«Jobs and Labour Markets in Developing Countries Policy Issues and Priorities Steven Miller 1. Introduction The challenge of providing productive ...»
In most cases, there is not one simple solution, but rather a variety of strategies and interventions which can be combined into an integrated approach.
This paper has highlighted the key policy areas for job creation, namely:
• Macro-economic policies which foster job-rich growth;
• Vocational education and training programmes;
• Support to self-employment and entrepreneurship development;
• Public employment programmes; and
• Employment guarantees.
All of the above areas can work side-by-side as part of an integrated job creation strategy and are not in any way mutually exclusive. Furthermore, although the five above areas cover most of the employment creation policies and programmes being applied in developing countries, there are others which are not discussed in detail such as, for example, wage subsidies and other incentives to hiring, designing regulations to stimulate job creation, foreign trade agreements and private sector support programmes.
What the paper does not do is to flesh out the institutional mechanisms necessary to implement job creation in developing countries and this is certainly an area which requires further work and careful attention. Many development cooperation programmes fail due to a lack of ownership and capacity of the national institutions responsible for their implementation.
Also job creation is closely linked to economic, fiscal and monetary policies, but often there is a lack of coordination between those responsible for economic and fiscal policy and those responsible for implementing political commitments for job creation. With this in mind, the following overall lessons and areas for future work can be drawn from the preceding discussion.
A first and fundamental step is to specifically target employment creation and decent work as policy priorities. This poses practical difficulties from an institutional standpoint since Ministries of Labour or Employment rarely have the means to create jobs. Therefore robust institutional mechanisms with strong political support and technical oversight need to be put in place to pilot a national employment strategy. National employment councils can be a mechanism to coordinate the role of different government ministries such those responsible for finance, economy, budget, youth and the various technical line ministries responsible for public investments in different sectors. Such councils should not be limited to governmental actors but should also include representatives of international, national and local business interests, trade unions and other civil representatives of particular groups, including youth, women and informal economy workers.
PUBLIC WORLD / Jobs and Labour Markets in Developing Countries / Steven Miller 20 Secondly, if employment creation is indeed a priority, then policy makers should be ready to imagine and design what a policy of full employment would actually entail. The strategy should begin with seeking out opportunities to increase employment impacts of existing resources, and subsequently, to cost out what additional resources would be required, thus implying a comparative assessment of the different alternative approaches discussed in this paper. In particular, the costs and benefits of job creation efforts should be analysed since in many cases the social and economic costs of unemployment exceed the costs of the policy measures to create jobs.
Thirdly, these goals and strategies for job creation must find expression in national poverty reduction strategies and MDG acceleration frameworks, and the work of the G20 and bilateral and multilateral partners, and regional groupings such as the African Union.
Fourthly, action plans must consider and evaluate all options, not choosing between but designing optimal combinations of public and private, direct and indirect, interventions. In cases where the private sector is not creating sufficient jobs, measures should be taken to provide incentives to encourage, and particularly with respect to the use of public funds, hold the private sector accountable for job creation. Although job creation will always be the primary responsibility of the private sector, direct public employment programmes should always be an option on the table, to be costed and compared with alternative approaches.
Fifthly, the regulatory environment – not only labour regulation but also rules about infrastructure development, local economy development, and so on -- should be designed with a view to reflecting the employment and decent work priorities in its design and operation.
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