This study presents results from a randomized evaluation of two labor market interventions targeted to young women aged 18 to 19 years in three of Nairobi's poorest neighborhoods.
... See More + One treatment offered participants a bundled intervention designed to simultaneously relieve credit and human capital constraints; a second treatment provided women with an unrestricted cash grant, but no training or other support. Both interventions had economically large and statistically significant impacts on income over the medium term (7 to 10 months after the end of the interventions), but these impacts dissipated in the second year after treatment. The results are consistent with a model in which savings constraints prevent women from smoothing consumption after receiving large transfers -- even in the absence of credit constraints, and when participants have no intention of remaining in entrepreneurship. The study also shows that participants hold remarkably accurate beliefs about the impacts of the treatments on occupational choice
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Policy Research Working Paper WPS7977 FEB 16, 2017
For most of the last two decades, Ghana’s economy has been on a high growth path, which has been accompanied by significant reduction in poverty.
... See More + Despite this progress, large macroeconomic imbalances threaten growth and continued poverty reduction. Rapid economic growth and poverty reduction has been accompanied by growing inequality in terms of income and geographical areas. The Government of Ghana (GoG) has a comprehensive national social protection strategy (NSPS) in place and is finalizing the national social protection policy. Given existing macroeconomic challenges, resources allocated to social protection programs should be used in the most cost-effective and pro-poor manner. This assessment aims to contribute to the rationalization of social protection public expenditures, building on recent work by the GoG. This report updates the analysis on core social assistance programs, active labor market programs, social insurance schemes including the national health insurance scheme, and general fuel and electricity subsidies. To establish a more effective and sustainable social protection system, the report recommends addressing the following four challenges: consolidating the substantial gains achieved to date and building a stronger program portfolio; strengthening expenditure management; expanding well-targeted programs and rationalizing poorly targeted programs; and ensuring the sustainability of key programs.
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Public Expenditure Review 114004 NOV 26, 2016
Marques, Jose Silverio; Honorati,MaddalenaDisclosed
Ghana was, until very recently, a success story in Africa, achieving high and sustained growth and impressive poverty reduction. However, Ghana is now facing major challenges in diversifying its economy, sustaining growth, and making it more inclusive.
... See More + Most of the new jobs that have been created in the past decade have been in low-earning, low-productivity trade services. Macroeconomic instability, limited diversification and growing inequities in Ghana’s labor markets make it harder for the economy to create more jobs, and particularly, better jobs. Employment needs to expand in both urban areas, which will continue to grow rapidly, and rural areas, where poverty is still concentrated. The current fiscal and economic crisis is heightening the need for urgent reforms but limiting the room for maneuver and increasing pressure for a careful prioritization of policy actions. Going forward, Ghana will need to consider an integrated jobs strategy that addresses barriers to the business climate, deficiencies in skills, lack of competitiveness of job-creating sectors, problems with labor mobility, and the need for comprehensive labor market regulation. Ghana needs to diversify its economy through gains in productivity in sectors like agribusiness, transport, construction, energy, and information and communications technology (ICT) services. Productivity needs to be increased also in agriculture, in order to increase the earnings potential for the many poor who still work there. In particular, Ghana’s youth and women need help in connecting to these jobs, through relevant skills development and services that target gaps in information about job opportunities. Even with significant effort, most of Ghana’s population will continue to work in jobs characterized by low and fluctuating earnings for the foreseeable future, however, and they will need social safety nets that help them manage vulnerability to income shortfalls. More productive and inclusive jobs will help Ghana move to a second phase of structural transformation and develop into a modern middle-income economy.
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Publication 109384 OCT 20, 2016
Honorati,Maddalena; Johansson De Silva,SaraDisclosed
Creating productive jobs is one of the greatest challenges in Ghana. This paper looks at job creation and its relationship with firm productivity and the quality of jobs among registered firms in the Ghanaian private sector, based on the 2013 World Bank Enterprise Survey.
... See More + The study looks at the typology of firms in the industry and service sectors, identifying those that have created the most jobs, and the relative quality of these jobs in terms of productivity and firms' average wage bill. Although the formal private sector employs only a tiny share of total employment, the results show that larger and older firms account for the majority of workers, and formal jobs density is highest in Accra (Accra Metropolitan Area and Tema). Large firms also pay higher wages on average, are more productive, and account for most of the aggregate net formal job creation between 2010 and 2012. However, the relationship between size and productivity is positive and statistically significant, mostly driven by the upper part of the firm size distribution, pointing to potential market segmentations as micro, small, and medium firms create fewer jobs and are less productive. Removing barriers to the growth of micro, small, and medium size enterprises, and to the allocation of resources toward more efficient firms should be a key priority for policy makers.
