Methodology Paper, FSD Africa, 2020
- 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.