Jordan - Issues of employment and labor market imbalances (Vol. 1 of 2) : The main report

Report No. 5117-JO Jordan Issues of Employment and Labor Market Imbalances (In Two Volumes) Volume 1: The Main Report May 1986 Division 2C Country Programs Department 11 Europe, Middle East and North Africa Region FOR OFFICIAL USE ONLY Document of the World Bank This report has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS 1982 1983 1984 1985 1 Jordan Dinar (JD) = US$2.84 US$2.75 US$2.60 US$2.54 1 US Dollar ($) = JD.352 JD.364 JD.384 JD.394  FOR OmFCIAL USE ONLY PREFACE A Bank Economic Mission visited Jordan in December 1983. This report is based on the findings of the mission which consisted of Messrs. G. Segerlund (Chief of Mission, General Economist), A. Taha (Manpower Specialist), and M. Allak (Demographer/Manpower Specialist, Consultant). Research Assistance was provided by Ms. J. Giddings. This document has a restricted distribution and may be used by recipients only in the performance of their ofcial duties. Its contents may not otherwise be discksed without World Bank authoriaon.  ABSTRACT The economic slowdown in the neighboring countries since 1982 has in many ways affected the Jordanian economy; it led to a slowdown of domestic economic activity and a reduction of inflow of external resources. One immediate impact of the recent slowdown has been a substantial weakening in domestic and external demand for Jordanian labor. Foreign demand for Tordanian labor also concentrates more and more on highly skilled and experienced professionals. At the same time, the rapid increase in the Jordanian labor force will continue unabated in the future, fuelled by a continuing high population growth rate and by a spectacular increase in enrollment in the formal education system, particularly of women. Thus, over the next five years, the manpower problem in Jordan is likely *.o shift from one of selective shortages that triggered a substantial inflow of non-Jordanian labor in the past, to one of finding employment for a rapidly increasing domestic workforce. Based on the above considerations, the objective of this report is to demonstrate the need for a gradual readjustment and reshaping of the Jordanian economy in order to alleviate the medium and long term employment implications of a continued slow-down in regional growth. To this avail, it projects, and evaluates likely changes in the employment situation over the medium and long term expected to result from the changed economic conditions in Jordan and in the region, and from past and present education and training efforts. For this purpose, the report finally assesses the implications of this evaluation for employment policies and institutional arrangements.  JORDAN - EMERGING ISSUES OF EMPLOYMENT AND LABOR MARKET IMBALANCES Table of Contents Page No. Country Data Summary and Conclusions i-xi CHAPTER I. INTRODUCTION - A NEW ECONOMIC SETTING AND ITS BROAD MANPOWER IMPLICATIONS 1 CHAPTER II. STRUCTURE OF HUMAN RESOURCES 3 A. Population 3 1. Population Growth 3 2. Migration 4 B. Labor Force Structure 4 1. Total Domestic Labor Force 4 2. Labor Migration 5 C. Education and Training 7 1. Fornal Education System 7 2. Training System 9 D. Employment 10 1. Sectoral and Occupational Growth and Structure 10 2. Female Employment 12 3. Productivity 13 4. Wages 14 E. Unemployment 16 CHAPTER III. TRENDS OF LABOR SUPPLY AND EMPLOYMENT PROSPECTS 18 A. Economic Prospects 18 1. Overview 18 2. Value Added and Labor Productivity 20 B. Projections of Manpower Requirements by Sector and Occupations 22 C. Population and Labor Force Projections 26 1. Population Projections 26 2. Migration Outlook 28 3. Growth Prospects of the Labor Force 29 D. Manpower Balance 31 1. Results of the Manpower Model 31 2. Overall Assessment 34 CHAPTER IV. POSSIBLE EMPLOYMENT POLICIES 35 A. Policies Affecting Labor Demand 35 1. Industrial Development Strategy 36 2. Agricultural Policy 38 3. Public Sector 38  .Table of Contents (Continued) Page No. B. Policies Affecting Labor Supply 39 1. Education Policy and Training 39 2. Female Participation 43 3. Migration Policy 44 4. Population Policy 45 C. Experiences of Other Countries 45 CHA=TER V. PROPOSAL FOR HUMAN RESOURCES POLICY AND PLANNING SYSTEM 47 A. Present System for Human Resources Information and Planning 47 B. Proposal for a Comprehensive System for Human Resources and Planning System 49 1. Objectives of the Proposed System 49 2. Institutional Arrangements for Planning and Policy 50 3. Institutional Set-Up for Data Compilation and Analysis 52 4. Implementation 54 1. The Compound Model - An Integrated Computer Based Manpower Forecasting Model 2. Demand and Supply Assumption Used in the Model 3. Present Population Structure and Population Projections 4. Proposal for Management Training in Jordan 5. Present System for Human Resources Infermation and Planning 6. Wages 7. Mini Survey of Female Employment Conditions Statistical Appendix  91,000 sq. kM. 25.51 d9mt (idIM) 235 pwr sq I Bee of ph:u 4.0 IRmg a M M 2/ BALI Qe bith rnte (per 1,000) 45.0 yultiam Fr 110ici.a (kwe death rate (per 1.000) 6.0 hapdal pwr ptad bd 5W As ID PX1 U- Dl Y 3m Oca4i.d d*mllis witboat Z of pqulaem - ub pipe m.ter (2) 83.0 - am. C1ozie intdg an Z of raqiramnrt 131. Mult litr0y autel Per cqd=z pratein int*a (Winmead) SLO hmAiy ctual OMMSIM Z 1 Tm of