The chapter examines how firms’ labour flexibility strategies and capital structure are related with firm performance, based on a firm‐level dataset on formal private sector enterprises in 132 countries. It finds that “investing in people” whether through a strategy of functional labour flexibility or financing decisions for securing working capital (i.e. funds for day‐to‐day operations), is the key feature of enterprises with higher competitiveness and better job quality. Through the provision of formal training for permanent employees, functional labour flexibility is associated with higher productivity and wages, while numerical labour flexibility, enhanced through the use of temporary employment, is associated with lower productivity and wages. Additionally, securing external formal funding to provide working capital is important. Those enterprises that use bank loans for working capital more intensively enjoy higher productivity and pay higher wages, while those that rely more heavily on internal funds are less productive and pay lower wages. In addition, the positive relationship between the use of bank loans and wages is not observed when bank loans are used for new purchases of fixed assets, suggesting that securing formal external funding for new investments is not automatically linked to better job quality.

International labour standards ensure a just transition to a green economy. They provide the legal foundation to deal with social issues of the green economy, and can promote decent working conditions in green sectors. Some countries are integrating decent work agenda in their environmental legislation. Social dialogue can help a transition to sustainable economies. It can prevent and reduce the environmental impact of enterprises, and improve working conditions, as appropriate environmental regulations and practices also help to prevent and minimize risks to worker health

No abstract

No abstract

This chapter investigates how employment outcomes vary with respect to firm size, age and sector and over time. It provides an in‐depth analysis of formal private sector enterprises in 132 developing, emerging and developed economies by identifying the types of firms (by size and age) that created and destroyed jobs during the pre‐ and post‐crisis periods. The chapter finds that both firm size and age are related to the employment situation. In particular, relative to SMEs, large enterprises are the principal source of employment in the formal private sector. But SMEs and young firms are more dynamic than large firms, both with respect to employment growth and as an important source of employment and firm ownership, particularly women. Since the crisis, for certain types of employment the contribution of young firms and SMEs has declined, owing in part to the faster rate of job destruction seen in SMEs relative to large enterprises. Finally, region‐specific (and by extension country‐specific) characteristics play a stronger role in influencing firm size than the specific sectoral composition. These findings shed light on the importance of an enabling environment for enterprise survival and growth. Indeed, there is a need for policies to better promote SMEs’ and young firms’ access to resources, particularly in the post‐crisis era.