“The number of missing jobs is staggering.”

The Global Jobs Index reveals the massive gap between job seekers and decent jobs worldwide, especially in Africa where the population will add “an entire Europe every ten years.” Tobias Heidland highlights the urgent need for education, infrastructure, and job-friendly policies.

Tobias Heidland, what is the Global Jobs Index?

The Global Jobs Index shows the gap between people looking for jobs and available jobs across the world—going back to 2000 and projecting up to 2050. It answers a simple question: “How many jobs will the world need?” A large portion of the world’s population doesn’t have decent jobs. Instead, they either have very low incomes or must piece together their livelihood from various jobs. The index allows us to project this against population trends, particularly population growth in many developing countries, to show how large the gaps in available jobs actually are. We do not just count jobs, but we introduce two concepts: gig jobs and big jobs. A person with a Big Job earns at least two-thirds of the countries’ median income from just one job. Gig workers are above the (absolute) poverty threshold but may have to work multiple jobs. From these numbers and the number of workers in the country, we can create an estimate of the gap: The Global Jobs Gap, which tells us the number of missing jobs that allow a decent living.

Does the world need another index?

There is surprisingly little good data for the labour market in developing countries. Some key statistics we take for granted in industrialized countries cannot be interpreted in the same way. For example, unemployment rates in most countries outside the OECD are relatively meaningless. When there’s no proper unemployment insurance, there’s also no incentive to register as unemployed. However, while data availability has improved, we know relatively little about what kind of job structures people have across countries. So, even major trends on jobs are difficult to come by, especially when it comes to understanding what the future may hold. That is the gap we want to close.

What is new from an academic perspective?

Unlike other statistics, the Global Jobs Index projects into the future. We use scenarios for population growth and economic development—the same that underlie global climate reports—and show scenarios of how job markets could develop. We estimate the number of people who will enter the labour market in a specific country by 2050 and the corresponding number of jobs if this scenario were to occur.

The data source is also new. The Global Jobs Index uses micro-data that is typically a well-guarded secret. Access protocols differ from country to country. If you want to compare countries, you need standardized data collections from national statistical offices. Researchers typically only get access to a limited number of important indicators, such as the size of the labour force or the number of people below the poverty line. For the Global Jobs Index, we got access to microdata that was aggregated according to our specifications. It allows us to analyse characteristics down to the individual level and create subgroups, for example, people who work, are above a certain income level, and only have one job.

You have analysed over 100 countries. Which finding surprised you most?

I have dealt with population growth for years, so I am aware of the dynamics. In Africa, the population will roughly double by 2060. However, it is sobering to compare the level of attention a few hundred layoffs get in Europe in the current, admittedly difficult, economic situation, and then seeing the Job Gap that is in the tens of millions in many other countries. It is difficult enough in Europe to bring people into employment. Yet, an entire Europe’s worth of population will be added to Africa every ten years. That happens in a context where the economy is less developed and governments have lower capabilities.

The jobs gap seems insurmountable in many countries from the Global South. What still gives you hope?

I get hope from countries that take steps in the right direction. Ghana, for example, invested in free secondary education for students eight or nine years ago. Skills are improving. It’s become easier for local or international companies to hire these people. We also see this in Europe, where many Ghanaian workers integrate well into the labour market.

Another positive example is small Mauritius, which is barely visible on the world map, but which has managed to reach income levels on par with some European countries. Not through tourism alone, but through structural change that has created a healthy industry. Mauritius has also strategically positioned itself as a hub for Chinese investments. Then there are countries that have successfully used their resource wealth. Botswana is a good example of a country that has managed to reach middle-income status on the back of its resource wealth and not fall into political crisis as other resource-rich countries have.

What policy recommendations would you draw from the Index?

Creating the conditions for sufficient jobs is the main challenge for many developing countries over the next decade. There is no simple fix, but countries have to provide the conditions for job growth. This requires cutting unnecessary bureaucracy and investing in infrastructure, both of which can contribute to job growth. Meanwhile, education has to be a top priority because it determines the skills of the next generation. I am often surprised that it plays a relatively small role in politics, given that voters care so much about it.

Many high-income countries will see a shrinking work forces, making these countries less competitive and worse to live in. A country like Germany needs legal channels into the labour market also from outside the EU, not just for the highly qualified, but also for medium-qualified workers. If we have critical jobs that remain unfilled by German workers, firms should be able to hire abroad easily. The laws have been liberalized in recent years, but bureaucracy and a lack of support structures for integration make hiring abroad difficult in practice. The win-win, for migrants who gain new job opportunities and for Germans who benefit from the work done by immigrants, should be easier to reap.

Must development cooperation focus more on job creation?

Yes. The long-term aim of development cooperation should be to make itself unnecessary. This can only work if people are in good jobs that allow them to have a decent living standard and can pay taxes that allow their countries to stand on their own feet financially.

About

Tobias Heidland

Tobias Heidland

Tobias Heidland is a Professor of Economics at Kiel University (Christian-Albrechts-Universität zu Kiel) and heads the "International Development" research center at the Kiel Institute for the World Economy. His academic focus is on global economic development, particularly migration, capital flows, and development issues in Africa.

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