Search

The labor force in Liberia is quite young. Youth aged 15 to 34 constitute over a third of thepopulation in Liberia and are somewhat concentrated in urban areas, according to the 2008census. These youth represent both a demographic dividend and a concern. The educational attainment of Liberian youth is steadily improving but remains low on average.Youth recognize that their lack of skills and experience are impediments to employment.The objective of this report is to assess youth skills development in Liberia.Given the composition of Liberia’s economy and the concentration of the labor force outside formal employment, this report has a particular focus on skill development in vocational trades and the informal sector. This report comprises three analyses. Section Two constructs a profile of Liberian youth from existing administrative data are studied to enable a more detailed understanding of the current skill levels among working youth. Section Three first assesses skills development providers based on new survey data summarizes the results of original analysis carried out on data collected on a sample of 139 skill providers’ training offerings, capacity, target beneficiaries, and other criteria. Next section three goes on to present young trainees’ perceptions of skills development opportunities and limits, based on 354 interviews with recent trainees. This report contributes to the Government of Liberia’s Agenda for Transformation (AfT) and the World Bank’s Country Partnership Strategy (CPS) 2013-2017. Both recognize that inadequate skills and vulnerable employment are key constrictions on rapid, inclusive and sustainable growth.This report provides practical recommendations that align with pillars of the National Technical and Vocational Education and Training (TVET) Policy 2015-2020. This report makes recommendations specific to three pillars: promoting productivity in the agricultural sector through TVET, promoting productivity in the informal sector through TVET, and financing TVET.

Inadequacies in Tanzania's education and training systems compromise the quality of workforce skills, giving rise to skill shortages, and constraining the operations and growth of formal sector firms in the country. This study addressed these concerns using data from a unique Enterprise Skills Survey that asked Tanzanian employers about the education, training, and occupational mix of their workforce, the skill gaps in cognitive, noncognitive, and job-specific competencies affecting their operations, and the strategies they are using to overcome these skill gaps. The study investigates the consequences for firm productivity of employers' choices about their optimal skills mix, and their strategies to mitigate shortfalls in skills supply. Compared with noninnovators and firms primarily serving the domestic market, exporters and innovators face greater skill demand and suffer from skill shortages that are more likely to constrain their operations in such areas as quality assurance, use of new technology, and introducing new products and services. In analyzing firm performance and its relation to skill mix, the study found that firms with higher shares of tertiary-educated workers are more productive; it found no impact, however, from secondary education and technical vocational education and training qualifications, possibly reflecting the universally acknowledged poor quality of secondary education in Tanzania. Employers use a range of strategies to address skill deficiencies, from hiring new workers, to training current workers in-house or externally, using high-skill expatriate workers, or outsourcing professional services. Almost all were associated with higher labor productivity. The exception, employer provided in-house training, had no measurable impact on productivity.

Matching grants are one of the most common types of private sector development programs used in developing countries. But government subsidies to private firms can be controversial. A key question is that of additionality: do these programs get firms to undertake innovative activities that they would not otherwise do, or merely subsidize activities that will take place anyway? Randomized controlled trials can provide the counterfactual needed to answer this question, but efforts to experiment with matching grant programs have often failed. This paper uses a randomized controlled trial of a matching grant program for firms in the Republic of Yemen to demonstrate the feasibility of conducting experiments with well-designed programs, and to measure the additionality impact. In the first year, the matching grant is found to have led to more product innovation, firms upgrading their accounting systems, marketing more, making more capital investments, and being more likely to report their sales grew.

Matching grants are one of the most common types of private sector development programs used in developing countries. But government subsidies to private firms can be controversial. A key question is that of additionality: do these programs get firms to undertake innovative activities that they would not otherwise do, or merely subsidize activities that would take place anyway? Randomized controlled trials can provide the counterfactual needed to answer this question, but efforts to experiment with matching grant programs have often failed. This paper uses a randomized controlled trial of a matching grant program for firms in the Republic of Yemen to demonstrate the feasibility of conducting experiments with well-designed programs, and to measure the additionality impact. In the first year, the matching grant is found to have led to more product innovation, firms upgrading their accounting systems, marketing more, making more capital investments, and being more likely to report their sales grew.

Growing research and policy interest focuses on the misallocation of output and factors of production in developing economies. This paper considers the possible misallocation of financial loans. Using plant-level data on the organized and unorganized sectors, the paper describes the temporal, geographic, and industry distributions of financial loans. The focus of the analysis is the hypothesis that land misallocation might be an important determinant of financial misallocation (for example, because of the role of land as collateral against loans). Using district-industry variations, the analysis finds evidence to support this hypothesis, although it does not find a total reduction in the intensity of financial loans or those being given to new entrants. The analysis also considers differences by gender of business owners and workers in firms. Although potential early gaps for businesses with substantial female employment have disappeared in the organized sector, a sizeable and persistent gap remains in the unorganized sector.

