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University of Southampton: Duncan Campbell, 'Labour Markets in Developing Countries' UN World Day of Social Justice

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University of Southampton: Duncan Campbell, 'Labour Markets in Developing Countries' UN World Day of Social Justice

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The University of Southampton celebrated the UN World Day of Social Justice with a special afternoon seminar on ‘Labour markets in developing countries: what’s new, what’s old?’ by Duncan C. Campbell, Director for Policy Planning in Employment at the International Labour Office (ILO).

The University of Southampton celebrated the UN World Day of Social Justice with a special afternoon seminar on ‘Labour markets in developing countries: what’s new, what’s old?’ by Duncan C. Campbell, Director for Policy Planning in Employment at the International Labour Office (ILO).

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University of Southampton: Duncan Campbell, 'Labour Markets in Developing Countries' UN World Day of Social Justice

  1. 1. UN World Day of Social Justice 20 February 2013 The Labour markets in developing countries: what's new, what's old? By, Duncan C. Campbell, Director for Policy Planning in Employment International Labour Organization Multidisciplinary Research Seminar Series, jointly organised by the Work Futures Research Centre and Sustainability Science at Southampton USRGs
  2. 2. first topic: « developing country? » « emerging economy? »
  3. 3. definitionally…  using World Bank groupings based on GNI per capita, i.e. low income, middle-low income, middle- high income, high income. a labour market discussion of each is warranted !  « emerging », as defined by Antoine van Agtmael (IFC)  Embarked on economic development and reforms  Have begun to open their markets and « emerge »  Fast-growing economies, in relative terms
  4. 4. Divergence in trend growth percentage change 7 6 5 Developing countries 4 3 Hi-income countries 2 1 0 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 Source: World Bank
  5. 5. Latin America Middle East / Africa Asia / Oceania 2009 1969 USA EU 15 0 10 20 30 40 % share of global output by region
  6. 6. second topic: the stylized components of « dualism »
  7. 7. a first distinction between « employment- led » and « growth-led » demand for labour much economic activity in developing countries is the search for demand creation rather than demand derived from product markets
  8. 8. The “Dual Economy” is divided into a “traditional” and a “modern” economy The “traditional” Economy The “Modern” Economy is relatively more … informal Formal Vulnerable in employment status Likely to have a higher share of wage-earners Rural Urban Likely to be less productive Likely to more productive Credit-insufficient Access to credit Likely to have a low capital-to-labour ratio Likely to have a higher capital-to-labour ratio Oriented to domestic, even local markets Oriented to domestic and international markets Sheltered from the impact of macroeconomic Exposed to macroeconomic policies policies Deficient in the quality of jobs Deficient in the quantity of jobs Likely to be less or un-protected Likely to have at least de jure protection Prone to greater earnings instability Stable and predictable in earnings and income
  9. 9. third topic: demographics in relation to labour surplus and poverty
  10. 10. fourth topic: informality
  11. 11. discussion of informality has its own chapter. that said ….  ILO (2002) definition of informality  an (OECD) « informal is normal » stance  Africa: 80 % of non-agricultural work is informal – 90 % of all new jobs over the past decade  in the last decade, the informal share of employment increased in all of the seven most populous developing countries
  12. 12. fifth topic: Agriculture
  13. 13. beyond the income-related definition, a developing country is also defined by the significance of agriculture  it is also where poverty is concentrated.  the implication is that, to understand labour markets in developing countries, one needs to understand agriculturally based labour markets
  14. 14. In agriculturally based economies, the weather and growth are more firmly bound, so are commodity prices and macroeconomic stability
  15. 15. sixth topic: status in employment varies greatly between developed and developing countries
  16. 16. a typology of status in employment  paid employment is a developed-country phenomenon, except at its lowest end (casual wage labour by the rural landless)  self-employment, with a significant share being « survivalist » is a developing-country phenomenon  various forms of unpaid work, and non-market work, are developing-country characteristics
  17. 17. seventh topic: the Lewisian view of development and structural transformation
  18. 18. some basic assumptions  declining share of agriculture in employment and output. largely true, but hardly linear  growth of the industrial sector with development. largely true, but not everywhere, e.g. deindustrialization in LDCs, the as yet unfulfilled China export-labour bonus foreseen by the World Bank  a large service sector is for the wealthy countries. true and false.
  19. 19. eighth topic: human capital and development
  20. 20. human capital is a subject in its own right in this volume  the chapter and the volume note praiseworthy gains in the breadth and depth of school enrolment  the chapter notes the disparity between the quantity and the quality of education  the chapter argues that economic diversification and HK go hand-in-hand, and are « dually causal »
  21. 21. 50 Agriculture, value added (% of GDP) y = -8.92ln(x) + 43.876 R² = 0.457 40 30 20 10 0 0 20 40 60 80 100 Share of workers with secondary education or above (% of total labour force)
  22. 22. What’s new?
  23. 23. The first is, structural change is not happening fast enough, and it has stalled with the Great Recession
  24. 24. This means that the share of those in « vulnerable » employment has not diminished enough – still a majority of the world’s workforce. « Vulnerability » captures those least likely to have social protection Social protection, since the UN Declaration of the 1940s, is defined as a human right
  25. 25. A lot of culprits, but investment shortfall is a major one 0.6 0.8 Contribution of structural change to growth Contribution of structural change to growth 0.7 0.5 0.6 (in percentage points) (in percentage points) 0.5 0.4 0.4 0.3 0.3 0.2 Low Medium High Low Medium High Average investment (% of GDP), Average investment growth, 1999-2011 1999-2011
  26. 26. That is the downside of structural change on human rights in this World Day for Social Justice. There is an upside as well – the growth of the global middle class
  27. 27. Divergence in trend growth percentage change 7 6 5 Developing countries 4 3 Hi-income countries 2 1 0 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 Source: World Bank
  28. 28. The middle class ($4-$13 ppp) per day is growing in the developing world 2,700,000 2,400,000 Above middle class Employment by economic class (thousands) 2,100,000 1,800,000 Middle class 1,500,000 Near poor 1,200,000 Moderately poor 900,000 600,000 Extremely poor 300,000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  29. 29. What do we know about the middle class and human rights ?  The middle class likes to assert rights – think of it as human rights as conservation of economic gain  Inequality is an enemy. A quick look at this
  30. 30. Inequality will matter, but no time to discuss today ….
  31. 31. Middle class means assertion, ultimately, of rights and of the right to maintain them: these concluding points are empirical  For government accountability, the larger the size of the middle class, the greater is the demand for democratic accountability and participation, transparency, and for curbing corruption.  For labour markets, depending on its relative rate of growth, a rising middle class augurs well for a greater share of paid employment and a decline in the work that ILO defines as “vulnerable”.  Finally, for social values, a rising middle class implies a shift in these toward stability and criteria of fairness
  32. 32. many thanks
  33. 33. Video Case Studies 1. Trade Unions Help Migrant Workers Realise Labour Rights in Thailand (ILO)Thailand- http://www.youtube.com/watch?v=cXTh7Z5NCSc&list=UUrlcu5KChYyH wXlIeD7oLUg&index=11 2. Increases in child labour over past four years a worrying trend, ILO http://www.youtube.com/watch?v=2z5YpSDuVVU&list=UUrlcu5K ChYyHwXlIeD7oLUg&index=27 3. Youth unemployment in Greece (CD link).

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