Guide to Growth, Employment and Productivity Analysis I. BACKGROUND

Because of these links, job creation, and increasing the job intensity of growth, tends to take priority on policy makers agenda. Indeed, “job-less growth” is often seen as a major concern and has been blamed for slow progress on poverty reduction in many countries. However, there are two problems with focusing only on job creation and growth. First, many developing countries face rapidly growing work forces which may parallel or outpace high job creation. High job creation can thus be consistent with worsening unemployment. Second and more importantly, developing country labor markets are not lacking in jobs per se, but in jobs which offer higher earnings. Applying this logic to the dynamic analysis, it follows that mere job creation will not be sufficient to improve the lot of the poorest workers and their families. Poverty improvements require instead (i) an increase in the share of jobs with higher earnings and destruction of low earning jobs (ii) that the poor can access jobs which offer higher earnings.