What is a good job: Designing employment policy for decent work and economic transformation
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Article summary
Notes from the Civil Society Policy Forum on 14 April titled What is a good job: Designing employment policy for decent work and economic transformation. Jobs are at the center of the World Bank Group’s strategy for economic development, but exactly what kind of jobs? As the World Bank Group finalises its “More and Better Jobs” indicator, this session discussed approaches to measuring job quality that promote decent work, support formalization, and enable socio-economic transformation.
Moderator
- Evelyn Astor, Director of Economic and Social Policy, ITUC
Panellists
- Anne-Cecile Coly, Vice President, UNSAS Senegal
- Sangheon Lee, Director of Employment Policy, ILO
- Luiz Vieira, Coordinator, Bretton Woods Project
- Federico Gil Sander, Manager, Jobs and Growth, Prosperity, WBG
A video recording of the event can be found here.
Organisers: International Trade Union Confederation, International Labour Organization, Bretton Woods Project, Eurodad
Evelyn: Just to set a bit of context, today, one in every five people in work globally, by conservative estimates, lives in poverty. For hundreds of millions of workers, the promise of a living wage remains a distant reality because of low pay and precarious conditions. Two billion people, nearly 60 per cent of the global labour force, are currently working in the informal economy. In some regions, such as Africa, this rate surpasses 80 per cent. For jobs to be truly transformative in delivering well-being and economic prosperity, governments and development institutions must ensure quality jobs with decent work, support formalization, and invest in productive areas of the economy.
It is within this backdrop that we want to discuss today what the Bank is doing to support job creation as well as promote and measure job quality. The first part of this discussion will specifically focus on the work the Bank is doing to develop a more and better jobs indicator. We will hear from the Bank around the latest versions of this indicator, which, if I understand correctly, is primarily focused on pay. We will also discuss different perspectives and methodologies from the International Labour Organisation, and trade union methodologies around measuring job quality.
The second part of this discussion is a bit broader. It will focus on the vision of the Bank on how it can support job creation and structural transformation, as well as the importance of social dialogue, meaning dialogue with representatives of workers themselves in the development of employment strategies.
Federico: At the core of developing this indicator of more and better jobs at the World Bank is that counting people is not enough. Many people have jobs but still live in poverty, and even those who are not poor may remain vulnerable. To fulfil the vision of a world free of poverty on a livable planet, jobs matter – but so does their quality, and whether they enable families to exit and stay out of poverty.
This makes things more complex, because job quality is not just about pay. There are many policy dimensions we discuss with governments – such as increasing women’s labour force participation or reviewing maternity leave – that are important for growth and structural transformation, but do not neatly translate into higher pay. That said, the indicator we developed starts from a few shared understandings: first, that quality is critical; and second, that while pay is not the whole story, it is a central part of job quality. Pay enables families to afford shelter, food, education and healthcare.
From a practical perspective, pay is also easier to measure across a wide range of interventions – from IFC investments to MIGA guarantees to IBRD and IDA projects. We therefore have stronger tools to capture the earnings dimension of jobs than other non-wage aspects, even though those remain important. This also points to a broader research agenda, including collaboration with the ILO.
With that in mind, let me briefly explain the indicator. This is not the full picture of what the World Bank does on jobs, but one way we measure impact. The indicator captures both job creation and higher earnings through labour income – the income people earn from work. If someone gains a job, or if their pay increases, both show up as higher labour income. So we begin by estimating the impact of a project on the labour income of its beneficiaries. These may be smallholder farmers with higher earnings, firms that grow and hire more through IFC support, or broader, economy-wide effects – for example from energy or transport projects that enable structural transformation. While working conditions within projects remain important and are governed by safeguards, the main objective is the wider economic impact.
We then divide this increase in labour income by the average wage of beneficiaries. This does two things: it introduces a distributional element – favouring impacts on lower-income groups – and expresses results in a form that can be operationalised. In practice, this can be framed as the percentage change in labour income multiplied by the number of beneficiaries, making it usable for project teams. Because it is a ratio of monetary values, the result is expressed in job-equivalent units. This can reflect either new jobs or improvements in existing ones.
