Jobs Challenge in the South Caucasus

JOB CHALLENGE IN THE SOUTH CAUCASUS JOBS, SKILLS, AND SHARED PROSPERITY IN THE SOUTH CAUCASUS GEORGIA South Caucasus countries - POPULATION 4.3 M Armenia, Azerbaijan, and Georgia - lag behind many economies in harnessing the transformative power of jobs. GDP $16.1 B ARMENIA AZERBAIJAN POPULATION 2.9 M POPULATION 9.4 M GDP $10.3 B GDP $73.5 B ARMENIA POVERTY UNEMPLOYMENT 1 30% I High unemployment I rate in Armenia leads to poverty and growing inequality. 16% Using the poverty line of $2.50 a day, Armenia's poverty rate remains high. 53 OUT OF 100 52 OUT OF 100 2 OUT OF 3 people of working age of 15-64 years are employed. unemployed persons are jobless for more than a year. persons of working age are participating in labor market. INFORMAL LABOR: 64% Informal jobs often do not prevent poverty. As a result, Armenia has a large number of working poor. Low-paid jobs pay less than 2/3 of the median wage. $250 1 IN 4 JOBS IS LOW PAID AZERBAIJAN POVERTY UNEMPLOYMENT Using a national poverty line of $5 a day, Azerbaijan's poverty rate is low. 1 6% I Unemployment rate I in Azerbaijan is low, but labor force 5.2% participation declines. Declining labor force participation and the sectoral distribution of jobs are cause for concern. Sectoral composition of growth poses challenges to employment creation. 77.6% Labor force participation AGRICULTURE The low-productivity, low-growth agricultural sector is the biggest employer (37% of employment). AZERBAIJAN'S GDP $73.5 B Had labor force participation not decreased from 81% in 2005 to 76% in 2012, unemployment would be about MINING SERVICES 10.7% Dominating in GDP with 40%, mining employs less than 1% of the workforce. Services absorb half of the working population. Entreprenership in Azerbaijan remains low Lack of skilled workers is an obstacle 10% 33% Only about 10% of the labor force in Azerbajan can be considered latent entrepreneurs, far below the regional average of 27%. Azerbaijan's 20% of the enrollment rate in tertiary education is low, compared to 25% for middle income countries, and 33% for upper-middle income countries. 20% GEORGIA POVERTY UNEMPLΟΥΜENT Poverty in Georgia is decreasing, but still high at 66% in rural areas. I Despite reform efforts, I Georgia has not done particularly well in employment outcomes. 14.8% 14.6% 53% 66% 29% are employed in agriculture, which contributes to less of larbor force participation in Georgia is low, and nearly of youth in Georgia are unemployed, an increase from the previous year. than 17,000 31% 10% OF GDP people in the working age population decided I to opt out of the labor force during 2014. of young people (aged 15-24) are not in education, employment or training. a sharp decline from over 50% two decades ago. Poverty continues to be associated with labor market status of the household head. Labor market plays an important role in Georgia in bringing Among those households where the head is unemployed poverty rate is almost twice as high as among those who are employed. prosperity to the "bottom 40%", or the poorest people 24% 14% if unemployed if employed THE WORLD BANK IBRD • IDA | WORLD BANK GROUP www.worldbank.org/armenia www.worldbank.org/azerbaijan www.worldbank.org/georgia