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Policy Research Working Paper WPS7835 SEP 27, 2016
This policy note provides a view of the main challenges facing Ghana youth and proposes policy options to address them. The note: (i) highlights youth key characteristics from the perspective of their skills and jobs and the constraints they face, (ii) describes the institutional set up and strategy governing youth employment interventions in Ghana and what is known about existing initiatives in Ghana, and (iii) proposes policy avenues going forward and the particular role the government can play.
... See More + Because implementing such policies will prove a daunting task for any government, prioritization is critical. The analysis attempts to structure policy priorities with a proposed sequencing around short-term policy options, or quick gains in the first year; and medium-term program reform options, which may take longer. This note is mainly targeted to the National Youth Authority (NYA) within Ministry of Employment and Labor Relations (MELR), and to the Ministry of Youth and Sports (MYS), in charge of the policy making process on youth employment, as well as all their implementing partners within and outside the government as identified in the 2014-2017 National Youth Policy action plan.
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Working Paper 106877 JUN 01, 2016
Honorati,Maddalena; Johansson De Silva,SaraDisclosed
This study uses a randomized experiment to evaluate the impacts of the training and internship program piloted in Nairobi, Mombasa and Kisumu counties by the Kenya Private Sector Alliance and the Government of Kenya with support from the World Bank’s Kenya Youth Empowerment Project.
... See More + The program provided three months of classroom-based technical training coupled with three months of internships in private firms to vulnerable youths between ages 15 and 29 years, with vulnerable being defined as those out of school and/or with no permanent job. The analysis in this paper is based on survey data collected before the program started (July 2012) and 15 months after the program ended (July 2014). The results of the impact evaluation show that the program has been successful in placing youths in paid jobs and has contributed to an increase of 15 percent in current employment among male participants. The evaluation also found that the program has had positive effects on wage earnings, especially those of females and among older males, with wages increasing by about K Sh 5,000 for males and by K Sh 7,500 for females. With a total unit cost of K Sh 97,000 per beneficiary, an estimated K Sh 6,768 monthly wage for males and K Sh 9,623 monthly wage for females, the program’s benefits exceeded the costs for males and females. The program also encouraged youths to participate in either (certified) skills training or an internship program, and helped to increase the probability of participants’ opening a bank account and accumulating savings (for females).
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Policy Research Working Paper WPS7404 AUG 27, 2015
Over the last decade, a policy revolution has been underway in the developing and emerging world. Country after country is systematically providing non-contributory transfers to poor and vulnerable people, in order to protect them against economic shocks and to enable them to invest in themselves and their children.
... See More + Social safety nets or social transfers, as these are called, have spread rapidly from their early prominence in the middle-income countries of Latin America and Europe increasingly to nations in Africa, Asia and the Middle East - and today, over 130 developing countries have made investments in social safety nets an important pillar of economic development policies. The statistics and analysis in The State of Social Safety Nets 2015 capture this revolution, and reveal it in many dimensions at the country, regional, and international levels. This latest edition of a periodic series brings together a large body of data that was not previously available, drawing on the World Bank's ASPIRE database and other sources. Why have so many countries made a firm commitment to incorporate social safety nets as part of their social and economic policy architecture? Because social safety nets work. This report also reports on the rigorous evidence that demonstrates their impact, and also points the way to making them even more efficient and effective at meeting their development goals. This latest edition of a periodic series brings together a large body of data that was not previously available, drawing on the World Bank's ASPIRE database and other sources to examine trends in coverage, spending, and safety nets program performance.
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This publication begins a series that will monitor and report on social safety nets in developing countries. This first report in the series provides key social safety nets statistics and explains trends using information from 146 countries, including detailed household survey data from 69 countries in the World Bank's Atlas of Social Protection: Indicators of Resilience and Equity (ASPIRE) database.
... See More + This report reviews important policy and practical developments in social safety net programs and highlights emerging innovations. While the primary focus is on developing and emerging countries, it also includes some references to high-income settings.
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Training programs mainly address market failures related to lack of skills (technical, cognitive, non-cognitive). This paper conducts a comprehensive review of training programs effectiveness in developing countries.
... See More + Based on relevant international experiences, the paper highlights key design features associated with program success as well as implementation challenges and discusses their policy implication. Success of training programs is deeply related with the content of the skills provided and how well they serve the local labor demand (demand-driven design) and with the presence of a sound governance structure for training providers and beneficiaries. In particular, the effectiveness of training programs for youth tends to be higher when a 'comprehensive' approach is taken by combining different types of training with complementary support services. The ultimate goal is to inform new program design and improve the performance of current training programs.
