Deconstructing Job Creation

This paper studies net employment growth across 21 OECD economies in 1980-97, focusing on experiences within the European Union. It finds that sectoral effects can only partially account for differences in job creation. By contrast, it shows that a policy package including low taxation and flexible employment protection legislation is associated with high job creation and can account for most of the observed differences. The Netherlands’ success is largely accounted for by the creation of part-time jobs for women aged 25-49 in the services sector, but in most EU countries the substitution of part-time jobs for full-time jobs is considerable.

This paper studies net employment growth across 21 OECD economies in 1980-97, focusing on experiences within the European Union. It finds that sectoral effects can only partially account for differences in job creation. By contrast, it shows that a policy package including low taxation and flexible employment protection legislation is associated with high job creation and can account for most of the observed differences. The Netherlands` success is largely accounted for by the creation of part-time jobs for women aged 25-49 in the services sector, but in most EU countries the substitution of part-time jobs for full-time jobs is considerable.

Covid-19 and war-induced commodity price fluctuations, and broadening price pressures have led to a surge in inflation in many sub-Saharan Africa (SSA) countries. To adjust to increasing costs, firms have resorted to several measures including shuttering offices, reducing businesses, laying off, and freezing hiring, thus putting at risk job creation and raising concerns of youth unemployment. This paper explores the effects of inflation on private employment growth in SSA using a large firm -level dataset from the World Bank’s Enterprise Surveys. We find a non-linear relationship between inflation and job creation in SSA, with job creation being negatively correlated with inflation rate when the latter is above 14 percent. This finding holds regardless of the sector of activities of firms and the exchange rate regime. In addition, the paper finds some differential effects based on the type of products. An increase in fuel prices tends to be more detrimental to job creation than food prices. The study also provides evidence that the state of implementation of structural reforms matters. The results show that inflation reduces job opportunities mostly in countries with bad or no structural reforms.

This clear, accessible volume provides a comprehensive overview of the ongoing debate over the determining factors of and key influences on employment growth and labor market training, education, and related policies in the United States. Drawing on the work of distinguished labor economists, the chapters tackle questions posed by job and skill demands in the "new high-tech economy" and explore sources of employment growth; productivity growth and its implications for future employment; government mandates, labor costs, and employment; and labor force demographics, income inequality, and returns to human capital. These topics are central concerns for government, which must judge every prospective policy proposal by its effects on employment growth. Washington keeps at least one eye firmly on the jobs picture, and public officials at every level are constantly aware of the issues surrounding American job security. The jobs issue reaches beyond this focus on the unemployment rate and on total employment, including the rate at which employment is seen as growing, the growth of real wages, the security of employment, returns to human capital, uncertainty about the education and training best suited for a world of rapidly changing economic conditions, and the distribution of the gains from growth across economic classes and population groups.

What Do Fast Job Creators Look Like? Some Stylized Facts and Perspectives on South Africa

In this Wall Street Journal bestseller, why the future of work requires the deconstruction of jobs and the reconstruction of work. Work is traditionally understood as a “job,” and workers as “jobholders.” Jobs are structured by titles, hierarchies, and qualifications. In Work without Jobs, the Wall Street Journal bestseller, Ravin Jesuthasan and John Boudreau propose a radically new way of looking at work. They describe a new “work operating system” that deconstructs jobs into their component parts and reconstructs these components into more optimal combinations that reflect the skills and abilities of individual workers. In a new normal of rapidly accelerating automation, demands for organizational agility, efforts to increase diversity, and the emergence of alternative work arrangements, the old system based on jobs and jobholders is cumbersome and ungainly. Jesuthasan and Boudreau’s new system lays out a roadmap for the future of work. Work without Jobs presents real-world cases that show how leading organizations are embracing work deconstruction and reinvention. For example, when a robot, chatbot, or artificial intelligence takes over parts of a job while a human worker continues to do other parts, what is the “job”? DHL found some answers when it deployed social robotics at its distribution centers. Meanwhile, the biotechnology company Genentech deconstructed jobs to increase flexibility, worker engagement, and retention. Other organizations achieved agility with internal talent marketplaces, worker exchanges, freelancers, crowdsourcing, and partnerships. It’s time for organizations to reboot their work operating system, and Work without Jobs offers an essential guide for doing so.

