Employment

What youth need: A greater focus on job quality

Development Matters policy, SDGs, Youth , , , , , ,

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By Niall O’Higgins, Senior Research Specialist, Youth Employment Programme, International Labour Organisation (ILO)

Learn more about this timely topic on the upcoming
OECD Global Forum on Development
Register today to attend

women-africaFor young people, successful entry into the world of work – that is, successful transition from education to employment – means more than simply finding a job. Successful transition occurs only when young people find decent work. What is actually meant by this has been the subject of much debate for a number of years; but its essence is encapsulated in the ILO’s notion of freely chosen and productive employment.

While it can be hard to define precisely what ‘decent work’ looks like, it is fairly clear what it is not. It is not informal employment. It is not work that provides insufficient income to meet basic needs. It does not involve excessive working time or any form of compulsion. Typically, it does involve some degree of job security, protection from arbitrary dismissal, access to social protection, such as health insurance and pension schemes, and freedom of association.
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What gets measured gets managed: Tapping into local procurement in the mining industry to advance development

Development Matters data, Natural Resources, policy , , , ,

By Luke Balleny, Manager, Role of Mining and Metals in Society, International Council on Mining and Metals

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Zambia – crusher for manufactured sand. Photo: Shutterstock

How do mining companies spend their money? If you didn’t know and listened only to the media, you might think such companies spend the most on taxes and royalties. However, you’d be wrong.

When minerals or metals are monetised, the revenue is shared between four main stakeholders in the following ways:

  1. 50–65% of mining revenue goes to operating and capital expenditure, such as the suppliers who are paid for their inputs.
  2. 15–20% goes to government, which receives its share through royalties and taxes.
  3. 15–20% goes to investors who receive profits, typically a residual after the other payments have been made.
  4. 10–20% goes to employees who are paid their wages.

A World Gold Council (WGC) study shows that out of the total annual spending in 2012 of USD 55 billion by the 15 WGC members studied, some USD 35 billion were payments to other businesses, mostly subcontracting and procurement. Less than USD 10 billion were royalty and tax payments to governments.

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Policy pathways for addressing informality

Development Matters policy , , , ,

By Juan R. de Laiglesia, Senior Economist, OECD Development Centre

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Vendor selling fresh vegetables in Galle, Sri Lanka

The prevailing international discourse on informality has shifted. The conceptual “discovery” of the informal sector by the ILO’s Kenya mission in 1972 noted not only its scale but also that it was “…economically efficient and profit-making…” Today, the view that informality is a drag on productivity growth and progress has gained ground in the international community and is consistent with the recommendation that the informal economy should be formalised.

One contention is that balanced development and policy action that lifts the financial, technological, institutional and human capital constraints to productivity will also enable higher productivity in informal firms and thereby formalisation. A growth-inducing productivity agenda is a necessity, but growth alone is not enough to reduce informality.
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La promesse du « made in Africa » ne sera tenue qu’en misant sur les entrepreneurs locaux

Development Matters Africa, policy , , , , , ,

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Par Victor Harison, commissaire aux affaires économiques de la Commission de l’UA. et Mario Pezzini est directeur du Centre de développement de l’OCDE et conseiller spécial auprès du secrétaire général de l’OCDE chargé du développement.

The topic discussed here builds on the success of the 2017 Africa Forum

Made-in-AfricaLe « made in Africa » fait son grand retour parmi les priorités des décideurs en Afrique. Ainsi de l’Agenda 2063 de l’Union africaine (UA), qui vise à transformer les économies du continent pour créer une croissance partagée, des emplois décents et des opportunités économiques pour tous. Pourtant il faudra bien davantage que des rêves ambitieux d’industrialisation pour que ce label et cet objectif prennent corps.

Les politiques et stratégies industrielles joueront certes un rôle essentiel, mais elles doivent être repensées profondément. D’abord parce que les efforts d’industrialisation après les indépendances n’ont remporté qu’un succès limité, mais aussi parce que les technologies de production ont subi une révolution, qui n’est pas seulement numérique. L’économie mondiale a radicalement changé, et l’Afrique aussi.
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Services, informality and productivity in Africa

Development Matters Africa, policy , , , ,

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By Tabea Lakemann, Research Fellow, GIGA Institute of African Affairs and University of Göttingen, and Jann Lay, Acting Director, GIGA Institute of African Affairs, and Head of GIGA Research Programme Growth and Development

Learn more about this timely topic at the upcoming
17th International Economic Forum on Africa

Services, informality and productivity in AfricaEconomic development and a sustained, broad-based increase in living standards on the African1 continent are critically connected to the capacity of African economies to create decent jobs at a rate that keeps up with the rapid growth of the workforce. This, in turn, depends on the ability of African governments to develop innovative, tailor-made strategies towards private sector development taking full advantage of countries’ comparative advantages. Private sector development strategies require governments to recognise the significance of informality and to look beyond industrialisation — to the service sector — for private sector growth and job creation.

The potential of informal firms

On average, the informal economy is estimated to make up almost 40% of GPD in Africa.2 Informal firms are typically much smaller than formal ones, but even when controlling for size, they are on average less productive, less likely to access external finance and have less educated managers.3 At the same time, heterogeneity between informal firms is considerable. Some firms exhibit very high marginal returns to capital, and between 28% and 58% of informal entrepreneurs in West Africa are identified as “constrained gazelles” with low capital stocks, but some unrealised growth potential.4 Many informal firms thus have the likely potential to provide an improved livelihood to their self-employed owners and family members engaged in the business.
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Excessive informal sector: a drag on productivity

Development Matters policy , , ,

By Aleksander Surdej, Poland’s Ambassador to the OECD

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Photos by Victor Jiang / Shutterstock

The informal economy remains a problem when we discuss the prospects of economic development. It is perceived as a hindrance to economic progress because the informal sector does not pay taxes, does not include its employees in social insurance schemes and does little to offer labour law protections. Increasingly, various researchers (La Porta1, Shleifer2, 2014) and international organisations, like the OECD, converge in seeing the informal economy as an obstacle to economic development due to its imminent low productivity. Indeed, informal businesses are concentrated in low productivity sectors. They are, on average, smaller and hence less productive. They generate lower value added. They pay lower wages to their employees and do not train them. And the owners of informal businesses manage their firms less efficiently than their better educated formal sector counterparts.

The informal sector is hence both a symptom of economic backwardness and a drag on economic development. But, can this apparent vicious circle be broken, or is it an economic policy donquichottean task?

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Infrastructure, jobs, good governance: Bringing Africans’ priorities to the G20 table

Development Matters Africa, SDGs , , , , , , ,

By Michael Bratton, University Distinguished Professor of Political Science and African Studies at Michigan State University and senior adviser to Afrobarometer, and E. Gyimah-Boadi, Executive Director of Afrobarometer and the Ghana Center for Democratic Development

 

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Beyond the limelight and the headlines, the recent Group of 20 (G20) summit accomplished an important piece of business by launching the Compact with Africa. The next step is crucial: negotiating the priorities that the compact will address.

One key concept is that the compact is with – rather than for – Africa, implying that it will rely on true partnerships to pursue mutually agreed-upon goals.

With its contribution to a “20 Solutions” document presented to the G20 by a consortium of think tanks, the pan-African research network Afrobarometer is working to ensure that the compact will take into account what ordinary Africans say they want and need.

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