The broken link in structural transformation: Jobless development
https://cepr.org/voxeu/columns/broken-link-structural-transformation-jobless-development
Persistent differences in per capita incomes are usually attributed to productivity differentials. But countries also converge to widely different employment-to-population ratios. This column shows that in fact higher productivity growth in emerging market and developing economies tends to be associated with declines in the employment-to-population ratio (‘jobless development’). Convergence towards low steady-state employment ratios appears to reflect a broken link in structural transformation caused by weak job creation in the non-agricultural sector.
https://cepr.org/voxeu/columns/broken-link-structural-transformation-jobless-development
Persistent differences in per capita incomes are usually attributed to productivity differentials. But countries also converge to widely different employment-to-population ratios. This column shows that in fact higher productivity growth in emerging market and developing economies tends to be associated with declines in the employment-to-population ratio (‘jobless development’). Convergence towards low steady-state employment ratios appears to reflect a broken link in structural transformation caused by weak job creation in the non-agricultural sector.
Related:
Are we worried about the wrong demographic problem? By Vivekanand Jayakumar
“… recent entrants to the catch-up growth process, which includes many nations in South Asia and Africa, are discovering that they are well and truly late to the party. In the past, moving tens of millions from rural and agrarian settings to urban and industrial environments allowed workers with even relatively limited formal education to work with tools in factory settings and generate decent productivity growth. This enabled them to achieve sufficient income gains to be able to join the middle class. The curse of premature deindustrialization and the rapid automation of various tasks has meant that the traditional manufacturing-led pathway to growing and establishing a middle class has largely disappeared.
As Africa and South Asia undergo a demographic transition, they are experiencing an extraordinary youth bulge. The median age in Sub-Saharan Africa is just under 20 years. To truly benefit from this trend and attain a demographic dividend, countries need to find productive employment for tens of millions of new job market entrants each year. Even India, the world’s fastest growing major economy, is struggling to generate the 10-12 million new jobs per year necessary to prevent the demographic dividend from turning into a demographic curse”.
As Africa and South Asia undergo a demographic transition, they are experiencing an extraordinary youth bulge. The median age in Sub-Saharan Africa is just under 20 years. To truly benefit from this trend and attain a demographic dividend, countries need to find productive employment for tens of millions of new job market entrants each year. Even India, the world’s fastest growing major economy, is struggling to generate the 10-12 million new jobs per year necessary to prevent the demographic dividend from turning into a demographic curse”.