Key Labour Market Issues and Decent Work in Developing and Emerging Countries
by Martin Ostermeier
Date of Examination:2020-07-14
Date of issue:2020-08-18
Advisor:Prof. Dr. Jann Lay
Referee:Prof. Dr. Stephan Klasen
Referee:Prof. Dr. Renate Hartwig
Referee:Prof. Dr. Krisztina Kis-katos
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Abstract
English
This dissertation addresses key labour market issues and decent work in developing and emerging countries, and is comprised of four stand-alone research articles. The first article discusses the conceptual considerations for measuring decent work and proposes a set of empirically tested indicators. The evaluation of the employment-related indicators of the Millennium Development Goals (MDG) concludes that all of the assessed indicators suffer from major shortcomings, such as ambiguous interpretability, the inappropriate use of aggregate statistics, and measurement problems. One major concern that is identified relates to the fact that these indicators contain a number of strong assumptions that lack any firm empirical basis and hence often do not hold true in the context of developing countries. This critique is followed by a proposal for alternative indicators that overcome most of the weaknesses of the employment-related MDG indicators. The conceptual validity of the proposed indicators is checked against the SMART criteria, and their derivation is guided by the elements of Target 1.B and amended by an equity dimension. Building on the findings of the previous article, the second article analyses the impact of large-scale agricultural investments (LSAIs) – so-called “land grabs” – on local labour markets. The article begins with a description of the nature of LSAIs, and then discusses the concepts of labour productivity and intensity in the context of rural labour markets. The next section explains the direct labour market effects that occur when a large-scale farm has been set up. Based on three key determinants, the employment creation potential of LSAIs is assessed. This analysis shows that LSAIs can indeed result in small-scale farmers being crowded out of the market. The estimated net employment effect identified in the empirical application demonstrates the magnitude of this process. Although the effect is relatively small on global and national level, it can be substantial in the immediate surrounding of the investment site. The third article investigates the impact of demographic change on labour markets and the subsequent increasing number economically dependent persons. To begin with, it assesses the most commonly used measure of economic dependency, the demographic dependency ratio. It then introduces several alternative indicators, of which two are based on employment status and another three are based on full-potential and productive employment. The functioning of each indicator is illustrated empirically, followed by a discussion of the indicator’s validity. The assessment of the alternative measures reveals that each indicator has advantages over the others, but that no one indicator alone is able to fully capture all the dimensions of economic dependence; and hence of decent work deficits. Instead, they form a toolbox of measures that allows for a deeper analysis of economic dependence in different labour market and development contexts. The last article of this dissertation returns to the notion of decent work and addresses two of its main components: employment prospects and stability, and labour income. More precisely, it shows how longer-term employment prospects and labour incomes of young labour market entrants are impacted by an economic crisis. It begins with an introduction of the school-to-work transition concept and its connection to scarring effects. Based on a literature review of employment and income scars for youth, the empirical strategy discusses various approaches to estimate these scars. The results show that a crisis can leave both employment and income scars on the fledgling careers of young labour market entrants. This highlights the need for large-scale policy responses to prevent long-term damage in terms of future labour market prospects for youth, in particular in times of economic crisis.
Keywords: labour market; decent work; land grab; employment; large-scale agricultural investments; youth employment; scarring; demographic change; ageing; indicator; development economics; economic dependency; economic crisis; Covid-19