Finally, this indicator sits within a broader scorecard, alongside measures such as social protection coverage. It is complemented by a results narrative to capture dimensions not fully reflected in a single metric, particularly non-wage aspects of job quality. Strengthening this, including through work with the ILO, remains an important next step.
Sangheon: I will place my remarks in the context of developing countries. The starting point is that, while the ILO consistently advocates for employment-related indicators, in many developing and low-income countries there is little observable relationship between economic growth and aggregate employment. In advanced economies, growth and employment tend to move together, forming the basis of macroeconomic policy. But in many developing countries, this relationship is weak or flat. This is largely because unemployment, as we define it, is often not an option – people cannot afford not to work. So they are almost always engaged in some form of activity. The key issue, therefore, is not whether people are employed, but what type of employment they have. This is why a multidimensional approach is essential: looking at pay, informality, social protection and fundamental labour rights such as freedom from forced labour and child labour, non-discrimination, and freedom of association. This approach is reflected in United Nations Sustainable Development Goal 8, which includes a broad set of complementary indicators capturing job quality, distribution, underemployment and low pay – not just employment levels.
Against this background, let me turn to the World Bank. Two years ago, when the Jobs Agenda was launched, the focus was primarily on the number of jobs. Since then, there has been progress in incorporating broader dimensions, leading to the “more and better jobs” framework. This is a meaningful step forward.
That said, further work is needed, particularly on integrating additional dimensions of job quality. From a development perspective, it is important to take a dynamic view of job quality in the context of structural transformation and inclusive growth. Development is about moving workers and firms from less productive to more productive and more decent activities. This process is inherently dynamic.
For that to happen, certain conditions are essential. Skills and training are not just outcomes of good jobs – they are prerequisites for enabling this transition. Similarly, social protection is critical, as workers need income security while they retrain or move between activities. Wage policies also matter: if wages do not improve, workers have little incentive to invest in new skills. So these elements – skills, social protection, wages – should not be seen only as outcomes of job quality, but as key inputs and enabling conditions for structural transformation.
My second point is that indicators are not just about measurement – they signal direction. They shape policy priorities and guide decision-making. That is why indicators must serve as a foundation for policy dialogue. We need structured engagement between governments, employers and workers to interpret these indicators, use them to design better policies, and monitor their impact over time. This brings us to the importance of social dialogue. The key question is how to ensure that indicators are developed and used through inclusive, tripartite processes, so that they support effective policymaking and better outcomes for workers and society.
Evelyn: Two follow-up questions to both of you. First, Federico, could you elaborate on how this new indicator will influence how the World Bank prioritises projects and policies? And are you considering integrating non-wage dimensions of job quality, or keeping the focus mainly on labour income and wages?
Second, on collaboration with the International Labour Organisation: to what extent do the jobs indicator and the Bank’s broader advice reflect ILO standards on living wages and decent work? And how are both institutions working together to ensure job creation leads to decent outcomes?
Federico: In terms of how the indicator influences projects and policies, the main objective is to get teams to focus on one key question: what is the impact of your project on increasing workers’ incomes? If this shifts project design even slightly in that direction, that is already a positive outcome. Teams are encouraged to base this on the best available evidence – drawing on robust literature to identify which types of interventions are most effective in raising labour income. At the same time, this is not the only priority. The scorecard includes many other indicators and targets – such as social protection and health coverage – so teams are balancing multiple objectives. This is not about creating a single-minded focus on wages or productivity, but about strengthening attention to jobs within a broader development agenda.
On non-wage dimensions, the increased focus on jobs should also encourage teams to look more closely at the types of jobs being created. The goal is not only higher pay, but jobs that can be considered “decent” in a broader sense. This is where collaboration with the ILO is important. At the project level, we want to improve data collection on non-wage aspects – such as social protection coverage, access to training and working conditions. Simply tracking these dimensions can begin to shift incentives, as teams start paying more attention to them. This is not a perfect system, but we hope it moves things in the right direction.
