|Social Protection and Labor's Labor Markets Core Course: Aid, Growth, and Jobs|
|World Bank JB1-080|
|ne of the most pressing goals of development aid is the alleviation of poverty. In the WIDER working paper ‘Aid, Growth, and Jobs’ Gary Fields suggests that one key way in which poverty reduction can be achieved is by helping the poor to earn more in the labour market. He argues that this method of poverty reduction is underemphasized and outlines a number of policy options that should be considered by those wishing to adopt it. It is an oft-repeated truism that the only asset of poor people is their capacity to labour. They have as much of this capacity as anyone else, but are poor because they are compensated very little for their labour, or because they are unemployed and earn nothing. For Fields, the move from this to the idea that development should focus on helping the poor earn more in the labour market is a simple one. If labour is the only asset the poor have, then development should focus on helping them use it to earn the money necessary to move them up and out of poverty. Fields highlights the fact that the International Labour Organizations estimate that there are around 200 million unemployed people in the world, but over 900 million people are earning too little to achieve a standard of living of US$2 a day. This, alongside the fact that unemployed people are found disproportionately in high income countries, leads Fields to suggest that while promoting employment is important, the greater development challenge is to generate higher earnings for those who are already working.