 Tanzania Jobs DiagnosticCarly Petracco and Javier Sanchez-Reaza No 30898333, Jobs Group Papers, Notes, and Guides from The World Bank Abstract: Tanzania has just entered a phase of growing dependency rates that will put pressure on job creation so that the larger number of dependents do not fall into poverty. However, the new millions of jobs that will be needed in the next decade is only part of the challenge. It is important to create better jobs. An economy that produces plenty of good jobs is the most direct way to continue the trajectory toward lower poverty rates. Challenges to creating more and better jobs for the poor and vulnerable groups stem from both labor demand and supply issues. On the demand side, large firms in a few sectors dominate. Possibly because of that dominance, micro and small firms find it difficult to grow and provide new jobs. Firms’ relatively restricted market access may also be a crucial factor in explaining comparative low productivity and employment. Trade expansion and a well-connected economy would address issues of comparative low-productivity and employment. On the supply side, urban areas have high unemployment. In rural areas, underemployment is on the rise. The fall in unemployment rates may be largely explained by discouraged workers withdrawing from the labor force. Where there is willingness to work—like with women and young workers—disparities in the access to quality employment is an obstacle. Finally, the rise in educational attainment was insufficient to address labor market challenges likely due to the fall in the quality of education. The objective of the Jobs Diagnostic (JD) is to identify the main challenges to job creation and to improve the quality and inclusiveness of employment. The JD is a data-driven exercise that looks at macroeconomic and demographic factors, as well as labor supply and demand to pinpoint the main constraints for a jobs-rich growth path. The fact that JDs are data-driven allows for international comparisons based on standardized datasets.The JD covers three main areas: macro and demographic trends, labor supply, and labor demand. The first section looks at the relationships between employment growth, labor productivity, and economic growth to set the macro context to later examine labor supply and demand. The second section cover labor supply. It aims to identify trends in labor supply to understand the population’s needs for employment, the unemployment challenges, underemployment, and waged and informal employment. These trends include working-age population (WAP), labor force, and inactivity. Once identified, international comparisons are based on a global harmonized household database (International Income Distribution Dataset— ‘I2D2’). The labor supply section in JDs employs a set of harmonized variables that are comparable across countries and time. The third section covers labor demand. It aims to identify the links between sectoral productivity, size, age, and other characteristics to assess the constraints for employment growth, productivity, and wages. Firm-level datasets such as Enterprise Surveys, (which allow for some international benchmarking), or censuses of enterprises are used to do this. The demand for labor is derived from the production of goods and services by entrepreneurs to meet the demand for products in an economy. The analysis also highlights who gets the jobs created in the economy and what variables determine earnings and employment. A JD analyzes a country’s economic transformations in relation to other experiences. There are three important aspects of such transformation: Structural transformation (the movement of labor across sectors); Spatial transformation (or “urbanization”; the movement of labor across places); and Organizational transformation (or “formalization”; the movement from informality to formal work, and from self to waged employment). A JD also identifies the characteristics of individuals that can access jobs in the economy, and those who are left behind. Keywords: employment rate; European Development Finance Institutions; Trade and Foreign Direct Investment; rural area; urban population growth; urban population growth rates; employment growth; quality of job; short period of time; per capita growth rate; financial sector stability; Primary and Secondary Education; labor supply; gdp growth rate; commodity price; current account deficit; high fertility rate; change in employment; annual average growth; movement of labor; improvement in productivity; Agriculture; Young Workers; demographic change; Natural Resources; labor productivity; productivity gain; privileges and immunity; per capita term; barrier to competition; gross domestic product; reduction in poverty; bureau of statistic; supply of labor; european investment bank; Merger and Acquisitions; employment growth rate; natural resource rent; labor force growth; source of employment; quality of education; labor market security; economic growth rate; national poverty line; decline in unemployment; increase tax revenue; employment and unemployment; return to education; labor force statistics; children per woman; demand for labor; employment in industry; economies of scale; highly skilled worker; primary school enrollment; exchange rate liberalization; number of workers; poverty line using; demand for product; poverty headcount; labor demand; social trends; demographic trend; absolute change; Learning and Innovation Credit; unpaid work; cubic feet; investment growth; productivity growth; Job Creation; economic reform; commercial farming; working-age population; demographic factor; vulnerable group; tobacco prices; firm growth; industrial production; urban dweller; female workers; private consumption; market concentration; price control; emerging country; wage employment; labor movement; skill mismatch; unemployment rate; rural population; supply side; Exchange Rates; market access; trade deficit; rural female; teacher quality; educational performance; unemployed worker; female farming; Power Generation; educational quality; fish fillets; passing score; average wage; high wage; offshore gas; government arrears; vat refunds; regional growth; annual investment; real gdp; fiscal space; state intervention; centrally determine; public policy; debt relief; agricultural produce; private investment; anticorruption drive; financial resource; foreign reserve; international exchange; foreign currency; import liberalization; black market; government intervention; foreign creditor; state ownership; import good; gas reserve; export value; base metal; school attendance; young men; young woman; nonrenewable resource; electricity need; protectionist policy; institutional change; Macroeconomic Stability; Hydroelectric Power; female unemployment; import license; water resource; comparative advantage; firm entry; inland fishery; direct participation; fertile land; domestic investment; perceived risk; central planning; productivity differential; marginal productivity; log wage; labor status; summary statistic; fresh market; financial crisis; employment expansion; participation rate; productivity regression; trade balance; employment status; informal employment; agricultural sector; horizontal axis; discouraged worker; quality employment; capital deepening; ongoing support; agricultural employment; employment share; high unemployment; technological change; investment climate; farming sector; sectoral employment; development partner; dependency rate; poor household; agricultural worker; urban setting; inclusive jobs; Poverty Measurement; production cost; macroeconomic factor; employment trend; poverty decline; vegetable oil; palm oil; Stunted Growth; copper ore; poverty depth; fresh fish; interpersonal relationship; informal constraint; million people; high urbanization; urbanization process; public consumption; copyright owner; market performance; intermediate input; precious metal; sole responsibility; international benchmarking; trade imbalance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wbk:jbsgrp:30898333 Access Statistics for this paper More papers in Jobs Group Papers, Notes, and Guides from The World Bank 1818 H Street, N.W., Washington, DC 20433. 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