Journal Article

IDS Bulletin Vol. 39 Nos. 2

The Goal of Decent Work

Published on 1 May 2008

The importance of employment as a development goal is widely recognised. ‘Employment-intensive’ or ‘employment-rich’ growth paths can, in principle at least, be a means to ensure that income opportunities are widely distributed, contribute to the effective use of each society’s human potential and provide avenues for participation in both social and economic life.

Employment creation is a sustainable means for poverty reduction and a central concern throughout society. At election time, employment creation figures strongly in the political platforms of candidates of all persuasions. The UN Declaration of Human Rights states that ‘Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment’.

But employment is diverse. Work takes many forms, dependent and independent, creative and dull, wellpaid or badly paid, productive or unproductive, regulated or informal. Full employment economies might consist largely of low productivity survival activities; may involve forced labour; or may be the result of employment guarantees without a productive counterpart. The validity of a full employment goal clearly depends on the nature of the employment involved.

The process of employment creation is also equally diverse. Much employment creation is obviously driven by output growth and the consequent expanding demand for labour. But supply factors always play a role, ranging from the development – by individuals or societies – of the skills and capabilities needed to participate effectively in the production system, to the constant creation or capture of income earning activities by the actors of the low productivity informal economy. Employment growth also depends on access to complementary factors of production – land and natural resources, knowledge and technology, capital – and on the varied ways in which these factors can be combined with labour. There are many routes to employment creation, not all equally desirable.

The employment goal is often summarised in aggregate terms, either as a high overall employment elasticity, or a low unemployment rate. But the foregoing suggests that this may well be misleading. A high employment elasticity, which is associated with the creation of good jobs through expanding production, means something quite different from one which results from a search for survival incomes.

There is also another fundamental problem. An employment elasticity which is too low to absorb a growing labour force must imply constantly growing unemployment. But while short-term changes in open unemployment do of course occur, structural factors set limits to the possible growth of unemployment in the longer term. The need for income forces the unemployed to seek alternative income sources, usually in informal work of one sort or another. Where such mechanisms fail, and unemployment reaches very high levels, ultimately the outcome is social and political crisis or economic breakdown. But in most developing economies, the adjustment occurs through underemployment in low productivity self-employment and casual work, and variations in unemployment are limited. It follows that at the aggregate level, and in the medium term, the observed aggregate employment elasticity mainly depends on the relative rates of growth of output and the labour force, rather than on a technical relationship between production and labour use.

The growth of the labour force may depend to some extent on output growth, if for instance high output growth induces increased labour force participation or in-migration. But in the medium term, the growth of the labour force depends much more on demographic factors than on output. As a result, countries with high rates of output growth tend to have low measured employment elasticities, as is the case for China, for example, with an estimated employment elasticity of 0.14–0.17 over the period 1991–2003 (ILO 2006a). Countries with low rates of economic growth, such as much of Latin America since the early 1980s, have high measured employment elasticities simply because labour force growth is mainly absorbed in the growing informal economy or in survival activities rather than in open unemployment (ILO 2006b).

To get past this difficulty with aggregate measures, employment goals have to be broken down in some way, if they are to be meaningful as a development objective. An employment goal which does not distinguish between different forms of work is clearly not sufficient.

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This article comes from the IDS Bulletin 39.2 (2008) The Goal of Decent Work

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Rodgers, G. (2008) The Goal of Decent Work. IDS Bulletin 39(2): 63-68

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Gerry Rodgers

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Institute of Development Studies
Rodgers, Gerry