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Who Creates Jobs?

Author

Listed:
  • Ejaz Ghani
  • William R. Kerr
  • Stephen D. O'Connell

Abstract

There is a consensus that jobs are vital in translating economic growth into lasting poverty reduction and social cohesion. But who creates jobs is an understudied field. This Economic Premise argues that there is a strong link between initial levels of young and small firms and subsequent job growth, as evidenced in India. The economic geography of entrepreneurship in India is still evolving. It is worrying that there are too few entrepreneurs in India for its stage of development. Yet there is no question that entrepreneurship works—cities and states that have embraced entrepreneurship have created more jobs. However, the link between entrepreneurship and job growth is not automatic. Cities that have a higher quality of physical infrastructure and a more educated workforce attract many more entrepreneurs. Supportive incumbent industrial structures for input and output markets are strongly linked to higher entrepreneurship rates. There are many policy levers that can be used by policy makers to promote entrepreneurial growth. Instead of being preoccupied with firm chasing—attracting large mature firms from other locations—policy makers should focus on encouraging entrepreneurship in their communities.
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Suggested Citation

  • Ejaz Ghani & William R. Kerr & Stephen D. O'Connell, 2011. "Who Creates Jobs?," World Bank Publications - Reports 10072, The World Bank Group.
    • Handle: RePEc:wbk:wboper:10072
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    References listed on IDEAS

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    Cited by:

    1. Ghani, Ejaz & O'Connell, Stephen D., 2014. "Can service be a growth escalator in low-income countries ?," Policy Research Working Paper Series 6971, The World Bank.
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    3. José Caraballo-Cueto, 2019. "Are Multinational Retailers Really Selling at Lower Prices Than Domestic Chains? Evidence from Three Sectors," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 13(1), pages 49-82, February.
    4. Marco Vivarelli, 2013. "Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(6), pages 1453-1495, December.

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    More about this item

    Keywords

    Infrastructure Economics and Finance - Private Participation in Infrastructure Social Protections and Labor - Labor Markets Finance and Financial Sector Development - Microfinance Water Resources - Water and Industry Small Scale Enterprise Industry;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • F2 - International Economics - - International Factor Movements and International Business
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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