National Employment Strategy


 Full Report - PDF File  النسخة العربية
 

Executive Summary

A top priority for Jordan is creating an adequate quantity and quality of jobs.

The current labor problems in Jordan include:

o   Structural unemployment, especially among youth

o   Low labor force participation, especially among women

o   Growth of joblessness

o   Failure to follow through on labor initiatives

o   Failure to create an appropriate institutional environment for policy formation and evaluation

Efforts to improve labor conditions should include supply-side, demand-side, and institutional elements.

·   The goals of the National Employment Strategy (NES) are:

o   Short-term goal (2014): absorbing the unemployed

o   Medium term goal (2017): better skill-matching and micro and SME growth

o   Long term goal (2020): economic restructuring and increased productivity

Key Findings

Demand factors prevent economic growth (6.7% from 2000-08) from creating jobs in the private sector (double digit unemployment):        

o   Imprudent fiscal policy: high budget deficit and low competitiveness indicators

o   Domestic investment remains low, making overall investment vulnerable to oil shocks

o   Service-oriented economy based on low skilled labor

o   90% of registered enterprises are micro or SMEs, which struggle to gain credit

In order for Jordanian sectors to move up the value chain and increase tradability, economic incentives must seek to improve productivity, skill content, and exports.

·   Labor supply can respond better to demand

o   Mismatch of labor supply and demand; 15,000 new university graduates are unemployed

o   Jordanian students score low on standardized tests compared to international levels

o   Technical and vocational training (ETVET) is weak

o   Supply is determined by in and out migrations in which skilled workers leave Jordan and non-skilled enter

o   Labor supply is segmented in terms of public vs. private sector employment, gender, geography, foreign vs. national workers, and formal vs. informal economy

Institutional/Policy Framework is lacking with the absence of an umbrella structure that unites stakeholders and initiatives; a Higher Council for Human Resources Development is needed.

Recommended Actions and Initiatives

Launch Demand-Side Initiatives: enable the private sector to move up the value chain, create more jobs, and increase productivity

 

·   Enact policies that encourage investment in jobs for Jordanians

o   Create investment patterns that lead to growth of higher value-added sectors and increased employment

o   Increase job opportunities in governates and rural areas

o   Increase capital contribution and expenditures in sustainable economic development

·   Enhance competitiveness of economy

o   Introduce progressive tax policy and tax policy that encourages short-run job creation

o   Increase ease of entry and exit, especially for SMEs

o   Reform monetary policy to stimulate job creation and market stability

·   Rationalize employment in the public sector

o   Reframe public sector employment to be based on needs of the government, not as a solution to unemployment

o   Harmonize wages between the public and private sectors

Launch Supply-Side Initiatives: Create a skilled and motivated Jordanian labor force, which is able and willing to meet the demands of the labor market

 

·   Rationalizing foreign labor and partnering with Jordanian diaspora

o   Use foreign labor to complement local labor, not substitute for it

o   Recruit Jordanian diaspora to support new and existing local projects

·   Increase labor market participation

o   Increase female labor participation by reducing practical obstacles (e.g. work hours and scheduling)

o   Increase male participation by improving education, especially vocational

o   Increase the participation of people with special needs

·   Enhance quality of higher education and vocational training system

o   Train students in behavioural skills, civil education, and career guidance

o   Match vocational training with needs of the market

Create Improved Institutional Framework: Enhance comprehensive planning, effective implementation, and monitoring and evaluation of human resources development programs

 

·   Improve social protections and labor rights

o   Ensure all public and private sector workers receive the benefits granted by law

o   Develop dialogue mechanisms between the public and private sector

·   Improve information systems, financing criteria and monitoring and evaluation

o   Make public policy development rely on current statistical data and information, and make this information available to all

·   Develop a comprehensive institutional framework for human resources development

o   Institutionalize the coordination between human rights development and investment

o   Clearly define the responsibilities of different entities involved in human resources development

 

Report Name

Date

Timeline

National Employment Strategy

2010

2011-2020

Author

Supporting Donor

Ministry of Labor

CIDA – USAID (indirect)

Sector

Lead Ministry

Employment

Ministry of Labor

Key Topics

Fiscal policy – Foreign workers – Higher Council for Human Resources Development – Institutional framework – Investment – Labor force participation – Monetary policy – Productivity – Tax policy – Unemployment – Vocational training

 

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