Forecasting formal employment in cities

Abstract

Can “full and productive employment for all” be achieved by 2030 as per un Development Goal 8? The issue was assessed for 62 Colombian cities using administrative data. Larger cities have higher formal occupation rates because formal employment creation is restricted by the availability of the skills needed in complex sectors, which follows a path-dependent process. Alternative forecasts were produced using ols and machine learning algorithms. Results: the share of the working population in formal employment will increase between 13 and 32 percentage points, which is insufficient to achieve the goal. Consistency across methods was good for large cities, not for small ones.