ABSTRACT
Despite the importance of productive employment, development discourse at both international and national levels has tended to bypass the issue. This is reflected in the conspicuous absence of employment in influential strategies like the poverty reduction strategy papers and millennium development goals – at least in the initial thinking on them. According to the standard neoclassical theory, output growth is supposed to lead to employment growth, and interventions in the labour market, e.g., through labour laws, trade unions, or minimum wages, distort the labour market and prevent it from producing the optimal outcome in terms of employment. By preparing the workforce for the labour market, education and training should contribute to meeting the employment challenge. Better educated and trained people should have a greater probability of being employed because education and training can raise qualifications and make labour force more productive. This should be reflected in lower rate of unemployment for those with higher levels of education.
