Fourth Luca d’Agliano Lecture in Development Economics

Fourth Luca d’Agliano Lecture in Development Economics: “Employment and Development” by François Bourguignon (Chief Economist and Senior Vice President, World Bank; Professor of Economics, Ecole des Hautes Etudes en Sciences Sociales, Paris), 22 May 2006, 11 a.m. Fondazione Luigi Einaudi, Palazzo d’Azeglio, Via Principe Amedeo 34, 10123 Turin.

How to create more and better jobs so as to eradicate poverty has been a key issue for policy makers around the world for a long time. Sustainable growth is essential to create more productive and rewarding jobs. But growth-enhancing reforms may also lead to greater inequalities: unskilled workers without training are less likely to get “good” jobs, and in countries lacking minimum forms of safety nets workers tend to be fully exposed to the cost of greater labor mobility. In this context, a recent report by the World Commission on the Social Dimension of Globalization (2004) called policy makers in developing countries – as well as donors and international organizations – to put employment at the center of their development strategy. Any strategy to promote better labor market outcomes should start with a diagnosis of current labor market conditions, and how these conditions have evolved in countries that have undergone major structural and policy changes. It turns out that standard indicators used in developed countries, and in particular those related to unemployment, often are inappropriate in developing countries. Most workers cannot afford to be unemployed and may well be engaged in full-time employment, while remaining in poverty (working poor). This may be because they lack adequate skills, or because they cannot afford to search for good jobs, or because they live in areas where there is a shortage of good jobs and have difficulty in moving to other areas. A more complete set of labor market diagnostics needs to be developed in order to assess labor market performance and to identify worse-off groups of workers so as to design effective policies to improve their welfare. This lecture discusses possible options to characterize labor market vulnerability, using existing statistical information. It draws on household survey data in a small sample of developing and emerging economies over the past decade to characterize labor-market performances. In particular, it examines the “quality” of jobs that different work  ers have access to, quality being defined by: i) the type of labor contract (written, with provision of social security  benefits, informal, etc.), ii) working conditions; and iii) the level of earnings. It then tries to relate these performances to the structure of the economy, labor-market regulation and the macro-economic evolution of the country. Finally, it evaluates the implication of labor-market performances for poverty, by focusing on the issue of the “working poor” and its link with the actual poverty observed at the household level.

François Bourguignon is Chief Economist and Senior Vice President for Development Economics at the World Bank and Professor of Economics at the Ecole des Hautes Etudes en Sciences Sociales (EHESS) in Paris. His main areas of interest focus on income distribution, inequality and poverty measurement, economic development and redistribution systems. Since his appointment at the World Bank in 2003, he has mainly directed his attention on problems related to economic growth and its relationship with inequalities and on the evaluation of the development impact of programs and policies. Whilst at EHESS, from which he has been on leave since 2003, he funded and directed the Département et Laboratoire d’Economie Théorique et Appliquée (DELTA). FB has published widely, both in books and in economic journals such as the American economic Review, review of economic Studies and Journal of Development Economics and now edits the World Bank Economic Review. He is the recipient of a number of important honors (silver medal for academic achievements from the French National Centre for Scientific Research, doctor ex-honoris causa, Université du Québec, Montréal). He is now also a Fellow of the Econometric Society.