Mauritius is a high middle-income country with low levels of poverty and inequality. The headcount poverty level was 6.9 percent in 2012; measured by the international standard of United States (U.S.) $2 per day (PPP), poverty was less than 1 percent. On inequality, Mauritius also fared well compared to its peer middle-income countries. On the negative side, Mauritius’ growth has not been equally shared, despite the general improvement in welfare. The economy’s polarization was associated with a structural transformation from labor-intensive industries to services and knowledge-intensive industries. Inclusiveness remains the main challenge for the current growth pattern. When Mauritius will be able to become a high-income country will depend on its ability to improve the labor force’s skill set, develop infrastructure, and further improve the business environment to attract foreign direct investment (FDI) and generate domestic investment. Reduction in inequality and boost of shared prosperity will require more growth and a more pro-poor pattern of growth. An increase in female labor force participation, reduction of high youth unemployment rates, improving the efficiency of the social protection system will reduce growing skills mismatch facilitating inclusive growth and eradicating poverty in Mauritius.

Economic growth in Sub-Saharan Africa (SSA) has averaged roughly 5 percent per year over the past decade, improving living standards and bolstering human development indicators across the continent. Stronger public institutions, a supportive, private sector focused policy environment, responsible macroeconomic management, and a sustained commitment to structural reforms have greatly expanded opportunities for countries in SSA to participate in global markets. In recent years, many countries in the region have benefited from an increasingly favorable external environment, high commodity prices, and an especially strong demand for natural resources by emerging economies, particularly China. Over the longer term, leveraging Chinese investment to support broad-based growth will require policies designed to boost the competitiveness of sectors in which China s economic rebalancing may create a comparative advantage for SSA. To date, few African countries have been able to benefit from large-scale Chinese investment outside the resource sector. However, as China s growth slows and its economy shifts toward a more consumption-driven model, it is likely that global demand for resource imports will slow as well. Countries with the most heavily concentrated export mix, particularly in the mineral and oil sectors are the most vulnerable to China s economic rebalancing and should be ready to adopt measures to mitigate the impact of negative terms-of-trade shocks. By contrast, as wage rates in China continue to rise and firms refocus their attention on domestic demand, countries in SSA will be well positioned to exploit emerging opportunities for investment in export-oriented manufacturing. Ethiopia provides an instructive example, as its inexpensive yet relatively skilled labor force, coupled with the government s proactive efforts to court Chinese investors, have enabled Ethiopia to attract substantial investments in labor-intensive industries. Infrastructure enhancement, workforce development, and good-governance reforms offer a promising strategy for many countries in the region. Although the establishment of industrial zones has yielded mixed results, several salient success stories warrant careful attention. This report discusses how Africa could take advantage of the untapped opportunities offered by China s progressively intensifying investment and trade ties with SSA. It is hoped that this analysis will enrich the ongoing dialogue between policy makers, private firms, and civil society regarding China s increasingly important role in the growth and development of Sub-Saharan Africa.

Chinese Foreign Direct Investment (FDI) into Africa is on the rise and Ethiopia is at the forefront of this trend. On request of the Government, the World Bank surveyed 69 Chinese enterprises doing business in Ethiopia with a 95-question survey in May/June 2012. The survey covered various aspects of the foreign direct investment climate in Ethiopia, including infrastructure, sales and supplies, land, crime, competition, finance, human resources, and questions about general opportunities and constraints for doing business in Ethiopia. This report summarizes the results of survey and provides policy suggestions in light of the analysis; the report also provides some broader background of the expected benefits of FDI into Ethiopia as well as current policies and approaches to promote incoming investment. Addressing identified obstacles could help Ethiopia to take better advantage of foreign investors in order to accelerate the shift from a predominantly low-productivity agriculture-based economy towards a higher-productivity manufacturing and export-based economy. Experiences in successful countries around the world, and especially East Asia show that foreign investment is instrumental to facilitate such a structural transformation and to maintain sustained and broad-based economic development. This study recommends five main areas for policy adjustments to facilitate foreign investors coming into Ethiopia: adjust customs clearance procedures and trade regulations; facilitate currency convertibility and increase transparency of the exchange rate policy; improve tax administration consistency and efficacy; execute impartial labor regulation; and increase the supply and quality of skilled workers.

Section one provides an economic update and assesses the challenges and near-term prospects facing the South African economy. In particular, it looks at the implications for South Africa of the resurgence of uncertainty in global financial markets, the surge in capital flows to safe-haven assets, the continuing Euro zone crisis, and signs of slowdown in some of the large emerging market economies. Section two focuses on inequality of opportunity in South Africa. For the first time, using innovative techniques, this section presents an analysis of the interlinked inequality of opportunities for children and for access to employment. Every society has a degree of inequality of outcomes that reflects differences in innate human capabilities, effort, education, experience, and skills. But a recognized goal for public policy is to ensure at least the equality of opportunity for every individual in a country. Many countries have used this new approach to develop targeted policies to promote such equality of opportunity and to monitor and evaluate the success of public programs.