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Working Paper (Numbered Series) 78980 JUN 01, 2013
This paper provides a synthetic and systematic review on the effectiveness of various entrepreneurship programs in developing countries. It adopts a meta-regression analysis using 37 impact evaluation studies that were in the public domain by March 2012, and draws out several lessons on the design of the programs.
... See More + The paper observes wide variation in program effectiveness across different interventions depending on outcomes, types of beneficiaries, and country context. Overall, entrepreneurship programs have a positive and large impact for youth and on business knowledge and practice, but no immediate translation into business set-up and expansion or increased income. At a disaggregate level by outcome groups, providing a package of training and financing is more effective for labor activities. In addition, financing support appears more effective for women and business training for existing entrepreneurs than other interventions to improve business performance.
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Policy Research Working Paper WPS6402 APR 01, 2013
Fostering entrepreneurship is widely perceived to be a critical policy agenda to expand employment and earning opportunities and to reduce poverty.
... See More + Sound macroeconomic conditions and business environment including infrastructure, regulation, and legal environment have typically been emphasized to increase entrepreneurial activities and create jobs. While these remain relevant, in developing countries, increasing attention is being paid to the role of labor policies that aim to reduce constraints and enhance productivity among the self-employed and small-scale entrepreneurs. The next section describes the procedure for constructing data and discusses main features of the entrepreneurship programs in our sample studies. Section three presents a standardization and estimation strategy using Meta regressions and discusses methodology. Section four then discusses the main findings of the Meta analysis. Finally, Section five concludes the study.
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Working Paper (Numbered Series) 77168 APR 01, 2013
Throughout the developing world there is a growing demand for advice on the design of policies to facilitate access of the most vulnerable individuals to jobs, while reducing their dependency from public income support schemes.
... See More + Even though these policies are common to both the activation and graduation agendas, a separation is needed as the graduation of beneficiaries out of poverty is a much more ambitious agenda. This paper proposes a simple policy framework highlighting the most common barriers for productive employment. It also reviews the topic of incentive compatibility of income support schemes and employment support programs that are used to address them. The paper finds that, especially in middle income countries, activation and active labor market programs play an important role connecting individuals to jobs and improving earnings opportunities. In low income countries, these programs are far from being a panacea to graduate beneficiaries out of poverty. Furthermore, only scant evidence is available on the pathways to graduation and significant knowledge gaps remain. More cross-disciplinary research is needed to strengthen the evidence base and develop recommendations for different contexts and capacity levels.
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Working Paper (Numbered Series) 67610 MAR 01, 2012
Almeida, Rita; Arbelaez, Juliana; Honorati, Maddalena; Kuddo, Arvo; Lohmann, Tanja; Ovadiya, Mirey; Pop, Lucian; Puerta, Maria Laura Sanchez; Weber, MichaelDisclosed
This note reviews recent World Bank experience with projects using results-based lending in Social Protection and Labor (SP&L) in preparation for stepped-up engagement under the proposed Program-for-Results (P4R).
... See More + The P4R is expected to be launched in 2012. Given the already strong use of P4R-type approaches in SP&L, the portfolio focus on sectoral reform as shown from the SP&L results readiness review, and the emphasis on SP&L systems in the new SP&L Strategy, this type of lending instrument is likely to be in high demand by SP&L clients. This note is intended as a resource for task teams in SP&L interested in a quick update on results-based lending in the sector and features two case studies: the Bangladesh Employment Generation Program for the Poorest Project and the Romania Social Assistance System Modernization Project.
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Labor allocation to its most efficient use, promoting employment and human capital investment as well as functioning labor markets can contribute to long?
... See More + term economic growth, poverty reduction and to help workers manage their risks. A labor market policy framework includes both regulations and programs. However, the optimal framework is not standard and universal but varies country by country depending on the level of economic and financial development, culture and other structural characteristics. Labor market projects are equally concentrated in Latin America and the Caribbean and Eastern Europe and Central Asia regions and one is China. Interestingly, the number of projects having 'improving labor market' as the primary component has increased over time. All project development objectives in the cohort of projects reviewed focus on promoting higher employment and increasing economic opportunities as the main objective especially via training programs. About half of the projects also seek to reach specific vulnerable groups by improving targeting mechanisms and to improve the quality of social assistance services by reducing the cost of job search through access to enhanced employment services and by improving employability.
