However, the role of jobs in reducing poverty and inequality
goes beyond the level of earnings associated with them. Having social insurance coverage associated
with employment can be an important tool for preventing the vulnerable from falling into poverty as
they grow old or if they become sick. Accordingly, having stable employment helps protect earnings
from the ups and downs of the business cycle. Finally, having a job that is empowering and rewarding
can be welfare enhancing on its own beyond the associated monetary compensation (World Bank 2013).
The task of assigning a monetary value to these job characteristics involves a high degree of
ambiguity. While the market value of pension, disability, and health benefits or a more secure job can
be large, the calculation of each involves several complex decisions. For instance, it requires making
strong assumptions about the timing, likelihood, and welfare impacts of illness and family-care
responsibilities and how different types of jobs may mitigate or exacerbate to varying degrees such
direct impacts. At the same time, the likelihood, timing, and size of these shocks vary across age, area of
residence (urban/rural) and educational attainment, as well as gender. This challenge becomes even
harder when trying to estimate job quality measures that are comparable across countries and across
time.
This article adopts the approach to the analysis of job quality developed by Brummundi, Mann, and
Rodriguez-Castelan (2018), who aggregate different dimensions of a job into one index, based on a
methodology similar to that of multidimensional poverty measurement. This study includes four
dimensions to measure job quality. First, it considers whether a job pays high enough earnings, that is,
above a minimum level of well-being. Second, it considers whether a job provides benefits such as
health insurance and old-age pensions.
Third, it considers job security, which aims to capture the extent
to which workers are protected from becoming poorer during economic downturns. In addition, job
security is associated with other positive outcomes such as reduced stress and improved mental health
(Watson and Osberg 2018; LaMontagne et al. 2020). Finally, it considers job satisfaction in order to
capture the role of other nonmonetary or unobservable characteristics of job quality. For example, our
data sets do not allow for the systematic measuring of on-the-job training or expectations about career
growth, which can be important factors for evaluating job quality.
In practice, these four dimensions of job quality are measured according to the following criteria:
1. Labor Income (
): labor market earnings above the poverty line of US$6.85/day at 2017
Purchasing Power Parity (PPP), which is the upper-middle-income-country poverty line.
2. Benefits (
): the job provides health insurance or retirement benefits.
3. Security (
): the job is considered secure if either (1) the worker has a contract, (2) the
job is permanent, or (3) the worker has kept the job for a long enough period (at least three
years).
4. Satisfaction (
: Given that not all surveys contain questions on job satisfaction, we
presume that the worker is satisfied with their job if they do not have a second job. This is based
on literature that has documented the association between the holding of one or more
