Making work more equal

Measuring the Quality of Employment (QoE) in Middle Income Countries: British Academy Global Professorship Research Project

The III is hosting a British Academy Global Professorship for the project “Measuring the Quality of Employment (QoE) in Middle Income Countries”. The project started in March 2019 and extends until February 2023.

NEW Project website found here

1. Quality of Employment: dimensions and indicators 

2. Dashboard with indicator results 

3. Methodology used to measure multidimensional poverty

4. Research Team 

Recent decades have seen an increasing amount of academic and expert attention focus on the quality of employment. As the dual processes of globalisation and liberalisation have generated continuous changes in labour markets along with persistent calls for labour market flexibilisation, employment conditions such as wages, job stability and career prospects have changed. Analysts therefore recognise that for many people being employed does not guarantee a basic standard of living or well-being (OECD, 2014).

The quality of employment has therefore become an important subject of study in the social sciences, although the literature on the subject is still very diverse and spread across different academic disciplines and international institutions (Burchell et al, 2014). However, policy makers everywhere ignore what is not measured. Promoting "Decent Work For All" (SDG 8) without coherent theoretical conceptualisation, data and empirical measurement of what this means is therefore problematic, especially in middle income developing countries where employment must be a policy priority as soon as the most basic needs (e.g. nutrition, shelter and basic education). Crucially, the quality of employment (QoE) is not only of instrumental importance for improving income levels, inequalities and the coverage of social security systems. Job quality is also intrinsically important to generating individual capabilities and social justice (Sen, 1999).

However, until key employment conditions such as job rotation, precarious contracts, subcontracting, and insufficient social security contributions are measured consistently across developing countries, policy makers will continue to think of these issues as a fall-out from economic development rather as a priority area for policy intervention.

Both Sen (1999) and Nussbaum (2000) generally discuss employment as an instrumental state that generates resources, which are valuable for achieving essential functionings, capabilities or freedoms rather than for its own sake in terms of its intrinsic value. Although Nussbaum (2011) is more nuanced as employment is related to several items on her list of essential capabilities, Alkire (2007) included employment in her list of "Missing Dimensions" in the evaluation of well-being. But the literature based on the capability approach has still hardly studied the subject (Sehnbruch et al., 2019). The first objective of this research is therefore to re-examine the capability approach to define how it changes our view of employment in the development context, and thus provide a coherent theoretical framework for thinking about the QoE. This step is an important contribution to existing approaches to the QoE, which lack a coherent theoretical framework and grounding (Sehnbruch et al., 2015).

Quality of Employment: dimensions and indicators 

This research project builds on incipient work that measures the QoE, which has rarely been studied in developing countries where data is still limited. It will make a significant contribution to social indicators research as it relates to employment and inequality, and will have a noteworthy impact on policy-making. This project proposes to construct a synthetic index of the QoE that can be published by governments in addition to traditional labour market indicators such as (un)employment rates as these interact with each other.

Quality of employment (QoE)- Dimensions and indicators

So far, this research project has matched data from 15 Latin American household surveys from the year 2015 to construct regionally comparable, synthetic indices of the QoE using the Alkire/Foster (AF) method. The dimensions included in the index are: income, employment stability (occupational status or type of contract and job tenure), and employment conditions (social security contributions and excessive working hours). These dimensions are equally weighted with a nested weighting structure for component indicators. They combine key variables that capture the QoE in Latin America and constitute the only variables that are comparable across countries. 

Combine keey

Dashboard with indicator results 

As the dashboard of indicator results shows in the table below, levels of deprivation in each dimension considered by this indicator are broadly related to the overall level of development of each country, although significant variations occur, both between countries and within dimensions. Poorer countries in the region, however, display extremely high levels of deprivation, especially with regard to income levels and social security contributions. One of the important points that these results highlight, is that it is not enough to look simply at wage levels as an indicator of overall quality of employment. 

Dashbord Results

Methodology used to measure multidimensional poverty

These dashboard indicators are then summarised using the Alkire/Foster method and following the established methodology used for measuring multidimensional poverty. This methodology produces a headcount ratio (H), which counts the number of workers who are deprived in the labour market, taking account of the intensity of their deprivation (A), and thus finally produces a summary indicator (Mo). Initial results show that this method produces statistically robust results across the countries studied (Sehnbruch et al., 2018 and González et al., 2018). The graphs below, for example, illustrate that there is no clear relationship between quality of employment and employment or unemployment rates. 

Low quality employment-1

Low quality employment-2

This work has important implications for the study of inequalities. We know that participation rates in lower income deciles are much lower. In addition, the graph below illustrates that households in lower income deciles also suffer the effects of poor quality employment. In lower income countries such as Paraguay and Bolivia, low quality employment even persists in the highest income decile households. 

Low quality employment-decile

Overall, this research shows that policymakers in Latin America simply cannot rely on the idea that economic growth will produce a tighter labour market, hoping that in turn this will resolve problems related to the quality of employment. Clearly, improving other factors such as the excessive flexiblisation of employment contracts in the formal sector and high job turnover as well as a high proportion of jobs not contributing to social security systems (informal sector) must also become a priority concern of public policymakers.

Research Team

Mauricio Apablaza, Universidad del Desarrollo, Santiago de Chile and Oxford Poverty and Human Development Initiative.

Veronica Arriagada, Universidad del Desarrollo, Santiago de Chile.  

Pablo Gonzalez, Director of the Centre for Public Systems, Faculty of Engineering, University of Chile

Rocio Mendez, MSc student, University College London and Research Assistant, III

Joaquin Prieto, Research Officer, III