Proceedings of The 9th International Conference on New Ideas in Management, Economics and Accounting
Impact Bonds as Mechanisms of Job Creation
This paper explores the role of impact bonds as mechanisms of job creation by introducing a novel theoretical framework that brings together concepts from general systems theory and the modern search and matching theory. First, through the proposed framework i identify the range of job creation strategies that can be followed inside the ecosystem that emerges with the implementation of an impact bond mechanism. Second, the concepts are further tested at an empirical front by relying on available data on all impact bonds with an employment focus in 20 countries. I find that in 89% of the ecosystems, jobs are created when a service provider, reallocates the beneficiaries inside the ecosystem to markets in which vacant jobs are stationed by tackling the binding factors that prevent them from meeting and producing together; skills mismatch (79%), coordination failure (17%) or spatial mismatch (4%). The results vary across ecosystems that reflect distinct international contexts. In ecosystems located in upper and lower middle income economies jobs are created purely by filling existing vacancies, a process regulated by a service provider that acts as a planner inside the ecosystem and controls the configuration of the beneficiaries across markets.
keywords: impact bonds, employment impact bonds, ecosystem, search and matching process.