In International Jobs Report A tim timely ass ssessment t of f - - PowerPoint PPT Presentation

OCP CP Poli licy Ce Center Co Conferences se serie ries

In International Jobs Report

A tim timely ass ssessment t of f glo global la labor market t s

Prakash Loungani, Advisor, Research Department, IMF and Senior Fellow, OCP Policy Center

25 February 2015

Purpose of this event

• The first public event on the International Jobs Report
• a collaboration of IMF, OCP Policy Center and Economist

Intelligence Unit

• What is the International Jobs Report?
• a timely assessment of labor market conditions around the world
• - analysis of unemployment rates in 105 countries
• - detailed analysis of 64 countries, including Morocco
• goal is to bring the same intense and continuous focus to jobs that

we give to stock markets and real GDP

2

Main Messages

• Global unemployment has declined to pre-crisis level:

5.6%

• But global employment growth remains sluggish: about

1.5% per year compared to over 2% a year before the global financial crisis

• Growth and jobs are linked—but the link has not been as

strong in Morocco as in other countries in its peer group

• Latest IMF unemployment forecast for Morocco:
• 9 percent for 2015; 8.9 percent for 2016

3

GLOBAL LABOR MARKETS

4

The global labor force is about 3.25 billion

2000 2200 2400 2600 2800 3000 3200 3400 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Labor force

Labor force, millions. Source: Economist Intelligence Unit

The global labor force has risen by about 20% since 2000, faster than the global population, which has increased by 17%

China and India make up 40% of the global labor force

500 1000 1500 2000 2500 3000 3500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

…down from 43% in 2002, largely owing to slowing growth in China’s labor pool.

India China Rest of world

Labour force, millions. Source: Economist Intelligence Unit

Global unemployment rate has been falling steadily …

5.2 5.4 5.6 5.8 6.0 6.2 6.4 6.6 6.8 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Unemployment rates for 105 countries, weighted by size of the labor force. Official unemployment rates; ILO estimate for India. Sources: EIU Country Data; national gov’ts

2001 recession and lagged labor market recovery The Great Recession of 2008-09 Global economic peak Steady decline in unemployment

The global annual unemployment rate, across 105 large and mid-sized countries, was estimated to be 5.6% in 2014, down from 6.2% in 2009, the trough of the recession.

… but unemployment remains high among OECD countries

4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

OECD non-OECD

Unemployment rates weighted by size of the labor force. Official unemployment rates; ILO estimate for India. Sources: EIU Country Data; national gov’ts

Unemployment soared in the advanced economies during the recession but rose only modestly in emerging markets, in part because official unemployment rates in China and India were little changed or unresponsive.

Unemployment rate, %

Global jobs growth has picked up but remains sluggish

0,0 0,5 1,0 1,5 2,0 2,5 %

Global Jobs Index (y-on-y growth)

Global Jobs Index will provide timely indicator of labor market conditions

• Global Jobs Index is based on data for 64 countries,

including Morocco

• Countries covered represent 95% of global GDP and 80% of

global labor force

• Where quarterly data for employment are not available,

the index relies on historical relationships between real GDP and employment

• Backed by academic research on jobs-growth link (Ball, Leigh and

Loungani, NBER Working Paper No. 18668, 2013)

• Index will be updated quarterly, using latest real GDP

forecasts from IMF and EIU.

10

LINK BETWEEN JOBS AND GROWTH

(BASED ON BALL, FURCERI, LEIGH AND LOUNGANI, 2015)

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Distribution of global labor force in 2013

12

advanced 20% emerging 65%

• ther

7% frontier 8%

2013

Advanced countries: By how much does unemployment decline in the short run when output growth increases?

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Emerging markets: By how much does unemployment decline in the short run when output growth increases?

14

Frontier markets: By how much does unemployment decline in the short run when output growth increases?

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LABOR MARKETS IN MOROCCO: OVERVIEW

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Morocco compared with emerging markets & developing countries: annual growth in average incomes

17

.05 .1 .15 .2

• 5

5 10 15

Morocco compared with emerging markets & developing countries: employment rate (left) and participation rate (right)

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.01 .02 .03 .04 20 40 60 80 100 .01 .02 .03 .04 .05 40 50 60 70 80 90

A key challenge: tackling youth unemployment

0,5 1 1,5 2 2,5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Ratio of youth unemployment to total unemployment 19

LABOR MARKETS IN MOROCCO: OUTLOOK

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Conditions in Morocco’s trading partners: US and EU

90 92 94 96 98 100 102

2008 - Q1 2008 - Q3 2009 - Q1 2009 - Q3 2010 - Q1 2010 - Q3 2011 - Q1 2011 - Q3 2012 - Q1 2012 - Q3 2013 - Q1 2013 - Q3 2014 - Q1

Euro zone US

Employment, US and euro zone. Q1 2008=100. Source: BLS, ECB, Eurostat, Haver Analytics.

The US lost more jobs during the depth of the recession, but has recovered steadily and, lately, strongly. Euro zone employment is still well below early 2008 levels.

Unemployment rate in Morocco: a steady decline, tapering off …

6 8 10 12 14 16 18 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

• Latest IMF forecast

for unemployment:

• 9 percent in 2015

22