For the purposes of this project, the East African countries included in the study were Kenya, Rwanda, Tanzania, and Uganda. The focus for this project was Small and Medium-sized Enterprises (SMEs) as for-profit or nonprofit organizations with less than 50 employees and not exceeding USD 1,000,000 in annual revenues/turnover. The main output of this project was a proposed program of interventions to drive transformational change. To succeed in this ambitious endeavor, the project articulated clear objectives and designed a blueprint for implementation including levels of resourcing, budget and monitoring metrics. Over the course of the project the team conducted brief surveys with over 90 entrepreneurs, over 50 percent of who had 3-10 years of experience in the Information and Communication Technology (ICT) sector and primarily worked at companies with 5 employees or less.

In 2007, the General Statistics Office (GSO) launched a joint research program with the French Institute of Research for Development (IRD), to measure and analyzes the informal sector in Vietnam. Two kinds of surveys were conducted in 2007: a national Labour Force Survey (LFS), which, in a first for Vietnam, classified labour by institutional sector, separating out the informal sector; two specific surveys, in Hanoi and Ho Chi Minh City (HCMC), which were grafted onto the LFS2007 to find out more about the characteristics of Household Businesses (HBs) in general and especially the informal sector. These surveys have been extensively analyzed, and the full results edited in a book. Two years later, this successful experience has been re-conducted, with the additional objectives to consolidate the methodology and to assess the impact of the global crisis on the labour market in general and the informal economy in particular. This paper presents the main findings (both methodological and analytical) of these two rounds of surveys as regards the informal sector in Hanoi and HCMC. In the context of the global crisis, it looks at the dynamics of the informal sector between 2007 and 2009. Taking advantage of this unique survey protocol, the first part investigates the macro dynamics comparing the two representative cross sections, while the second focuses on the micro dynamics drawn from the panel component. Transitions between formal and informal sector are explored. The third part aims at analyzing the perception of HBs' heads to assess the impact of the crisis. Then, the last section explores the changes as regards the problems faced by HBs, their interaction with the state and their outlook. In the conclusion, the author determines some of the implications of the findings in terms of economic policies. This report can be usefully complemented by two companion papers: the first one presents the adjustment of the labour market and the informal economy nationwide, based on the LFS2007 & 2009; the second one is a policy brief on the impact of the crisis on the informal sector in Hanoi and HCMC.

The study starts with a classification of the enterprises depending on their participation to the Vietnam social security. Among the enterprises that contribute, one striking feature is that on average the share in the wage bill of the contributions paid to the Vietnam social security is much lower than the contribution rate established in the law. Even if the enterprises that do not register their employees are excluded from the calculation, the average ratio is of 7.6 percent while the legal rate was in 2006 equal to 23 percent. The study, consequently, examine this issue before investigating the characteristics of the enterprises that do not register their employees. The paper shows that this low ratio is due to a wide practice by enterprises of paying contributions on lower wages than current wages. The paper investigates, furthermore, who benefit from the practice of avoiding registration and from the practice of under-reporting wages to social security. The results indicate strong evidence that employees in enterprises that are not registered to social security and in enterprises that under report wage receive higher net wages.

Since first recognized in the early 1970s, the informal sector of Sub?Saharan Africa has become a growing source of employment for large numbers of youths, but also older workers pursuing entrepreneurial goals and others adjusting to structural changes in the region's employment. Initially viewed as a safety net for those unable to find employment in the modern sector, the image of the informal sector has begun to change with time and the education of those entering it. More workers have begun to view it, not as a temporary stop while searching for employment in the formal wage economy, but as a preferred destination offering opportunities to those wanting to become entrepreneurs. The chapter examines recent research covering measurement of employment in the informal sector, impediments to investing in skills within the sector, and policies and programs to expand this investment. It extends earlier work on this topic done under auspices of the World Bank. The purpose is to examine what is currently known about these issues, identify gaps in knowledge, and offer a strategy for expanding skills development in the informal sector. Recent research, for example, like that mentioned above in Ghana showing the changing character of employment in the informal sector and the prospect of growing returns to skills casts a new light on employment in this sector and merits further inquiry into the robustness of these findings in other countries to deepen our understanding of how skills influence the welfare of those who create their own employment in the informal sector and how the investment in skills can be expanded.

In this paper, authors first review the literature on the relation between finance and growth. Theory provides ambiguous predictions concerning the question of whether financial development exerts a positive, causative impact on long-run economic growth. The second part of this paper reviews the literature on the historical and policy determinants of financial development. Governments play a central role in shaping the operation of financial systems and the degree to which large segments of the financial system have access to financial services. The authors discuss the relationship between financial sector policies and economic development. The remainder of the paper proceeds as follows. Sections one and two review theory and evidence on the relation between finance and growth. Section three turns to an examination of financial sector policies, and section four concludes.

Beginning in the late 1980s many developing countries turned to the private sector to provide basic infrastructure and utility services, such as highways, railroads, water, wastewater, electricity, gas, and telecommunications. Recent studies suggest that private involvement often benefited customers and reduced government fiscal problems without harming employees or enriching private providers excessively. There were enough high-profile failures, however, to discredit this reform in many quarters. Private involvement is likely to be more successful if it generates real efficiency gains rather than simply transferring costs among parties, if the systems of regulating the private companies are politically sensitive as well as technically competent, if the costs and constraints of private capital are not excessive, and if we are willing to adopt more modest and gradual schemes in difficult circumstances.