Demographic trends and natural resources have long affected the Arab region’s labor market. With the protracted conflicts that hit the region since 2011, major repercussions have been witnessed in several Arab countries, such as Syria, Iraq, Yemen, Libya, Somalia, and Palestine. Despite the widening disparities, the Arab countries continue to share common labor market features and face similar challenges. The challenges that mark the labor market are in general related to low labor force participation, especially among women, high unemployment rates, especially among youth, large but decreasing shares of public sector employment, and high prevalence of informal employment.
 

Labor force participation rate in the region is the lowest worldwide at 48.2 percent, mostly due to low participation rates of women at 20.5 percent.[1] In 15 Arab countries, only half or fewer, are actively engaged in the labor market. This rate is the lowest in conflict-inflicted countries such as Yemen (38.5 percent) and Syria (40.8 percent) and the highest in the GCC countries, reaching 87 percent and 82.9 percent in Qatar and the United Arab Emirates respectively.[2] This is explained by the fact that these countries are labor importers. The labor force participation rate of men is more than triple that of women in the Arab region. In Yemen, male labor force participation rate is 12 times higher than female labor force participation rate, registering only 5.8 percent. Only Djibouti, Comoros and Kuwait show a female to male labor force participation ratio above the global average of 0.64, with 0.77, 0.74 and 0.67 respectively.[1]
 

There is a wide mismatch between labor supply and labor demand resulting in high unemployment rates in many countries, especially among young men and women. This mismatch is largely the result of the structure of the economy in most countries, whereby it’s locked into low value-added activities. Unemployment in the Arab region is the highest worldwide at 10 percent and is twofold the world average. Palestine suffers from the highest unemployment rate at 29.9 percent. On the other hand, GCC countries have very low unemployment rates, with Qatar registering the lowest rate in the world at 0.2 percent.[2] 
 

The Arab region is characterised by having a young and well-educated population.[3] Nearly more than half of the population in the Arab region is below the age of 30.[4] However, the lack of job creation and the mismatch between the highly educated new entrants into the labor market and the market needs has led to high youth unemployment, especially among women and the more educated. Youth unemployment rate in the region is the highest in the world at 25.6 percent.[1] Only 5 countries have registered youth unemployment rates lower than the world average of 11.9 percent, including 4 GCC countries and Comoros.[2]
 

Cultural and social norms, as well as, structural obstacles limit women’s participation in the labor market. Women in the Arab region face a higher risk of unemployment and they still face high barriers to entry into the labor market. The female unemployment rate registered 18.8 percent and is still very high compared to men’s unemployment rate at 7.7 percent [1] and to a world average of 5.4 percent [2] Female youth unemployment rate registered a high 38.5 percent, is the highest in the world, almost double the rate among young men.[1]
 

The public sector has always been the preferred source of employment for job seekers in the Arab region, offering public employees attractive financial benefits and stability. In the GCC countries, for example, this sector continues to absorb most of the national employment, despite the reforms and policies that support national employment in the private sector. In Kuwait, for example, 65.6 percent of the nationals were employed in the public sector in 2015.[5]
 

The role of the informal sector in the economy has been a persistent feature of the Arab economies. Job creation has been always shaped by the low productivity and informal sector. According to latest available data by the International Labor Organization (ILO), 67 percent of an Arab country’s workforce is employed in the informal sector, lacking access to job security, social protection and other fundamental rights.[3]

 

This overview has been drafted by the ADP team based on most available data as of June 2019. 
 



Sources:

[1] ADP calculations based on data extracted from  the International Labour Organization (ILO). 2018. ILOSTAT. [ONLINE] Available at: https://www.ilo.org/ilostat  [Accessed 27 June 2019].

 

[2] The International Labour Organization (ILO). 2018. ILOSTAT. [ONLINE] Available at: https://www.ilo.org/ilostat  [Accessed 27 June 2019].

[3] The International Labour Organization (ILO). 2019. Employment Promotion. [ONLINE] Available at: https://www.ilo.org/beirut/areasofwork/employment-policy/lang--en/index.htm [Accessed 27 June 2019].

[4] ADP calculations based on data extracted from the Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat. 2019. World Population Prospects. [ONLINE] Available at: https://population.un.org/wpp/ [Accessed 24 June 2019].

[5] Central Statistical Bureau (CSB). 2016. Annual Statistical Abstract. [ONLINE] Available at: https://csb.gov.kw/Pages/Statistics_en?ID=18&ParentCatID=2 [Accessed 27 March 2019].



Labor and Employment Statistical Snapshot 2018
view all

Data Highlights

  • Labor force participation rate in the region is the lowest worldwide at 49.8% in 2015, mostly due to the low participation rates of women. This rate is the lowest in conflict-inflicted countries such as Palestine (43.7%), Iraq (42.4%), and Syria (41.7%).

view all

Publications