There is increasing evidence in economics that better management and improved business practices matter for productivity in both large and small firms. However, evaluations of traditional business training programs offered to existing small firms have found limited impacts on business profits, particularly for women. A set of issues can play a role: while business training programs change knowledge, they may not lead to a large enough change in business practices to affect outcomes; or perhaps these programs are not teaching the right skills.
One approach to respond to the skills hypothesis has been to incorporate insights from other fields like behavioral economics and psychology. These approaches may replace the need for traditional business training or complement at the margin their effects.
In Togo, we tested the importance of alternative skills by comparing two types of training: traditional managerial training using IFC Business Edge, and a psychology-based personal initiative training pro-gram. The personal initiative had very large effects on innovation and capital investment, but also on business practices learnt in traditional programs, including record keeping and HR management. The evaluation showed that entrepreneurs who took the personal initiative training saw their profits rise by an average of 30% relative to the control group (40% for female entrepreneurs), compared with a statistically insignificant 11% effect for traditional training (5% for female entrepreneurs). The training is cost-effective, paying for itself within one year.

The world is projected to add 3.1 billion people to the total population and 1.4 billion people to the working-age population between 2024 and 2100. Almost all of the additional working-age people will be added in Sub-Saharan Africa, a dramatic change from previous decades, when the growth of the working-age population was concentrated in Asia. This paper analyzes the demography of the African labor force in the coming decades using the latest United Nations population projections. We show that by 2050 Africa will be the only region in the world with a growing working-age population, and will be the only region in which the ratio of dependents to working-age population is falling. These dramatic differences between Africa and other regions are the result of Africa’s later and slower fertility decline, with fertility still high in many countries. The continued growth of Africa’ working-age population creates both opportunities and challenges. On the one hand, being the only region with a growing working-age population may create opportunities for investment and economic growth. On the other hand, Africa will need to produce 2 million jobs per month by 2040 to keep up with the growth of the working-age population. This will be one of the biggest challenges facing the continent in the coming decades.

Women are overrepresented among the world’s poorest and underrepresented in well-paid jobs. The new G²LM|LIC program aims to investigate the causes of gender disparities in labor markets, assess their implications for equity and efficiency, and guide policy design. The program, a joint venture between the UK Department for International Development (DFID) and the IZA Institute of Labor Economics, launched with an inaugural workshop on June 19, 2024. This report provides a summary of the discussions held on the state of existing evidence and questions for future research.

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This study reports the findings of three randomized survey design experiments implemented in different seasons of the agricultural calendar among Fairtrade coffee households in rural Ethiopia. The design focuses on the random allocation of the same survey instrument across child and proxy respondents for the measurement of child labor statistics. Our findings show the work of girls in agricultural settings is systematically underreported by the head of household relative to the child’s reports. Underreporting is explained by the child/proxy gender mismatch as differences in child labor reports ranges from 7 to 10 percentage points for girls when the proxy respondent is male. On the contrary, no reporting differences are found for boys across all seasons when the head of household is male. The magnitude of the child labor underreporting is larger among households with mixed child gender composition relative to households with homogeneous child gender composition. Underreporting by the proxy respondent, relative to the child’s own report, is not observed across other related outcomes such as schooling and household chores. Knowledge of Fairtrade standards and the degree and scope of effective commercial links between farmers and Fairtrade cooperatives do not have a systematic differential effect on the proxy reporting of child labor.