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<br /> IFC JOBS STUDY<br /> ASSESSING PRIVATE SECTOR CONTRIBUTIONS<br /> TO JOB CREATION AND POVERTY REDUCTION<br /> SUMMARY JANUARY 2013 <br /> <br /> m<br /> r<br /> Why jobs matter<br /> High levels of unemployment, especially among youth, and large<br /> numbers of low-quality jobs are problems in developing countries<br /> around the world, and therefore creating more and better jobs is<br /> an urgent priority. Jobs are much more than monetary income;<br /> they are the cornerstone of development. Jobs boost living stan-<br /> dards, raise productivity, and foster social cohesion, and they are<br /> the main path out of poverty.<br /> Currently 200 million people are unemployed globally, and the un-<br /> employment rate for youth is more than 2.5 times higher than that<br /> of adults. By 2020, 600 million jobs must be created in developing<br /> countries—mainly in Africa and Asia—just to accommodate young<br /> people entering the workforc<a title="IFC_Job Study Report_REVISED_7-30-13 page 1" href="http://viewer.zmags.com/publication/bd86b1fd?page=1"> IFC JOBS STUDY ASSESSING PRIVATE SECTOR CONTRIBU</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 2" href="http://viewer.zmags.com/publication/bd86b1fd?page=2"> m r Why jobs matter High levels</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 3" href="http://viewer.zmags.com/publication/bd86b1fd?page=3"> Preface This report is the result of an open-sou</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 4" href="http://viewer.zmags.com/publication/bd86b1fd?page=4"> agribusiness sectors. Mahima Khanna and Govinda T</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 5" href="http://viewer.zmags.com/publication/bd86b1fd?page=5"> Message from Jin-Yong Cai, IFC Executive Vice Pre</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 6" href="http://viewer.zmags.com/publication/bd86b1fd?page=6"> Specific needs in specific regions The nature of th</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 7" href="http://viewer.zmags.com/publication/bd86b1fd?page=7"> What kind of firms create the most jobs and where?</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 8" href="http://viewer.zmags.com/publication/bd86b1fd?page=8"> Figure 3: Larger businesses pay higher wages </a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 9" href="http://viewer.zmags.com/publication/bd86b1fd?page=9"> Figure 4: Majority of companies are born small an</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 10" href="http://viewer.zmags.com/publication/bd86b1fd?page=10"> Figure 5: A large fraction of companies achieve b</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 11" href="http://viewer.zmags.com/publication/bd86b1fd?page=11"> </a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 12" href="http://viewer.zmags.com/publication/bd86b1fd?page=12"> Figure 6: There can be a trade-off between the nu</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 13" href="http://viewer.zmags.com/publication/bd86b1fd?page=13"> Figure 7: Investment climate problems add up to t</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 14" href="http://viewer.zmags.com/publication/bd86b1fd?page=14"> Investment climate reforms can help generate jobs</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 15" href="http://viewer.zmags.com/publication/bd86b1fd?page=15"> Another aspect to consider while assessing job cr</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 16" href="http://viewer.zmags.com/publication/bd86b1fd?page=16"> Tax rates, foreign direct investment, and investm</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 17" href="http://viewer.zmags.com/publication/bd86b1fd?page=17"> unemployment and underemployment.42 It is estimat</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 18" href="http://viewer.zmags.com/publication/bd86b1fd?page=18"> Figure 9: Informal employment is positively assoc</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 19" href="http://viewer.zmags.com/publication/bd86b1fd?page=19"> Access to infrastructure is crucial for women’s e</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 20" href="http://viewer.zmags.com/publication/bd86b1fd?page=20"> frastructure has an even greater effect on employ</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 21" href="http://viewer.zmags.com/publication/bd86b1fd?page=21"> rect jobs in the short run, but new investments b</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 22" href="http://viewer.zmags.com/publication/bd86b1fd?page=22"> Access to finance Lack of access to finance is a ke</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 23" href="http://viewer.zmags.com/publication/bd86b1fd?page=23"> not cover their funding needs. Alternative extern</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 24" href="http://viewer.zmags.com/publication/bd86b1fd?page=24"> The link between access to finance and job creatio</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 25" href="http://viewer.zmags.com/publication/bd86b1fd?page=25"> Case studies fro</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 26" href="http://viewer.zmags.com/publication/bd86b1fd?page=26"> Measures that can improve access to finance The in</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 27" href="http://viewer.zmags.com/publication/bd86b1fd?page=27"> Shortage of skills is a major constraint The lack</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 28" href="http://viewer.zmags.com/publication/bd86b1fd?page=28"> Small companies, low-income countries invest </a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 29" href="http://viewer.zmags.com/publication/bd86b1fd?page=29"> Investing in training, innovation, and technology</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 30" href="http://viewer.zmags.com/publication/bd86b1fd?page=30"> Clusters and other alternatives in training provi</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 31" href="http://viewer.zmags.com/publication/bd86b1fd?page=31"> In the agricultural sector, increased access to p</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 32" href="http://viewer.zmags.com/publication/bd86b1fd?page=32"> Figure 16: When there is greater legal differenti</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 33" href="http://viewer.zmags.com/publication/bd86b1fd?page=33"> Quality of jobs matters It is not just the number</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 34" href="http://viewer.zmags.com/publication/bd86b1fd?page=34"> The Equator Principles The Equator Principles, wh</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 35" href="http://viewer.zmags.com/publication/bd86b1fd?page=35"> The most effective interventions to support compl</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 36" href="http://viewer.zmags.com/publication/bd86b1fd?page=36"> development of financial infrastructu</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 37" href="http://viewer.zmags.com/publication/bd86b1fd?page=37"> Using a “job lens” in country and regional strate</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 38" href="http://viewer.zmags.com/publication/bd86b1fd?page=38"> References 1 See MILES Framework for more </a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 39" href="http://viewer.zmags.com/publication/bd86b1fd?page=39"> 46 World Bank and IFC (2012). Spotlight on T</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 40" href="http://viewer.zmags.com/publication/bd86b1fd?page=40"> References 94 Rubayat (2009). 95 IFC </a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 41" href="http://viewer.zmags.com/publication/bd86b1fd?page=41"> 141 Tae-hoon (2010). 142 Turkey’s State Pla</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 42" href="http://viewer.zmags.com/publication/bd86b1fd?page=42"> Statement by Members of the IFC Jobs Study </a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 43" href="http://viewer.zmags.com/publication/bd86b1fd?page=43"> Contact Us Headquarters Washington, D.C. IFC Corp</a> <a title="IFC_Job Study Report_REVISED_7-30-13 page 44" href="http://viewer.zmags.com/publication/bd86b1fd?page=44"> International Finance Corporation • 2121 Pennsylv</a>