Future of work - Part 1 | The global search for job quality

Today, 19% of the global workforce lives in poverty. Two billion workers worldwide—about 61% of all workers—are informally employed. And three million people die each year as a result of occupational accidents. As the push for global sustainable development continues, job creation and the raising of living standards remain a central focus of these efforts. However, to make good on the promises of sustainable development, increased attention has been devoted not only to job creation, but also to job quality. In order to adequately address well-being, more effort is needed on cultivating good jobs, and to help people connect their skills and interests to these jobs of better quality. But one challenging aspect of job quality and how it is assessed is that it can be highly variable and depend on the region of the world, country, sector, and employer. To do so, governments, businesses, investors, and development institutions need a better understanding of how to measure and evaluate job quality. Without a coherent framework and strategy, improving the amount of good jobs compared to the amount of inadequate or poor-quality jobs will remain a persistent issue.

The problem of job quality

Informal work remains an issue in developing countries, with women and children being most exposed. Informal work—even in non-agricultural sectors—represents a majority of all work in developing regions: 51% in Latin America, 65% in East and Southeast Asia. 66 percent in Sub-Saharan Africa, and 83% in South Asia. 

While global convergence to higher quality job standards is the goal, job quality at the national level can fluctuate given policy and business cycles. According to the Labour Rights Index, four developing countries saw declining ratings of good job access in their last evaluation. But worsening job quality can also occur in developed countries as well. A 2023 review of the European Job Quality Index (JQI) found that developed countries such as Greece, Spain, and France saw decreasing working conditions. 

A study that focused on Latin America showed that a majority of workers are deprived in terms of both income and at least one other variable of job quality. Poor employment conditions can ‘trap’ workers in conditions of deprivation due to the compounding of poor labor standards or job quality. 

What is a “good job”?

The characteristics of jobs have evolved over time, thus the idea of what constitutes a good job has varied. When determining job quality historically, many definitions have focused on formality of the job. Yet the types of jobs that people are employed in today differ considerably in more dimensions than the formal structures in place. Accurately understanding the quality of a job is important because of its relationship with living standards, productivity, and well-being.

The United Nations Sustainable Development Goal #8 calls for “promoting sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all”. Decent work for all must necessarily focus on this idea of quality. The International Labor Organization (ILO), a specialised agency of the United Nations, defines decent work for all to mean, “productive work that delivers a fair income, with workplace security and social protection, prospects for development and social integration, freedom to organise, and equality of opportunity.”

The extent that a job meets these criteria will vary, particularly because countries and industries have different approaches and realities related to their work. When speaking with Patricia Richter, a Senior Technical Officer from the ILO, she told us, “A good job is probably a job that you would like your children to perform in the future, related to skills, mobility, and other factors. But if you try a one-size fits all approach, it just doesn’t work. Sectors are very important to separate out on the job quality side. If you’re looking at agriculture, a lot of the job creation potential looks very different compared to renewable energy.”

How can we measure job quality?

Defining the elements of a good job is important, but to evaluate, compare, and improve job quality, there needs to be quantitative and qualitative measurement to aid in decision-making. To help systematise job quality measurement, the OECD released a framework in 2015 to help allow for comparisons over time and across countries and socio-demographic groups. One of the key elements of their approach was to integrate their measures with the agenda on well-being. This helps to place emphasis on the aspects of employment that are most important for worker well-being and allow for easier cross-country comparison. The original dimensions focused on earnings quality, labour market security against both risks of unemployment and risks of extremely low pay, and quality of the working environment. This led to a set of over 50 indicators that could be measured within these domains to evaluate the quality of a countries job. 

Further work in 2022 has been done by the World Bank to allow a similar framework for job quality to be operationalised. The World Bank’s latest framework provides a multidimensional measure of job quality that can track and benchmark job quality across countries using microdata, which is more comprehensive for disaggregation, such as by sociodemographic group or industry. This approach uses four overarching indicators: sufficient income to overcome poverty, access to job benefits, employment stability, and adequate working conditions, and creates a single index by which to compare country workforces. The new index by the World Bank helps to fill a gap in the existing policy and development space as previously the level of data in developing countries has been less robust.

What insights do job quality measures reveal?

Indices such as those by the OECD and the World Bank can inform research, policies, and investments. In some of its earliest results, researchers at the World Bank identified Sub-Saharan African countries as having very low scores in job quality as they scored poorly in shares of the population working without formal wages.

David Simms, who is the founder and managing partner of impact investment fund Talanton, told us, “In most of sub-Saharan Africa, only 15 to 20% of adults have a pay-check coming to them from an employer. Most good jobs have some certainty of an income stream and a support network to assure fair treatment with respect to wages or income.” 

Meanwhile, developing countries in East Asia and the Pacific performed about average, while Latin American countries tended to exhibit stronger job quality performance. Dimensions of job quality vary highly by region. For example, benefits measures saw large variation amongst developing countries with countries such as Uruguay and Mongolia exhibiting strong values, while others such as in Peru and Rwanda had extremely low ratings. Meanwhile a dynamic country such as India scored very poorly (.14) in the dimension of stability.

As Patricia Richter from the ILO told us, this is crucially important for better livelihoods. “The most vulnerable parts of the population work on day contracts. If anything happens to them, they have no access to health accident coverage. They are not covered. Their families are not covered. And they could end up with a disability, not be able to contribute to their family income.”

Patterns also show differences by sector, as certain industries perform better in job quality across countries, such as finance, professional services, utilities, and public administration. Other sectors such as agriculture and construction saw worse metrics, particularly for benefits and stability. Job quality can also differ based on other demographics, such as gender. The analysis by the World Bank revealed that on average women and men fare about equally in overall job quality, but that women are likelier to fare better in benefits and working conditions, while men fare better in the dimensions related to income levels. Similar disparities exist when evaluating other socioeconomic dimensions such as education levels, city vs. rural location, and youth employment.

How can better measures of job quality inform policy?

Research has found that the effect of job quality on an individual’s well-being is as strong as the impact of one’s physical health on their well-being. This effect is true across countries, both in the developing world and in developed countries. Better quality job impacts well-being through its relationship with improved earnings and wealth, better job security, reduced inequality, and increased health and safety. Creating better workplace environments can equip people opportunities to fulfil their ambitions, feel useful in society, and see the workplace as a place to build self-esteem and achieve personal accomplishment. This increases quality of life through its relationship to meaningful social connections, civil engagement, and a sense of community. And job security and stability relates to personal security and safety, including those related to adequate healthcare and nutrition.

Public policies that are able to target different aspects of job quality such as workplace environment or job security can help shape individual well-being in ways that job creation and increased earnings alone will not be able to do. Therefore using these multidimensional criteria will be crucial to evaluate success and truly advance good quality jobs.

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