SMARTer indicators for decent work in a post‐2015 development agenda: A proposal

• DOI: http://doi.org/10.1111/j.1564-913X.2015.00035.x
• Date: 01 September 2015
• Published date: 01 September 2015
• Author: Sebastian PREDIGER,Martin OSTERMEIER,Jann LAY,Sarah LINDE

International Labour Review, Vol. 154 (2015), No. 3

Copyright © The authors 2015

Journal compilation © International Labour Organization 2015

* German Institute of Global and Area Studies (GIGA), Hamburg, emails: martin.oster

meier@giga-hamburg.de; sarah.linde@giga-hamburg.de; jann.lay@giga-hamburg.de; sebastian.pre

diger@giga-hamburg.de (corresponding author). The authors gratefully acknowledge funding by

the Federal Ministry for Economic Cooperation and Development (BMZ) within the framework

of the project “Employment, Empowerment and Living Standards”, implemented in cooperation

with the German Development Bank (KfW). Additional nancial support by the European Union

(EU) under the 7th Research Framework Programme (Nopoor project, Theme SSH.2011.1, Grant

Agreement No. 290752) is also gratefully acknowledged. The authors wish to thank Holger See-

bens and Julia Kubny for discussions on an earlier draft of this article, and participants in the No-

poor project, the ICDD Annual Thematic Conference 2014, the PEGNet Conference 2014, and

the internal GIGA seminar for their helpful comments. The ndings, interpretations and conclu-

sions presented in this article are entirely those of the authors and do not necessarily represent the

views of BMZ, KfW or the EU.

Responsibility for opinions expressed in signed articles rests solely with their authors, and

publication does not constitute an endorsement by the ILO.

SMARTer indicators for decent work

in a post-2015 development agenda:

A proposal

Martin OSTERMEIER,* Sarah LINDE,* Jann LAY*

and Sebastian PREDIGER*

Abstract. The MDG employment indicators suffer from major shortcomings, in-

cluding measurement problems, inappropriate use of aggregate statistics, ambigu-

ous interpretability, and assumptions that do not apply to developing countries.

Based on this critique, the authors propose a new set of four indicators for pro-

ductive employment and decent work, namely: the growth of labour value added

per worker, the working poverty rate, the share of workers receiving less than an

absolute minimum labour income, and the share of workers receiving less than

60 per cent of the median labour income. They demonstrate the empirical applica-

tion of these indicators using the country cases of Uganda and Peru.

Employment is the main determinant of living standards (World Bank,

2012, p. 9). It is also of paramount importance for economic develop-

ment. Quantitative analyses conrm that rising labour earnings are the largest

contributor to poverty reduction (Azevedo et al., 2013). Beyond its fundamen-

tal and immediate contribution to household income, employment also affects

other dimensions of individual and societal well-being, including self-esteem,

mental and physical health, and social cohesion.

International Labour Review286

Recognizing that decent and productive work is central to human and

economic development, a new employment target was incorporated into the

Millennium Development Goals (MDGs) in 2008 (Target 1.B). Four quantita-

tive indicators were developed to measure progress towards this target. A fth

employment-related indicator relates to Target 3.A, on the promotion of gen-

der equality and women’s empowerment. With the MDG deadline approaching,

the international community has been intensively discussing the structure and

content of the Sustainable Development Goals (SDGs), which will build upon

the MDGs and converge with the post-2015 development agenda (ECOSOC,

2014). For the purposes of this article, the most relevant SDG proposal is the one

made by the United Nations Open Working Group on Sustainable Development

Goals (2014), whose Goal 8 aims to “promote sustained, inclusive and sustain-

able economic growth, full and productive employment and decent work for all”.

Besides the Open Working Group, several other institutions and development

practitioners have formulated proposals for employment-related targets and in-

dicators in a post-2015 development agenda (see, for example, Bates-Eamer et

al., 2012; ILO, 2012a and 2013a; Martins and Rodriguez Takeuchi, 2013).

This article contributes to the debate by proposing indicators for the

measurement of employment outcomes in a post-2015 framework. To this end,

it discusses the conceptual foundations of decent work and critically reects

on the current MDG indicators related to employment (ILO, 2009 ; Sparre-

boom, 2011). Measurement problems, the inappropriate use of aggregate stat-

istics, ambiguous interpretability, and assumptions which often do not hold

true in the context of developing countries are identied as major shortcom-

ings of the MDG indicators. In particular, we argue that the discrimination

against self-employment and family employment, implicit in the ILO’s deni-

tion of vulnerable employment and in the MDG indicators, is misplaced and

not based on rm empirical grounds. This is also one of the reasons why social

protection would be better dealt with as a separate goal focusing on popula-

tion coverage by basic social security benets. Although social protection is

one of the pillars of the ILO’s Decent Work Agenda, it does not necessarily

have to be considered in the context of employment.

Our critique is followed by a proposal for a new employment-related

target and corresponding indicators for the post-2015 development agenda.

Such a target should focus on the quality of employment and include an equity

component. It should be operationalized through indicators that are specic,

measurable, achievable, relevant and time-bound. The proposed four indicators

are (i) the growth of labour value added per worker, (ii) the working pov-

erty rate and (iii) the share of workers receiving less than (a) an absolute and

(b) a relative minimum labour income. Their empirical application is illustrated

using the country cases of Uganda and Peru.

Conceptual considerations

This section relates the MDG employment targets to some of the main di-

mensions of employment and decent work, as understood by the ILO. Our

discussion highlights different properties of employment that should ideally