Demand-side policies for employment creation

The level of economic activity is a primary determinant of employment. A wide range of economic policies can be used to influence the level, stimulate the demand for labour and hence encourage job creation. These include, among others, monetary and fiscal policies; trade and exchange rate policies; and, sectoral and enterprise policies. Through their effects on capital investment, technological advance and physical and social infrastructure, these policies also have a bearing on productivity, structural transformation, long-run economic growth and future job prospects.

Active macroeconomic management was a main underpinning of the success of advanced economies in attaining full employment throughout most of the post-World War II period. But it fell out fashion, and the role of macroeconomic policies was confined to the narrow task of ensuring low inflation. The experience of the Great Recession has caused a rethinking of the prevailing consensus, highlighting in particular the importance of aggressive fiscal and monetary policies in sustaining consumption and investment levels. An aggressive policy stance has also characterized the initial response of most countries to the COVID-19 crisis. As the economic and employment ravages of the pandemic play out all over, maintaining such a stance will be essential to support the restart of the economy and a full job recovery.

The call for reconsidering the use of macroeconomic policies for employment promotion came from the Second Recurrent Discussion on Employment at the 103rd Session of the International Labour Conference in June 2014. In their Resolution, governments, employers’ and workers’ organizations called upon ILO member States to promote comprehensive employment policy frameworks based on tripartite consultations, which would include as a main element “pro-employment macroeconomic policies that support aggregate demand, productive investment and structural transformation, promote sustainable enterprises, support business confidence, and address growing inequalities”. The work of EMPLAB on economic polices addresses this mandate through:
  • highlighting and disseminating lessons and practices that could help make macroeconomic and sectoral policies be more employment friendly in line with country needs and circumstances;
  • providing technical assistance and capacity building to ILO constituents as they engage with macroeconomic and sectoral questions in the design and implementation of national employment policies;
  • facilitating broad policy dialogue and reaching out to ministers of finance, trade, industry, central banks and other agencies; and,
  • advocating for employment-friendly approaches in international forums and vis-à-vis international and regional groups.
These are intended to contribute to the attainment of the ambitious goals of the 2030 Agenda for Sustainable Development, in particular SDG 8 on inclusive growth, full and productive employment and decent work for all.

Services and products

  • Knowledge products such as working papers and research and technical briefs. Examples include:
  • The organization of seminars and international conferences such as the Employment Policy Research Symposiums on The Future of Full Employment, 12-13 December 2019. 
  • Capacity building for ILO constituents, policy-makers and practitioners through training courses and training modules in cooperation with the ILO International Training Centre in Turin.
  • Technical assistance to countries in the design of employment policies and programmes, e.g. for Armenia, Azerbaijan, Costa Rica, Ghana, Mozambique, Philippines, and Portugal.
  • Advocacy in international forums, e.g. presentation on The employment impact of the COVID-19 crisis and the route to recovery, Framework Working Group meeting under the Saudi G20 Presidency (virtual meeting, 8 June 2020). 
  • Policy analysis and research on the impact of economic policies on the labour market situation of women and youth, e.g. the report on GET Youth ; analysis of the impact of fiscal policy on youth employment, Rising to the youth employment challenge, chapter 2 ; on the impact of Covid-19 on youth labour markets, Youth & Covid policy brief.


In addition to close partnerships with policy-makers and tripartite constituents in all ILO member states, the work of the branch benefits from the contribution of a large network of academic specialists and experts from think tanks and research institutes in advanced, emerging and developing economies. Moreover, EMPLAB engages in regular interactions with experts from the IMF, World Bank, OECD, UNCTAD, UNDESA and other UN agencies, and cooperates with them in providing technical support to several international and regional bodies and UN initiatives such as the G20 and the UN task teams on Financing for Development.