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Working Paper (Numbered Series) 60080 FEB 01, 2011
The main focus of the social protection and labor portfolio is on strengthening client's institutional capacity in the design and implementation of programs, but projects are not well equipped to track progress in this area.
... See More + Correspondingly, there is a need to strengthen approaches to measuring and monitoring a 'missing middle' of service delivery, precisely those areas for which counterpart institutions are responsible during the course of a project. In particular, better measures of the primary functions of social protection and labor agencies are needed, such as identifying and enrolling beneficiaries, targeting, payment systems, fraud and error control, performance monitoring of service delivery providers, responsiveness to citizens, transparency, efficiency, management information systems and monitoring and evaluation systems. New World Bank initiatives particularly standard core indicators by sector and the introduction of results based investment lending call for substantial improvements in the use of monitoring and evaluation (M&E). Impact evaluations are included in about half of projects and should continue to be used selectively and strategically, particularly when the program is innovative, replicable and/ or scalable to reach a broader set of beneficiaries, addresses a knowledge gap and is likely to have a substantial policy impact. Structuring evaluations around core themes with common outcome measures is fundamental to building a global knowledge base on development effectiveness.
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Working Paper (Numbered Series) 60084 FEB 01, 2011
The authors use firm-level, cross-county data from Investment Climate surveys in 49 developing countries to investigate an important channel through which informality can affect productivity: access to credit and external finance.
... See More + Informality is measured as self-reported lack of tax compliance in a sample of registered firms that also answered questions on a large set of other characteristics. The authors find that more tax compliance is significantly associated with more access to credit both in OLS and in country fixed effects estimates. In particular, the link between credit and formality is stronger in high-formality countries. This suggests that firms' balance sheets are relatively more informative for financial institutions in environments where signal extraction is a less noisy process. The authors' results are robust to the inclusion of a wide array of correlates and to two-stage estimation.
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Policy Research Working Paper WPS4476 JAN 01, 2008
This paper estimates a structural dynamic business investment equation and an error correction model of fixed assets growth on a sample of predominantly small and mid-size manufacturers in India.
... See More + The results suggest that excessive labor regulation, power shortages, and problems of access to finance are all significant factors in industrial growth in the country. The estimated effects of labor regulation, power shortages and access to finance on the rate of business investment all vary by states' levels of industrial development and. Perhaps more importantly, they also depend on a fourth institutional factor, namely, corruption. The rate of fixed investment is significantly lower where power shortages are more severe and labor regulation is stronger over the full sample, but each of these impacts is also greater for businesses self-reportedly affected by corruption. Although access to finance does not seem to influence the rate of investment for most firms, there is evidence that investment decisions are constrained by cash flow in enterprises that are unaffected by corruption or power shortages. There are nuances to this story as we take into account regional specificity, but the key result always holds that labor regulation, power shortages and access to finance influence the rate of fixed investment in ways that depend on the incidence of corruption. In interpreting this finding, we would like to think of corruption as a proxy for the quality of property rights institutions in the sense of Acemoglu and Johnson (2005). On the other hand, we regard labor regulation and the financial environment of small businesses in India as instances of what Acemoglu and Johnson (2005) call 'contracting institutions'. The analysis finds that the interaction between corruption and other aspects of the institutional environment of fixed investment decisions could be seen consistent with the Acemoglu-Johnson view that the quality of property rights institutions exerts more abiding influence on economic outcomes than the quality of contracting institutions.
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Policy Research Working Paper WPS4356 SEP 01, 2007
This paper estimates a dynamic business growth equation on a sample of small-scale manufacturers. The results suggest that excessive labor regulation, power shortages, and problems of access to finance are significant influences on industrial growth in India.
... See More + The expected annual sales growth rate of an enterprise is lower where labor regulation is greater, power shortages are more severe, and cash flow constraints are stronger. The effects of each of the three factors on business growth seem also to depend on a fourth element, namely, corruption. Specifically, labor regulation affects the growth only of enterprises for which corruption is not a factor in business decisions. By contrast, power shortages seem to be a drag on the growth only of enterprises self-reportedly held back by corruption. Lastly, sales growth is constrained by cash flow only in businesses that are not affected by labor regulation, power shortages, or corruption. The analysis uses corruption as a proxy for the quality of "property rights institutions" and considers labor regulation and small business financing as instances of "contracting institutions." The findings on the interaction between corruption and other aspects of business environment then seems to indicate that the quality of property rights institutions exerts more abiding influence on economic outcomes than the quality of contracting institutions. Moreover, there might also be a hierarchy among contracting institutions in their effect on manufacturing growth.
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Policy Research Working Paper WPS4338 AUG 01, 2007
