Armenia : Promoting Productive Employment
This paper examines labor market outcomes in Armenia and their impact on poverty. The outcomes are of considerable concern: relatively few persons of working age are employed, and many of those who are employed have low-productivity jobs. The probl...
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Format: | Policy Note |
Language: | English en_US |
Published: |
Washington, DC
2013
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Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/2012/09/17368635/armenia-promoting-productive-employment http://hdl.handle.net/10986/13247 |
Summary: | This paper examines labor market
outcomes in Armenia and their impact on poverty. The
outcomes are of considerable concern: relatively few persons
of working age are employed, and many of those who are
employed have low-productivity jobs. The problem is not only
high unemployment, but also low labor force participation.
The main factor behind the low employment/population ratio
is weak labor demand and the scarcity of productive job
opportunities. This paper begins in section one by
discussing the main labor market challenges in Armenia,
before focusing on unemployment in section two. Section
three analyzes the nature of employment and jobs, while
section four examines wage determination and structure.
Section five then evaluates the relationship between
individuals' and households' labor market status
and poverty. Finally, section six concludes with policy
implications of the analysis. In order to reach the 60
percent employment rate Armenia would need to create an
additional 166,000 jobs. This will lead to a 14 percent
increase in employment, and to some decrease in
unemployment. More jobs need to be created to absorb the
growing labor surplus. This implies growing unemployment and
a decline in the already low employment rate. Accelerating
the pace of job creation is thus one of the main social
challenges facing policymakers in Armenia. Furthermore, it
is important that in the longer term, wage growth does not
exceed labor productivity growth. Otherwise, competitiveness
of the Armenian economy could suffer due to a growth in the
unit labor cost, which in turn, can have a detrimental
effect on job creation. |
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