Jobs For Growth

Jobs are essential for the growth of individuals and countries alike. Achieving personal fulfillment is harder without a job, just as an economy as a whole cannot develop without the impetus of the labor market. These two perspectives unquestionably go hand in hand: from the individual perspective, finding a good job is a legitimate aspiration for anyone who wishes to support oneself and one's family; from the societal perspective, creating more and better jobs is essential to the achievement of lasting and equitable growth. Jobs for Growth rests on this dual vision. This book examines the performance of the region's labor market and, based on this analysis, proposes an integrated package of measures for both personal growth (through successful career paths) and economic growth (through more high-quality jobs and higher productivity). Over the past two decades, the bullish economic cycle has yielded undeniable gains for labor markets in Latin America and the Caribbean (LAC), among them lower unemployment, improved job creation, and a substantial increase in wages. However, the situation on the horizon -stagnation of the region's growth and weaknesses in the global macroeconomic outlook- have increased the urgency to find solutions to today's most pressing labor problems. This volume shows that, despite the still-low unemployment rates, the region may find itself trapped in a vicious cycle of poor-quality jobs -a phenomenon especially visible in the high percentage of informal jobs (which are defined in this publication as those without access to social security benefits) and in the high proportion of very short-lived jobs. As the title Jobs for Growth indicates, breaking this cycle will require comprehensive policies that boost productivity.

Five years after the onset of the global financial crisis, Europe’s economy is still fragile. Notwithstanding recent positive signs amid calmer financial markets, medium-term growth is likely to remain frail owing to continuing weaknesses and vulnerabilities at the country level and in the fabric of European institutions and banks, especially in the euro area. In addition, unemployment in many countries has reached very high levels. The IMF research collected in this volume provides a number of guideposts that offer an opportunity for stronger and better-balanced growth and employment in Europe after what has been a long and dismal period of crisis.

Job creation and growth with inclusion are imperatives that resonate today in every country. While some advanced countries face the challenge of supporting aggregate demand with limited fiscal space in the aftermath of the Great Recession, many countries have to address ways to generate growth and create jobs in the face of the strong ongoing global megatrends of technological change, globalization, and significant shifts in demographic trends. The latter includes rapid population aging in some parts of the world, and the entry of a large number of new workers into the labor force in others. Low female labor force participation represents a significant missed opportunity to strengthen economic development and growth in many countries.

This note provides operational guidance to staff on Jobs and Growth issues in surveillance and program work, building on the Board paper “Jobs and Growth: Analytical and Operational Considerations for the Fund” (hereafter, “Board paper”). Jobs and Growth issues can be defined broadly as issues relating to GDP growth, employment, and income distribution. The Board paper noted that work on these issues needs to be consistent with both the Fund’s mandate and its areas of expertise. On a number of structural issues, especially related to labor market reforms and social protection schemes, the Fund would need to effectively collaborate with other institutions with greater relevant expertise.

This report by the European Union Committee examines the progress of the European Union in initiating a strategy for jobs and growth across the Community as a whole. The background to this report stems from the Spring European Council meeting in 2000, in Lisbon, and the launch of an economic reform agenda. The Committee observes that since the "Lisbon Agenda", little progress has been made and the performance of many of the larger European economies has been poor. The Committee has noted that certain worrying signs of protectionist behaviour have developed, especially regarding barriers of cross border mergers. The EU has recognized this weak performance and the Agenda was relaunched in 2005, with a greater focus on the key economic priorities of more growth and jobs. Also, all Member States are now required to produce an annual National Action Plan highlighting the policies being pursued to improve economic growth and increase employment. The Committee sets out a number of recommendations to further push forward the priorities of growth and jobs, including: that the Commission should seek to complete the progress towards an internal market; that Member States should influence one another in the development of good practice through statistical comparison of their economic progress, and agree on quantifiable targets; that the format of the National Action Plans should include not only the successes, but where countries are underperforming; that the Agenda be given a higher public profile.

This supplement provides case studies of how countries around the world have addressed jobs and growth challenges, and how Fund staff have helped in this. The studies are meant to provide cross country experience. They share a broad structure, organized around four questions: ? What was the initial situation regarding growth, employment, and income distribution? ? What policy measures were implemented to enhance growth and employment and to even out the distribution of income? Were potential complementarities or trade-offs between enhancing growth, employment, and income distribution considered? ? How did Fund staff help the authorities? For example, in which areas did staff help the authorities analyze issues, how did staff go about analyzing issues, and what were the main considerations that shaped staff’s recommendations? ? What were the results of policy actions taken?