Sangheon: From the ILO side, we were invited by the World Bank to propose a set of indicators on job quality, which we did – admittedly a very extensive list. The objective now is to test how a job quality framework can be applied across different contexts, projects, and countries, and to develop more practical guidance over time.
One question that may emerge is whether the distinction between job quantity and job quality is always useful, particularly in the context of structural transformation. In many developing country contexts, that distinction may be less meaningful.
More broadly, indicators are not just technical tools – they shape action. Moving from counting jobs to measuring income and job quality changes what data is collected and influences policy direction. This applies not only to the World Bank, but also to other institutions such as the African Development Bank, which are also exploring how indicators can guide investment towards decent work outcomes.
Finally, social dialogue is central. Indicators should serve as a basis for discussion among governments, employers and workers, helping to guide policy design, monitor outcomes and improve interventions over time. I would strongly encourage continued engagement in shaping and using these indicators.
Luiz: Over the past year, during the Bank’s 80th anniversary discussions, the “One World Bank” refresh, and broader strategic reviews, we have repeatedly called on the Bank to rethink its programming with a stronger focus on economic transformation. Unfortunately, these calls have largely gone unanswered. And it is difficult to ignore the broader context: persistent commodity dependence in the Global South, low graduation rates from middle-income status, few countries making the leap to high-income status, and recurring debt crises – now exacerbated by climate change.
The Bank continues to emphasise private capital mobilisation. From our perspective, very little has fundamentally changed. At times, it feels like a return to the Washington Consensus: improve the business environment and growth will follow.
To be clear, we do not question the role of the private sector in job creation or growth. But what matters is what kind of private sector is being supported. One concern is that the emphasis on private capital mobilisation risks contributing to a “race to the bottom” in job quality, as well as in fiscal and tax policies. After all, the issue is often not the absence of capital, but the perceived risk–reward balance in these countries – leading to efforts to de-risk investment in ways that may shift costs elsewhere.
I also want to note some evidence: a 2024 study suggests that between 2005 and 2020, transnational corporations generated significant net financial outflows, highlighting the concentration of global investment flows. This raises questions about what exactly we mean when we talk about “mobilising private capital”, especially when much of the focus is on foreign direct investment and enabling environments for it. At the same time, ILO research on labour market concentration and wage inequality shows that higher concentration is associated with greater wage inequality, particularly at the top of the distribution. It also highlights that institutions such as trade unions, collective bargaining, and minimum wages can mitigate these effects.
So for us, the key issue is not just job creation, but the quality of jobs and the need to support genuine economic transformation. In that context, I would be interested in how the World Bank is integrating the jobs agenda into Country Partnership Frameworks. Are jobs being discussed as part of national development and structural transformation strategies? And are these discussions happening meaningfully with unions and governments?
On industrial policy, we welcome the recent research paper from the Bank. It is interesting, though, that many of the successful examples cited were historically not supported by Bank staff. It remains to be seen whether this research will actually influence practice on the ground and lead to a rethinking of policy advice.
Evelyn: Anne-Cecile, a couple of questions for you. First of all, can you tell us a little about the experience in Senegal, a country that has historically been a major recipient of both multilateral and private finance? There are projects such as the Bus Rapid Transit programme that have been presented as successes of public–private partnerships for development, but we would like to hear from you to what extent workers’ priorities are actually reflected in these projects, and whether labour unions are engaged in their design and implementation.
And second, more broadly, from a labour perspective, what are the Senegalese trade union priorities in terms of decent job creation and economic transformation? It would be important to hear directly from workers’ representatives how this fits within the broader approach of the Bank to job creation.
