Publication: Diagnosing the Binding Constraints to Better Jobs: An Approach and Framework
Date
2023-05-16
ISSN
Published
2023-05-16
Author(s)
Osborne, Theresa
Abstract
The persistent lack of good jobs that
is, an inadequate level or quality of jobs, inefficient
and/or inequitable jobs outcomes is a key economic issue in
developing (and some developed) economies. Yet policy
responses often lack an understanding of the causes. While
the proximate drivers, such as low productivity growth, slow
capital deepening, or a lack of firms and other organized
economic actors, may share patterns, the policy roots and
circumstances of these outcomes vary a great deal by
country. Thus, making progress in a meaningful and lasting
way requires, in the first instance, a clear understanding
of the binding constraints which, if alleviated, would
result in a substantial structural improvement to jobs
outcomes. Binding constraints could arise in a host of
policies and institutions, including possibly inadequate
human capital and labor market policies but also in
infrastructure, regulatory, financial, judicial and other
areas. This paper provides a data-driven approach and
framework for diagnosing the truly binding constraints to
better jobs. The approach is to rule out broad categories of
constraints using economic logic and data, and to utilize an
array of empirical indicators to test whether remaining
candidate constraints are binding. While this paper outlines
an exhaustive approach, the style of thinking and techniques
can also be applied selectively to fill analytical gaps and
ensure that key issues are not left unaddressed.
Citation
“Osborne, Theresa. 2023. Diagnosing the Binding Constraints to Better Jobs: An Approach and Framework. Jobs Guide; Issue 7. © World Bank, Washington, DC. http://hdl.handle.net/10986/39818 License: CC BY 3.0 IGO.”