Falling Unemployment in the Maghreb: Positive but Misleading Figures
27 December 2010
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Unemployment rates have fallen significantly in Morocco, Algeria, and Tunisia over the past ten years.
Falling birth rates and low female participation have considerably reduced pressure on the job market.
The jobs created mainly benefit people with low levels of education.
"Statistics are like a bikini: what they reveal is suggestive, what they conceal is essential." This witty remark could apply to the employment situation in the Maghreb, as shown in a Carnegie Middle East study on the subject, conducted by Lahcen Achy, professor at the National Institute of Statistics and Applied Economics (INSEA) in Rabat and researcher at the said firm.
The Maghreb countries covered by the study (Morocco, Algeria and Tunisia) have managed in the last ten years to reduce unemployment to fairly low levels, as official statistics show: 9.1% in Morocco, 10.2% in Algeria and 13.3% in Tunisia in 2009, compared to 13.4%, 30% and 15.7% respectively in 2000. Statistically, this is a spectacular improvement, particularly in Morocco and Algeria.
The purpose is obviously not to doubt these figures; they are, after all, developed from criteria established by the International Labour Organization (ILO). But the author is not satisfied with this. He does not stop at what the statistics show; he gives us the reasons that made this statistic possible and which lead him to write that "the fall in unemployment in the Maghreb is (...) a misleading sign and should not be interpreted as an indicator of an improvement in the performance of the labor market".
So why are these "flattering" statistics on employment in the Maghreb "misleading"? The study puts forward four explanatory factors for the statistical decline in unemployment, without any real links with economic growth.
The activity rate is between 40 and 50% in the Maghreb, compared to 73% in Southeast Asia
Firstly, the demographic factor: like elsewhere in Europe and America, Maghrebis are having fewer and fewer children. Fertility rates in the three countries in question have on average halved in about a quarter of a century. From 6 children per woman at the beginning of the 1980s, we have gone to 2.5 children per woman in 2007. As a result, population growth has slowed considerably: a little over 1% per year in 2008, compared to 3% in the 1980s. This demographic transition, as demographers call it, has obviously considerably reduced the pressure on the labor market; the working-age population consequently shrinking due to the fall in birth rates. For example, the working-age population, which was growing at an annual rate of 3.7% in the 1980s, increased by 2% on average between 2000 and 2008. The same phenomenon is at work in other Maghreb countries.
Secondly, participation rates in the three countries considered are "particularly low", says the author of the study. In Morocco, the activity rate (which indicates the share of active people in the total population aged 15 and over) was 49.9% in 2009, compared to 54.5% in 1999. In Tunisia and Algeria, this rate is even lower: 46.9% and 41.4% respectively in 2008, compared to 51% and 48.1% in 2001. Elsewhere, these ratios can reach up to 70%: 65% in Latin America, 69% in Southeast Asia and 73% in East Asia, with the world average being 64%. The Carnegie study puts forward the low level of female participation as an explanation for this decline in activity rates: 27% in Morocco in 2009 (compared to 28% in 2003), 14% in Algeria (compared to 17% ten years earlier) and 25% on average over the last ten years in Tunisia, yet a precursor in the field of women's emancipation.
Thirdly, the development of the informal sector in the Maghreb, according to Mr. Achy, is largely responsible for job creation and, therefore, for the decline in unemployment. In Morocco, informal employment accounted for 37.3% of total non-agricultural employment. Its stock increased from 1.9 million jobs in 1999 to 2.22 million in 2007, representing the annual creation of more than 35,000 informal jobs.
In Algeria, informal employment accounted for 27% of employment in 2007, compared to 20.2% in 2000. And if we only consider private sector employment in urban areas, the informal sector reaches 42.6%, compared to 34.9%, according to the Carnegie study. The study does not mention the rate of informal employment in Tunisia, probably due to a lack of statistics. It can be considered certain that this phenomenon also exists in Tunisia (in what proportions?), as it does in the countries on the northern shores of the Mediterranean.
Youth unemployment is twice as high as national unemployment
Fourthly, and finally, while national unemployment has fallen over the past ten years, youth unemployment remains very high (see table). According to the author's calculations (as official bodies in the three countries do not provide data on this age group), unemployment among young people aged 15 to 29 in Morocco increased from 15.3% in 2003 to 17.6% in 2008. In Algeria, unemployment among young people in the same age group stood at 21.5% in 2008, compared to...45% in 2003. Tunisia has the highest youth unemployment rate (over 30%), and this level has not improved in recent years. Youth unemployment, whatever is said, is quite informative about the quality of jobs generally offered: they are most often not adapted to the qualifications of these young people, at least not to their expectations. These young people are generally graduates, and they are not prepared to accept any job and, above all, any pay. This is why, and all the statistics show it, unemployment among graduates is much higher than that of the uneducated. And this is true in the three Maghreb countries studied.
In Morocco, unemployment among graduates has fallen from 29% in 2001 to 20% in 2008, but this level remains very high compared to national unemployment. In Algeria and Tunisia, youth unemployment has, on the contrary, increased over the same period: from 10% and 10.4% to 19.8% and 21.6% respectively. Unemployment among the uneducated, on the other hand, is less than 5% in the three countries. Overall, economic growth in the Maghreb remains generally poor in terms of jobs, and especially in terms of quality jobs. And if unemployment is at a fairly flattering level, falling fertility rates, the still limited role of women in the economy and the importance of the informal sector are the most determining factors.
