Labour market performance and migration flows - European ...

European CommissionOccasional Paper 60, Volume Ithough at a slower rate than private employment. Indeed, the State continues to be the employer of lastresort for women in the region.1.3 Estimation of Job Creation Needs Until 2020Estimating the number of new jobs needed (locally or abroad) to absorb the increasing labour force is notstraightforward as it depends on a number of assumptions such as the growth level in the working agepopulation, labour force participation rates (which are reduced for young people as they stay longer inthe education system but which increases with the increase in educational attainment, in particular forwomen) and unemployment rates. To provide a rough estimate of the number of jobs needed, a numberof assumptions have been made: first, that the current number of unemployed workers remains constant;second, that the same is going to happen to current labour participation rates. Finally, that no migrationflows will take place (which is of course a counterfactual assumption, but necessary to make projectionswith a certain degree of certitude). To exclude any impact from fertility rate developments and to frameour projections in a reasonable policy-making time framework, we decided to limit our exercise until2020, i.e., to limit our estimates to the next 10 plus years.Indeed, this makes sense, as tensions in all AMC labour markets will peak in the coming ten tofifteen years. As shown in Table 1.3.1, adding together the projected needs for new jobs calculated forthis Study under conservative assumptions, on the basis of national statistical sources, AMCs will needmore than 1,500,000 additional jobs a year over the coming 10 years just in order to provideemployment opportunities for new labour market entrants at current levels of employment and to keepthe (already very high, almost 7 million) number of unemployed unchanged. And this assumesconstant labour participation rates. This amounts to a sustained growth rate in total employment of 3%over those years. These estimates should be considered the lower limit of job creation needs.Table 1.3.1. Estimation of Yearly Job Creation Needs until 2020*Morocco Algeria Tunisia Egypt Palestine Jordan Lebanon Syria TOTAL2009-2020* 180000 225100 84600 715526 45977 53501 15000 221000 1540704+5% labourparticipation ofwomen228000 317600 107077 742286 70294 54845 16700 247000 1783802*Assuming unchanged labour participation rates and number of unemployed.Source: National Background Papers from national statistical sources.The 15 million new jobs which are needed over the next ten years amount to a 30% increase inrelation to the current level of total employment in those countries, and between 1/3 and 2/3 more jobsper year than have been created over the last five years of relative job creation boom in the region.Thus the status quo in terms of employment policies and development models risks making tensions inthe labour markets unsustainable for the social fabric, greatly affecting social cohesion and stability inthe region – and hence adding to migration pressures.Assuming that, as is happening already in most countries in the region, the participation rate ofwomen increases over the next decades to catch up to the world average, an increase of 5 percentagepoints in the labour participation rate of women in the next ten years, consistent with the average trendobserved in the last ten years, this would add 243,000 jobs a year to the number of jobs to be createdfor the 8 countries under consideration. This, together with migration, is the main adjustment variableto these projections and to the dynamics of AMC labour markets in the coming years.34