KFW DEVELOPMENT BANK

Employment impact measurement is a key challenge that will benefit tremendously from harmonisation and further joint development

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On behalf of the German government, especially the Federal Ministry for Economic Cooperation and Development (BMZ), and the European Union, KfW Development Bank finances and supports programmes and projects that mainly involve public sector actors in developing countries and emerging economies. We are committed to improving economic, social and ecological living conditions all around the world.

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Systematically quantifying employment effects is a big challenge. We need to come to feasible estimations which requires modelling based on well-founded assumptions. In 2012, we developed a model to estimate the job effects on an aggregate portfolio level. In 2018, KfW Development Bank went a step further and commissioned Steward Redqueen to develop a financial sector-specific input-output-based model to estimate job effects. Currently, we are looking into options of including more sectors and making the estimations even more robust.

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KfW Development Bank highly values the harmonization efforts of the JIM Group. We strongly support the founding members’ ambitious goal of joining forces and developing a common employment model. As a first step, KfW Development Bank has signed the Memorandum of Cooperation in January 2021. In parallel, we are in the process of assessing the applicability of the JIM for our employment reporting as an IFI and identifying potential adjustment needs. At the same time, we are committed to engage and contribute to further improving the model in 2021.

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It will surely not be an easy way forward, but we believe that working together on impact measurement and reporting, specifically for employment, is an essential and big step towards more transparency and consistency.