Anne-Cecile: Today, it is difficult to define a single set of “priorities” for workers in isolation, because national and global economic development priorities are intertwined. But from our perspective, human development is central. Respect for rights, decent work, and social protection are key priorities, and we believe these are essential for inclusive growth.
At the same time, we cannot ignore the current crisis. How can we speak about decent work when purchasing power is falling and the cost of living is rising sharply? The conditions of workers have deteriorated significantly. This makes the discussion of wages, protection and economic policy even more urgent.
Formalising the informal economy is a major priority. In Senegal, around 80–90 per cent of workers are in the informal sector, without protection. It is difficult to achieve sustainable economic development without addressing this. This is why unions strongly support Recommendation 204 on the transition from the informal to the formal economy.
We also see ecological transformation as a key issue. Senegal is moving towards green energy as well as oil and gas development, but the social dimension – job security, transition, and protection – must be guaranteed.
On major infrastructure projects and public–private partnerships, such as the Bus Rapid Transit and other transport investments, it is true that these are often seen as financial successes. But from an employment perspective, the social dimension is often not sufficiently integrated. To give a concrete example, workers who were previously involved in railway station management found themselves reassigned under new projects in more limited roles. This creates challenges. For economic transformation to be effective, the social dimension must be integrated upstream, not added afterwards. Early involvement of workers would allow better integration of job quality and employment considerations into project design. This is something we continue to request. It could help create not only more jobs, but better-quality jobs.
In the case of the BRT project, for example, it was expected to create more than 2,000 jobs. While the project is still being assessed, it is clear that expectations in terms of employment outcomes have not been fully met. This raises questions about long-term sustainability when the social dimension of employment is not fully integrated.
Finally, unions emphasise the importance of accessibility. Projects should not only benefit an urban elite, but all citizens. That is a key condition for inclusive development.
Federico: On industrial policy and what may be changing, I would encourage everyone to look at the Development Committee paper published for the Spring Meetings. What seems different is that, while we still talk about creating an enabling environment, there is now a stronger sectoral focus introduced by President Banga. The emphasis is on specific sectors – value-added manufacturing, agribusiness, healthcare, tourism, and infrastructure. These are sectors that, in different ways, are closely linked to job creation and structural transformation. Agribusiness, for example, spans from smallholder farmers to agro processing; healthcare includes both services and pharmaceutical production; tourism is a major job creator; and infrastructure is both a source of employment and an enabler of broader transformation.
So the question becomes: what does an enabling environment mean for each of these sectors? Rather than a purely horizontal approach – improving the business climate and letting markets decide – the focus is increasingly on how policy, regulation and infrastructure choices support specific sectoral development paths.
This represents a cultural shift within the Bank. Instead of asking only what general reforms improve the business environment, there is now more emphasis on how infrastructure, regulation and investment decisions connect to sectoral ecosystems – for example, how transport infrastructure supports tourism, or how regulations enable hospitality development alongside airports and connectivity.
This is somewhat different from a classical approach in economics, but there is a clear attempt to reorient thinking towards sector-driven structural transformation. Of course, the real test is implementation – we will need to see over the coming years whether this leads to meaningful change.
One additional point concerns distributional impacts and transitions. It is important that projects include proper dialogue on who is affected and how transitions are managed, so that benefits are shared and disruptions are addressed. There was an example discussed at a previous dialogue with the International Trade Union Confederation about the Bus Rapid Transit system in Senegal. Informal drivers initially opposed the project because they feared losing their livelihoods. While their working conditions were often extremely poor, this was nonetheless their source of income. This illustrates why we need to pay attention not only to project benefits, but also to those negatively affected.
I am not the one implementing these projects, so it is easier for me to say this, but I think the Bank needs to ensure that it considers all affected groups. Even successful projects like the BRT – now creating around 1,000 jobs – should also include a clear plan for supporting those whose livelihoods were disrupted in the transition.
