DUSHANBE, October 4, 2012, Asia-Plus  -- In developing countries, jobs are a cornerstone of development, with a pay off far beyond income alone. They are critical for reducing poverty, making cities work, and providing youth with alternatives to violence, says a new World Bank report.

The World Development Report (WDR) 2013: Jobs stresses the role of strong private sector led growth in creating jobs and outlines how jobs that do the most for development can spur a virtuous cycle.  The report finds that poverty falls as people work their way out of hardship and as jobs empower women to invest more in their children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and as less productive ones disappear.  Societies flourish as jobs foster diversity and provide alternatives to conflict.

The report’s authors highlight how jobs with the greatest development payoffs are those that raise incomes, make cities function better, connect the economy to global markets, protect the environment, and give people a stake in their societies.

The global economic crisis and other recent events have raised employment issues to the center of the development dialogue.  The WDR authors, who processed over 800 surveys and censuses to arrive at their findings, estimate that worldwide, more than 3 billion people are working, but nearly half work in farming, small household enterprises, or in casual or seasonal day labor, where safety nets are modest or sometimes non-existent and earnings are often meager.

The report notes that in Emerging Europe and Central Asia the period 2000-2007 was one of rapid income growth, increased productivity, and reduced poverty.  Countries successfully integrated into the global economy, restructured enterprises, improved conditions for doing business, and modernized labor markets and social benefits systems.  But this did not always translate into higher aggregate employment, as economic restructuring meant that jobs were both created and destroyed.  Following the 2008 financial crisis, job destruction accelerated in many countries and the unemployment situation has worsened sharply, particularly among the youth and older workers.  As a result, jobs have become a critical focus of most countries'' policy agenda.

To redress high and persistent unemployment, the region reportedly needs to ignite a virtuous circle between productivity growth and job creation, building on its transformed, more competitive private sector.  For this, jobs policies need to adjust to a shrinking and aging work force, ensure that regulations do not stifle labor market flexibility, and adapt social protection systems to encourage participation in the labor market.

“Reducing joblessness will require changes in the social contract between workers, enterprises and governments.  The policy agenda must focus on removing obstacles to entrepreneurship, helping education and training systems adapt better to fast-changing labor markets, facilitating labor mobility, and making pensions, social benefits, and labor regulations compatible with longer and more productive working lives,” says Philippe Le Houerou, Vice President, Europe and Central Asia.  “The right combination of policies will vary across countries, but the desired result is the same: rapid creation of productive jobs.”

The World Bank Group fosters job growth through its two main channels of support to the developing world -- the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) -- as well as through the IFC and the Multilateral Investment Guarantee Agency.  Assistance comes in the form of policy advice, support for private sector development plus loans and programs to advance urbanization, infrastructure and human development (including social protection).