WORLD DEVELOPMENT REPORT 2019
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1 WORLD DEVELOPMENT REPORT 2019 THE CHANGING NATURE OF WORK Federica Saliola 2018 Global Youth Economic Opportunities Summit September 25, 2018
2 An Open Source and Transparent Process Weekly updated drafts: 350,000 downloads of the draft as of September 19, 2018 The Report will be published in October
3 The Forces of Automation and Innovation Will Shape Future Employment Source: Authors analyses. 2
4 What is Changing in the World of Work?
5 Technological change is making jobs more intensive in non-routine cognitive tasks High-skill workers are gaining low-skill workers are losing Percentage point changes in share of workers in each job type, Southern Europe Continental Europe Northern Europe CEE South CEE Continental Non-routine cognitive Routine cognitive Manual Source: Ridao-Cano and Bodewig (2018) CEE North
6 Advanced and Socioemotional Skills are Becoming more Important United States and Canada: 4,500 Genetic Counselors Master s degree in Genetics Relevant certification Empathy Critical-thinking skills Decision-making Communicate complex findings India: 4 million App Developers China: 100,000 Data Labelers Proficient in internet use, data processing, Microsoft suites Attention to detail Willing to learn Teamwork Degree in Computer Science Experience in programming languages and platforms Keep up-to-date with new technologies Work effectively as a team member Analytical, communication and interpersonal skills Source: Ormond et al. 2018; ifeng.com; Business Insider Intelligence, 2016; career websites.
7 In many developing countries, share of employment in high-skill occupations has increased Percentage Point 30 Changes in Employment Share by Occupation Skill Level (circa circa 2014) High-skill and low-skill occupations grew, but middle-skill fell High-skill occupations grew, but middleand low-skill fell High- and middle-skill occupations grew, but low-skill fell High-skill occupation Middle-skill occupation Low-skill occupation 6
8 Recent Technological Advances Accelerate Firm Growth Source: Authors analyses based on Walmart Annual Reports, Statista.com, NetEase.com 7
9 Technology Is Disrupting the Nature of Firms Posing New Policy Challenges New Superstar Firms: digital platforms operating globally, existing in the cloud Source: Author s calculation, based on data from Safaricom, KCB Bank Group, AirBnb, Marriot International Inc., Financial Times. 8
10 Technology is changing how people work and the terms on which they work LESS standard long-term contract MORE short-term work often via online work platforms BUT the numbers are still small: total freelancer population is 84 million, or less than 3 percent of the global labor force 9
11 Irrespective of Technological Progress, Markets in Emerging Economies Remain Largely Informal Source: Authors calculations using household and labor force survey data from the International Income Distribution Database. 10
12 What can Governments Do to Ensure Equitable Access to Opportunities?
13 Three areas for policy action: Human Capital and Lifelong Learning Social Protection and Labor Policies Revenue mobilization
14 Investing in Human Capital Is the Priority WBG Human Capital Index measures the human capital that a child born today can expect to attain by the end of secondary school. Source: Authors calculations 13
15 Source: World Bank staff calculations 14
16 Skills Re-adjustment are a matter of lifelong learning 15
17 Early Childhood Development Lays the Foundation Source: Authors calculations 16
18 Adult learning programs are often badly designed 17
19 The changing nature of work makes tertiary education more attractive 18
20 Stronger Social Protection: Protect People, Not Jobs Social Assistance (guaranteed social minimum) Social Insurance Labor Institutions Source: 2019 WDR team. 19
21 Social Inclusion Is Costly Simulated cost of UBI for closing the poverty gap by country income group (% of GDP) Source: Authors calculations based on World Bank World Development Indicators, World Bank PovcalNet, and United Nations World Population Prospects. 20
22 Little Expansion of Social Insurance Coverage over Time Source: Authors calculations based on World Bank pension database and World Development Indicators. 21
23 Complementing Strong Social Protection with Labor Market Flexibility Protection index High Low flexibility High protection NOR FIN NLDFRADEU AUT ISL 3 BEL 2 DNK High flexibility High protection MDA 1 PRT ITA HRV EST IRL KGZ CZE CYP POL SRBHUN LVA GRC LTU BLR BGR SMR0.20 RUS GEO ALB KAZ -1 AZE ARM Low flexibility Low protection Aspiring Low to flexicurity Low -2-3 Flexibility index High flexibility Low protection High Source: World Bank (2018); Ridao-Cano and Bodewig (2018)
24 Costing a New Social Contract Low-income countries would pay more than lower-middle income and uppermiddle-income countries for selected elements of a renewed social contract. Source: Authors calculations 23
25 Tax Revenues Have to Rise, Especially in Developing Economies Source: Authors calculations based on International Centre for Tax and Development (ICTD) and UNU-WIDER Government Revenue Dataset
26 25
27 APPENDIX 26
28 HUMAN CAPITAL INDEX: CALCULATION SURVIVAL Children who don t survive don t grow up to become future workers SCHOOL Contribution of qualityadjusted years of school to productivity of future workers HEALTH Contribution of health (average of adult survival rate and stunting) to productivity of future workers X X = Productivity of a future worker (relative to benchmark of complete education and full health) 27
29 Children from poor families are much less likely to have access to ECD programs Proportion of children aged 3-4 years in early education by wealth quintile of selected countries Source: Black et al. 2017, based on data obtained from UNICEF Multiple Indicator Cluster Survey 28
30 Definition 29
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