Questions and answers
María José from Eurodad: I would like to make two points. First, on the indicator. It is important to emphasise what has already been mentioned about its current focus on wage increases. It is crucial to think about how we move towards a more comprehensive approach that includes social protection, rights at work and social dialogue. There are references to these elements elsewhere, but the question is how we strengthen the quality dimension of the indicator itself in a more integrated way. From our perspective, and working with civil society and trade union partners who have followed the Bank’s jobs agenda since its early stages, there is also a broader structural transformation question. While we recognise the identification of five priority sectors, we would like to see more clarity on how the Bank assesses its contribution to structural transformation overall.
One important element would be to track not only the number of jobs created, but also their distribution across sectors – particularly distinguishing between high value-added sectors and lower value-added activities such as extractives or primary commodity production. Without this differentiation, there is a risk of missing the transformative dimension of the jobs agenda.
Finally, there is a broader concern that the jobs agenda risks becoming too closely linked to private sector development and capital mobilisation as an end in itself, rather than as a means to structural transformation.
Representative from the Middle East: First, on youth employment. I recently worked in Egypt on scaling up a youth employment project implemented by Plan International. One thing I observed is that project design often becomes extremely complex – adding layers of components, soft skills, and references to the Bank – which can make scaling very difficult. It sometimes feels like we try to solve every problem at once. I am not sure what the “secret sauce” is for successfully scaling youth employment programmes.
Second, on AI and the future of work. In an experiment with my 18 staff over the past six months, I asked them to map their tasks and use AI tools. What surprised me is that much of what we think of as “jobs” is actually a collection of tasks, many of which are already being automated or significantly reshaped by AI – especially in white-collar work. This raises a deeper question: the challenge is no longer just job design, but task restructuring and upskilling. I did not reduce any staff, but it became clear how much adaptation is needed to shift people toward higher-value tasks.
Representative from CSAAE in Nigeria: How can we talk about quality or decent jobs if the people delivering World Bank-supported projects are not themselves paid properly or treated decently? We have repeatedly raised concerns that the World Bank and IMF do not sufficiently hold governments accountable for misuse of funds, including during Covid-19 lending to Nigeria. So my question is: what mechanisms exist to ensure accountability in the use of your funds, especially when implementation is handled by governments with weak governance systems?
A second point: as an employer myself, I understand the challenges of paying fair wages. But how can the private sector pay decent wages when it is heavily taxed, burdened by fees, and operating in environments with weak infrastructure – electricity, water, telecommunications – and unstable regulatory conditions? In Nigeria, new taxation policies – supported by IMF engagement – will further increase pressures on employers. At the same time, borrowing costs are high and infrastructure gaps remain severe. In this context, how realistic is it to expect private sector wage increases without addressing these structural constraints?
Student at American University: My question concerns inequality. We often talk about job creation, but we also need to talk about inequality. Over the past decades, global growth has increased, driven by productivity and job creation, yet inequality has also increased. As Thomas Piketty argues, returns to capital have outpaced productivity growth, meaning that wealth generated by growth often accrues to those who already own capital. In Africa, for example, we see strong headline growth rates, but this does not always translate into decent jobs or broad-based improvements in living standards.
So my question is: to what extent is inequality itself a driver of weak job quality outcomes? And what role should redistribution play? What is the role of governments, the private sector, and institutions like the World Bank, IMF and ILO in addressing this?
Representative from MIT in Mozambique: We have been discussing formalising the informal sector for decades in Africa, but this reality persists. Perhaps instead of focusing only on formalisation, we should think about how to strengthen the informal sector itself – how to improve productivity and enable it to contribute more effectively to GDP and livelihoods. Maybe the question is not only how to formalise, but how to make informal work more viable and productive within existing realities.
Representative from an Egyptian NGO: My question concerns self-employment, which is very important in many developing countries, especially for vulnerable groups such as women and people with disabilities.
How do you assess and measure the quality of self-employment, given that it often offers flexibility but lacks social protection? And how do you evaluate income quality when earnings are irregular and variable?