Published on December 20, 2010
Posted online on December 25, 2010
lavieeco.com
Falling birth rates and low female participation have considerably reduced pressure on the job market.
The jobs created mainly benefit people with low levels of education.
"Statistics are like a bikini: what they reveal is suggestive, what they conceal is essential." This witty remark could apply to the employment situation in the Maghreb, as shown in a Carnegie Middle East study on the subject, conducted by Lahcen Achy, professor at the National Institute of Statistics and Applied Economics (INSEA) in Rabat and researcher at the said firm.
The Maghreb countries covered by the study (Morocco, Algeria and Tunisia) have managed in the last ten years to reduce unemployment to fairly low levels, as official statistics show: 9.1% in Morocco, 10.2% in Algeria and 13.3% in Tunisia in 2009, compared to 13.4%, 30% and 15.7% respectively in 2000. Statistically, this is a spectacular improvement, particularly in Morocco and Algeria.
The purpose is obviously not to doubt these figures; they are, after all, developed from criteria established by the International Labour Organization (ILO). But the author is not satisfied with this. He does not stop at what the statistics show; he gives us the reasons that made this statistic possible and which lead him to write that "the fall in unemployment in the Maghreb is (...) a misleading sign and should not be interpreted as an indicator of an improvement in the performance of the labor market".
So why are these "flattering" statistics on employment in the Maghreb "misleading"? The study puts forward four explanatory factors for the statistical decline in unemployment, without any real links with economic growth.
The activity rate is between 40 and 50% in the Maghreb, compared to 73% in Southeast Asia
Firstly, the demographic factor: like elsewhere in Europe and America, Maghrebis are having fewer and fewer children. Fertility rates in the three countries in question have on average halved in about a quarter of a century. From 6 children per woman at the beginning of the 1980s, we have gone to 2.5 children per woman in 2007. As a result, population growth has slowed considerably: a little over 1% per year in 2008, compared to 3% in the 1980s. This demographic transition, as demographers call it, has obviously considerably reduced the pressure on the labor market; the working-age population consequently shrinking due to the fall in birth rates. For example, the working-age population, which was growing at an annual rate of 3.7% in the 1980s, increased by 2% on average between 2000 and 2008. The same phenomenon is at work in other Maghreb countries.
Secondly, participation rates in the three countries considered are "particularly low", says the author of the study. In Morocco, the activity rate (which indicates the share of active people in the total population aged 15 and over) was 49.9% in 2009, compared to 54.5% in 1999. In Tunisia and Algeria, this rate is even lower: 46.9% and 41.4% respectively in 2008, compared to 51% and 48.1% in 2001. Elsewhere, these ratios can reach up to 70%: 65% in Latin America, 69% in Southeast Asia and 73% in East Asia, with the world average being 64%. The Carnegie study puts forward the low level of female participation as an explanation for this decline in activity rates: 27% in Morocco in 2009 (compared to 28% in 2003), 14% in Algeria (compared to 17% ten years earlier) and 25% on average over the last ten years in Tunisia, yet a precursor in the field of women's emancipation.
Thirdly, the development of the informal sector in the Maghreb, according to Mr. Achy, is largely responsible for job creation and, therefore, for the decline in unemployment. In Morocco, informal employment accounted for 37.3% of total non-agricultural employment. Its stock increased from 1.9 million jobs in 1999 to 2.22 million in 2007, representing the annual creation of more than 35,000 informal jobs.
In Algeria, informal employment accounted for 27% of employment in 2007, compared to 20.2% in 2000. And if we only consider private sector employment in urban areas, the informal sector reaches 42.6%, compared to 34.9%, according to the Carnegie study. The study does not mention the rate of informal employment in Tunisia, probably due to a lack of statistics. It can be considered certain that this phenomenon also exists in Tunisia (in what proportions?), as it does in the countries on the northern shores of the Mediterranean.
Youth unemployment is twice as high as national unemployment
Fourthly, and finally, while national unemployment has fallen over the past ten years, youth unemployment remains very high (see table). According to the author's calculations (as official bodies in the three countries do not provide data on this age group), unemployment among young people aged 15 to 29 in Morocco increased from 15.3% in 2003 to 17.6% in 2008. In Algeria, unemployment among young people in the same age group stood at 21.5% in 2008, compared to...45% in 2003. Tunisia has the highest youth unemployment rate (over 30%), and this level has not improved in recent years. Youth unemployment, whatever is said, is quite informative about the quality of jobs generally offered: they are most often not adapted to the qualifications of these young people, at least not to their expectations. These young people are generally graduates, and they are not prepared to accept any job and, above all, any pay. This is why, and all the statistics show it, unemployment among graduates is much higher than that of the uneducated. And this is true in the three Maghreb countries studied.
In Morocco, unemployment among graduates has fallen from 29% in 2001 to 20% in 2008, but this level remains very high compared to national unemployment. In Algeria and Tunisia, youth unemployment has, on the contrary, increased over the same period: from 10% and 10.4% to 19.8% and 21.6% respectively. Unemployment among the uneducated, on the other hand, is less than 5% in the three countries. Overall, economic growth in the Maghreb remains generally poor in terms of jobs, and especially in terms of quality jobs. And if unemployment is at a fairly flattering level, falling fertility rates, the still limited role of women in the economy and the importance of the informal sector are the most determining factors.
Published on December 20, 2010
Posted online on December 25, 2010
lavieeco.com
