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Research Support to the Special Initiative on Training and Job Creation

With the African population expected to double by 2050, 20 million new jobs are needed annually. The increasing importance of employment creation led the German Ministry of Economic Cooperation and Development (BMZ) to establish the Special Initiative "Training and Employment“. The GIGA offers research support and advice to this initiative.
BMZ, 2019-2023

Research Questions

The Special Initiative "Training and Employment" (short: SI Jobs), led the German Ministry of Economic Cooperation and Development (BMZ), contributes to the implementation of recent policy initiatives geared towards fostering private investment, such as the Marshall Plan with Africa and the G20 Compact with Africa. Activities are concentrated in six African countries (Côte d’Ivoire, Ethiopia, Ghana, Morocco, Senegal and Tunisia), and the objective is to create up to 100,000 permanent jobs, train up to 30,000 persons, and to improve incomes and working conditions.
The research project intends to support the BMZ and the implementing institutions by investigating the effects of important representative approaches used in the SI Jobs, and in providing research-backed recommendations geared towards optimising the various policy measures over the course of the project if necessary.

The project adresses the following research questions:
- How effective are the policy measures of the SI Jobs in creating training opportunities and permanent jobs, and in improving incomes and working conditions?
- How exactly do these measures work, which (project- or context-specific) factors reduce or promote these effects? Could a better interaction between the various instruments of the SI Jobs increase its impact?
- Which recommendations can be derived from the research results for the BMZ, the implementing institutions, other development cooperation organisations as well as national governments and other organisations on the ground?

Contribution to International Research

The RéUsSITE project will advance international research in multiple ways. First, it will contribute to a growing body of rigorous evidence on the employment effects of different types of labour market interventions, which is scarce especially in African contexts. Second, it will improve the data basis on foreign direct investment in selected African countries and associated investment promotion measures, thereby enabling research on the effectiveness of these measures. Third, it will provide evidence on the effectiveness of policy approaches combining private investment with training and employment.

Research Design and Methods

Two work packages (WP) examine the impact of the SI Jobs measures (1) on labour market outcomes of beneficiaries, and (2) on the level of investment projects.

Work Package 1: Rigorous measurement of the impact of SI Jobs measures on labour market outcomes of beneficiaries
In this work package, the employment effects of at least one strategically relevant measure of the SI Jobs, in particular in the areas of vocational training, employment-effective higher education and entrepreneurship, are to be analysed by means of a rigorous impact evaluation. The focus will be on a measure for which there is insufficient evidence so far. The first step will be to systematically integrate the existing evidence for this type of intervention, which may consist of (impact) evaluations and studies as well as systematic reviews. In order to increase external validity, the measure should be examined in two different (country) contexts, if possible. Research is needed, for example, on the question of the extent to which the quantitative and qualitative employment effects of initial and continuing vocational training increase if investors and companies participate, or whether the probability of business start-ups by graduates increases after internships and study projects with companies. Statements on the quality of the employment and training relationships created are also important, e.g. are the employment relationships permanent (if at all to be assessed in view of the duration of the research project), and are labour standards observed? Against the backdrop of such possible gaps in knowledge, the measure suitable for impact evaluation should be discussed and identified together with the SI Jobs and the DOs.

Work Package 2: Assessment of the effects of SI Jobs support measures at the level of investment projects
In the second work package, the effects of the SI Jobs measures on the success of investment projects will be examined with regard to (1) their actual implementation, (2) the mobilisation of foreign and domestic capital, (3) the creation of employment and its quality, as well as (4) the links to the local economy, if applicable. The work package applies a mixed-methods approach: On the one hand, the connections between investment promotion measures and project success are to be quantitatively examined on the basis of a database on investment projects to be created. On the other hand, these quantitative studies are supplemented by qualitative case studies of individual funding measures or investment projects. Both approaches serve to compare the effectiveness of different investment promotion approaches in different contexts (countries, regions or even sectors). In this work package, particular importance is attached to the question of a counterfactual scenario, which cannot be so easily established by a randomized experiment: If an investment project had not existed, would it have been implemented just as quickly, to the same extent and in the same form? In other words: (How) did the measure contribute to the implementation of the investment project in this way? The planned analyses are also based on a written review of the available evidence.

Preliminary Findings

WP1: Projects for the evaluation of SI measures have been selected and the baseline survey of the first project in Ghana has been conducted. WP2: Identified knowledge gaps range from basic facts about FDI prevalence in Africa to the lack of information on the impact of FDI on employment outcomes and the effects of investment promotion measures on investment decisions. A newly assembled greenfield FDI projects data base provides the basis for further investigation. These data will allow us to analyze the direct employment effects of FDI as well as to examine the effectiveness of investment promotion measures.