Federico: On manufacturing and value-added manufacturing, the idea is that commodities can be transformed within countries. I think the World Bank’s mining strategy reflects that, and similarly the intention is to promote more value addition and structural transformation. Again, let’s reconvene and see whether this is being affected, but that is the message I am getting from our leadership.
On AI, going back to the World Bank’s work, part of the rationale for the five sectors is that, at least in the short term, they can be helped by what we call “small AI” rather than being replaced or disrupted by “big AI.” For agriculture, this could mean giving farmers tools to diagnose what fertilizer or seed to use, including more climate- or weather-resilient options. For hotels, it could mean tools to support online bookings. So in the short term, some of these sectors can still be supported by technology. Longer term, that requires further discussion, and we will likely return to it in a dedicated session. But for the five sectors, that was part of the motivation.
On formalisation, I think it is important to clarify the objective. In some cases, it is about ensuring sufficient social protection for informal workers. In other cases, it is about whether firms are being forced to stay small, which hurts productivity and job quality. That leads us to issues like registration, permits, licensing, and tax administration. There is also a broader tension: governments need to collect more revenue from those who can pay in order to provide better services, but that must be part of a social contract. If governments collect more, they also need to deliver better social protection, education, and infrastructure. We know this is challenging.
And if I may add, one key point the President has made is that we cannot talk about an “enabling environment” without acknowledging corruption and harassment – particularly small-scale corruption, such as tax inspectors targeting small businesses instead of large ones. That is not enabling at all. Addressing corruption, from small to large scale, is therefore essential. This is something we agree on in principle, even if there is still debate on how far the World Bank can contribute.
Sangheon: The recent conversation about market concentration and inequality is very important. We are actually using World Bank data to estimate labour market concentration and pricing. The key point is not just correlation, but mitigation – through labour market institutions, including minimum wages. With strong minimum wages, the relationship between labour market concentration and inequality improves. The Inter-American Development Bank recently published work on competition and found increasing labour market concentration, which is why they are now shifting their view on minimum wages.
On industrial policy, even successful policies have often not been effective from a job perspective. That suggests something is structurally wrong in how we organise structural transformation, which needs further examination. A major constraint in developing countries is fiscal capacity and lack of capital investment. Many cannot afford meaningful industrial policies at all. We also need to rethink whether industrial policy should focus only on manufacturing. We should be more open to industrial policy in services, including AI-related sectors. On employment, improving labour markets and training alone is not enough. We also need demand-side policies for skills, which can only come from effective industrial policy.
On AI, we do not yet know the full impact. The job substitution effect may be lower than feared – around 3.5 per cent risk. But the bigger issue is uneven exposure: in developed countries, exposure to AI disruption is lower, which is not necessarily good news – it may simply mean slower adoption. This creates a new form of digital divide. We may also see higher concentration and weaker competitive dynamics.
Finally, on redistribution: I agree it is necessary, but if we rely only on redistribution without addressing market income formation, we will constantly chase a moving target. That is why intervening on wage formation and labour markets is essential.
Luiz: I am concerned about the focus on private capital mobilisation. I understand the constraints, but this model has not been shown to work as expected. We see persistent problems – low graduation rates, commodity dependence, and especially large-scale profit repatriation. For example, over $1 trillion a year in FDI profits is repatriated by multinational corporations. That is money not available for development needs. There is also a risk that states compete to attract investment by lowering labour standards, environmental protections, and taxes. This creates pressure toward the bottom, and I don’t think there is enough open discussion about these trade-offs.
I would like the World Bank to engage more seriously with the costs as well as the benefits of private sector-led strategies.
Anne-Cecile: On informality and youth employment, many young people are entrepreneurs, and that is important. But entrepreneurship cannot work if we do not talk about taxation. If a person with a small salary is taxed at 30 per cent and still has to meet household needs, it becomes unviable. Tax systems must reflect economic reality.
We need taxation adapted to income levels and poverty conditions. Otherwise, we are undermining workers and economic transformation itself.
