Jobs from Extractives

  • Jobs cost living stan­dards, raise productivity, foster social cohesion, and are the primary path out of poverty.
  • Prospects for local employment generation are significant when considering indirect and induced employment arising from goods and services that extractives companies buy locally.
  • Early planning is crucial to maximizing local employment potential since extractive projects often require specialized skills that often take time to acquire.
  • Policies leveraging economic diversification through the extractive sector may require stable macroeconomic policies that attract foreign investment, provide more leverage in trade agreements, and improve the financial market.

Case Studies

Key Resources

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Delivering on the Promise: Leveraging Natural Resources to Accelerate Human Development in Africa

This report looks specifically at ways to increase human development by leveraging extractive industries. A comprehensive list of policy ...

Employment from Mining and Agricultural Investments: How Much Myth, How Much Reality?

This report examines the job creation impact of mining and agricultural projects. A review of terminology, definitions and methodologies are ...

Flagship Report Paper Series, Paper 7: Leveraging Extractive Industries for Skills Development to Maximize Sustainable Growth and Employment

This paper explores methods of leveraging extractives projects to foster skills development and increase human capital leading to economic ...

OECD Guidelines for Multinational Enterprises

The OECD Guidelines are recommendations for multinational companies regarding principles and standards for responsible business conduct. ...

Oil, Gas, and Mining: A Sourcebook for Understanding the Extractive Industries

An introduction to the topic of local benefits from the extractive industries. This sourcebook delivers practical options around mining, ...

Responsible Gold Mining and Value Distribution

This report examines the contribution made by gold mining companies to sustainable economic development globally. Through a quantitative ...

Gender and Extractive Industries: An Overview

This resource includes a series of six short notes summarizing issues and World Bank activities which address gender dimensions in the ...

Unlocking Opportunities for Women and Business: A Toolkit of Actions and Strategies for Oil, Gas, and Mining Companies

This toolkit is designed to help develop a gender-sensitive company ecosystem and explores the theoretical importance of opening more doors ...

A Local Content Decision Tree for Emerging Producers

This document provides a basic roadmap to simplify the complex considerations that come into play when designing local content oil and gas ...

Topic Briefing

Increasing the quantity and quality of jobs within a country is a critical pathway for economic development. Jobs boost living stan­dards, raise productivity, and foster social cohesion, and they are the main path out of poverty. Policy fundamentals such as macroeconomic and fiscal stability, investment climate, and infrastructure affect the demand side of job creation, while education and skills affect the supply side. Policies that promote innovation and human capital development can increase productivity and competitiveness in the economy. Sector-specific, baseline data is necessary to inform these policies.

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Extractive industries are often thought of as creating few job opportunities compared to other industries. Often this is correct with regard to direct employment since extractive projects are capital intensive and use relatively little labor. The prospects for local employment generation are rather different when considering indirect employment arising from goods and services that extractives companies buy locally and induced employment arising from goods and services that extractives companies’ employees buy locally. The net effect of an extractive industry project on employment – that is accounting for job losses in competitors projects or industries - can be significant for the local economy as a whole. For example, to estimate the potential local employment effects of a large mining project, it is important to consider the possibility that such project might have negative job impacts on small and artisanal mining in the project area for which operations may be impaired by the larger project.

Job creation in extractive industry projects typically varies over a project’s life cycle, usually peaking during the development phase when infrastructure and engineering work is the most needed. Nonetheless, early planning is important to maximize local employment potential since extractive projects often require specialized skills that may take time to acquire. Figure 1 below provides a visual representation of the employment potential of a typical mining project. Oil and gas projects exhibit similar profiles, although different life cycles. 

Figure 1: Mining life cycle- revenue and employment contributions, reprinted from International Council on Mining and Minerals, Role of Mining in National Economies, third edition, (London: ICMM, 2016),32

The ability of an extractive project to create local employment is determined by factors beyond the control of the project. For example, the availability of local staff with the requisite knowledge and experience may require an improvement in the quality of education, changes in labor mobility, and improvement in infrastructure. While policies leveraging economic diversification through the extractive sector may require stable macroeconomic policies that attract foreign investment, provide more leverage in trade agreements, and improve the financial market (or similar but broader policy interventions).