How Can Employment Address Rising Inequality?

Globalization has been often lauded by neoliberals for its equalizing effects. The argument follows that interconnecting the world’s economies in a global free market creates opportunities for all. In reality, however, globalization has not benefited all countries to the same extent. The spread of neoliberalism across the globe has left deep divisions between elites and those living in poverty. Large inequalities both between and within countries create grievances, which in turn lead to violent conflict.

One possible way of tackling this problem is to implement employment intervention strategies, such as job creation and skills-based training. Many international organizations that are active in fragile or developing countries run employment programs in the hopes of boosting growth and stability. The Hague Institute’s Employment for Stability (E4S) project aims to determine whether there is a causal relationship between the two, and analyzes how interventions in employment may improve stability. By creating a database of employment programs and analyzing employment and stability indicators in certain countries chosen for their relevance, E4S will shed light on the mechanisms at play.

There are many factors besides employment that ultimately influence stability. Economic growth is not a catch-all solution that guarantees positive results. For one, it does not necessarily lead to better governance. Secondly, if the impact of these schemes is uneven, inequality will worsen rather than improve. Employment interventions may only lead to stability if inequalities are addressed and perceived grievances amongst local populations are counteracted, taking away some of the main causes of conflict.

Focusing on employment and income is a standard strategy to combat inequality around the world, including the United States, where the distribution of wealth is also increasingly unequal. But post-conflict economies have more complex challenges to overcome than stable states. The gap between rich and poor, and especially the vulnerability of the lower classes, is much more grievous than in stable states, and the consequences of inequality reach further in states that are already fragile.

The distinct challenges that arise in countries such as Afghanistan or Kyrgyzstan (both country studies for E4S) call for tailored strategies. There is no one-size-fits-all approach. It is essential to take into account the different factors that play a role in instability and the specific circumstances of fragile economies that influence the effectiveness of employment intervention. The Hague Institute’s research will shed some much-needed light on the ways in which employment interventions might affect stability in these post-conflict countries. The presentation of the project’s preliminary findings to local stakeholders will begin in Liberia and finish in Indonesia by the end of 2016.

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