2 YEARS OF NOPOOR RESEARCH Policy Workshop, Brussels, November 21, 2014 Employment-related SDG targets – Can we improve the measurement of decent work? Jann Lay, based on joint work with M. Ostermeier, S. Linde, and S. Prediger

Background: MDGs, SDGs and employment Deadline for Millennium Development Goals approaching Sustainable Development Goals (SDGs) Employment of paramount importance for economic and human development Poor employment-related MDG indicators

Nopoor‘s contribution Input into the current debate on SDG targets and indicators Assessment of current employment-related indicators in the MDGs Proposal of a new target and set of indicators Empirical illustration

Employment-related MDG targets and indicators Goal 1: Eradicate extreme poverty and hunger Target 1.B: Achieve full and productive employment and decent work for all, including women and young people Growth rate of labour productivity Employment-to-population ratio Working poverty rate Vulnerable employment rate Goal 3: Promote gender equality and empower women Target 3.A: Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015 Share of women in wage employment in the non-agricultural sector

Conceptual considerations “Achieve full and productive employment and decent work for all, including women and young people” –Quantity of employment: full employment for all Ambiguities in developing countries Participation and unemployment –Quality of employment: productive employment and decent work Productive employment not well defined (underemployment?) Social security part of decent work: Why tie to employment? –Equity of employment opportunities: including women and young people Why only opportunities, not outcomes?

Open Working Group proposal 8.5by 2030 achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value; 8.6by 2020 substantially reduce the proportion of youth not in employment, education or training; 8.7take immediate and effective measures to secure the prohibition and elimination of the worst forms of child labor, eradicate forced labor, and by 2025 end child labor in all its forms including recruitment and use of child soldiers; 8.8protect labour rights and promote safe and secure working environments of all workers, including migrant workers, particularly women migrants, and those in precarious employment.

Poor conceptualization and poor indicators (examples) Strong assumptions –GDP per capita as a proxy for labour productivity (or even wages) Lack of clear target –Employment-to-population ratio –Vulnerable employment rate –Share of women in non-ag wage employment Ambiguous interpretability –Employment-to-population ratio –Share of women in non-ag wage employment Discrimination against self-employment –Definition of “vulnerable employment” Measurement problems, inconsistent methodology

Our proposed target and indicators Achieve full and productive employment and decent work for all women and men (Quantity), quality and equity Focus on income –Practical reasons and correlation with core dimensions of decent working conditions –Decent work enables a person to generate an adequate income (decent pay) –Inequality in labour incomes Social protection to be dealt with elsewhere in the SDGs 3 SMART and feasible indicators

9 Indicator 1: Growth rate of labour value added per worker Target: Increase of labour value added per worker by a certain country-specific percentage per year until 2030 Captures productivity of workers and the labour share in production Does not consider non-labour income, for example resource rents UgandaPeru (in Int$ 2005 PPP) , , Δ annual 12.8 %6.8 %

10 Indicator 2: Working Poverty Rate Target: Reduction of the incidence of working poverty by a certain country- specific percentage until 2030 Captures key aspect of decent work Improve availability and use of micro-data UgandaPeru (in %)

11 Indicator 3: Proportion of working people earning less than a minimum labour income Target: Reduce the share of people earning less than [threshold] income by a certain country-specific percentage until 2030 Absolute minimum income  Threshold: International poverty line  Unambiguous interpretation  Inter-temporal and cross-country comparisons Relative minimum income  Threshold: 60 per cent of mean or median income  Equity component

12 UgandaPeru Share of workers below… 2005/ / (in %)... the national poverty line Int$ 1.00 (PPP) per day Int$ 1.25 (PPP) per day Int$ 2.00 (PPP) per day … 60% of MEDIAN income % of MEAN income

Conclusions Current set of employment-related MDG indicators does not adequately reflect productive employment and decent work Employment and decent work are not priority targets in the SDGs But they should … with SMART indicators … as ours –Growth rate of labour value added per worker –Working poverty rate –Proportion of people earning less than a minimum labour income These indictors –Do not discriminate against self-employment –Use only available data –Stress equity –Can be disaggregated Data availability and quality remains a challenge (scope, coverage, periodicity)