The scourge of America’s economy isn't the success of the 1 percent—quite the opposite. The real problem is the government’s well-meaning but misguided attempt to reduce the payoffs for success. Four years ago, Edward Conard wrote a controversial bestseller, Unintended Consequences, which set the record straight on the financial crisis of 2008 and explained why U.S. growth was accelerating relative to other high-wage economies. He warned that loose monetary policy would produce neither growth nor inflation, that expansionary fiscal policy would have no lasting benefit on growth in the aftermath of the crisis, and that ill-advised attempts to rein in banking based on misplaced blame would slow an already weak recovery. Unfortunately, he was right. Now he’s back with another provocative argument: that our current obsession with income inequality is misguided and will only slow growth further. Using fact-based logic, Conard tracks the implications of an economy now constrained by both its capacity for risk-taking and by a shortage of properly trained talent—rather than by labor or capital, as was the case historically. He uses this fresh perspective to challenge the conclusions of liberal economists like Larry Summers and Joseph Stiglitz and the myths of “crony capitalism” more broadly. Instead, he argues that the growing wealth of most successful Americans is not to blame for the stagnating incomes of the middle and working classes. If anything, the success of the 1 percent has put upward pressure on employment and wages. Conard argues that high payoffs for success motivate talent to get the training and take the risks that gradually loosen the constraints to growth. Well-meaning attempts to decrease inequality through redistribution dull these incentives, gradually hurting not just the 1 percent but everyone else as well. Conard outlines a plan for growing middle- and working-class wages in an economy with a near infinite supply of labor that is shifting from capital-intensive manufacturing to knowledge-intensive, innovation-driven fields. He urges us to stop blaming the success of the 1 percent for slow wage growth and embrace the upside of inequality: faster growth and greater prosperity for everyone.

A region known for its volatility, Latin America and the Caribbean (LAC) has suffered severe economic and social setbacks from crises—including the COVID-19 pandemic. These crises have taken their toll on careers, wage growth, and productivity. Employment in Crisis: The Path to Better Jobs in a Post-COVID-19 Latin America provides new evidence on the effects of crises on the region’s workers and firms and suggests several policy responses that can bolster long-term and inclusive economic growth. This report has three key findings. First, crises lead to persistent employment losses and accelerate structural changes away from the formal sector. This change occurs more through reductions in the creation of formal jobs than through job destruction. Second, some workers recover from crises, while others are permanently scarred by them. Low-skilled workers can suffer up to a decade of lower earnings caused by crises, while high-skilled workers rebound fast, exacerbating the LAC region’s high level of inequality. Formal workers suffer smaller employment and wage losses in localities with higher rates of informality. And the reduced job flows caused by crises decrease welfare, but workers in localities with more job opportunities, whether formal or informal, bounce back better. Third, crises’ cleansing effects can increase efficiency and productivity, but these effects are dampened by the LAC region’s less competitive market structure. Rather than becoming more agile and productive during economic downturns, protected sectors and firms gain market share and crowd out others, trapping valuable resources. This report proposes a three-pronged mix of policies to improve the LAC region’s responses to crises: •Create a more stable macroeconomic environment to smooth the impacts of crises, including automatic stabilizers such as unemployment insurance and short-term compensation programs; •Increase the capacity of social protection and labor programs to respond to crises and coalesce these programs into systems that complement income support with reemployment assistance and reskilling opportunities; and •Tackle structural issues, including the lack of product market competition and the spatial dimension behind poor labor market adjustment—a “good jobs and good firms†? agenda.