May 1, 2009 The Employment Lab: New Diagnostic Tools for Employment Focused Development. Labor Market Indicators for low/middle-income countries Paul Cichello. Motivation. Standard indicators inadequate in depicting labor market conditions in low/middle-income countries.
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The Employment Lab:
New Diagnostic Tools for Employment Focused Development
Status in employment (waged and salaried, self-employed, unpaid family workers)
Fraction of working-age population actively engaged in the labor market
Fraction of working-age population employed
Share of the labor force which is unemployed
All unemployed persons for an extended period (1 year or longer)
Fraction of employed population in waged and salaried job, etc.Some standard indicators
Most of working-age population is employed, but workers are often underemployed and working poor.
How much are they earning?
(1) Earnings data collected from wage and salaried workers only and
(2) Significant share of unpaid workers
Wage and salaried workers:
Self-reported earnings in reference period
Household enterprise workers:
Total household enterprise earnings in reference period (sum of reported earnings of own-account workers) distributed to own-account and unpaid workers in proportion to hours worked. Alternatively, run a profit function, predict profits and individual contribution to total profits, then split profits according to individual contribution.
Low earnings line 1 = individual poverty line
Why individual poverty line?
To see if the worker earnings enough to individually escape poverty
Low earnings line 2 = individual poverty line x scaling factor for household dependency on individual earnings
Why scale up?
Earnings of worker also typically used to support other members of the household
Proposed country-specific low earnings line:
national individual poverty line x the median ratio of household members to working-age employed household members