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 3400 The global labor force has risen by about 20% since 2000, faster than the global population, which has increased by 17% 3200 3000 2800 2600 Labor force 2400 2200 2000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Labor force, millions. Source: Economist Intelligence Unit
China and India make up 40% of the global labor force … down from 43% in 2002, largely owing to slowing growth in 3500 China ’ s labor pool. 3000 India 2500 China 2000 1500 Rest of world 1000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Labour force, millions. Source: Economist Intelligence Unit
Global unemployment rate has been falling steadily … The global annual unemployment rate, across 105 large and mid-sized countries, was 6.8 estimated to be 5.6% in 2014 , down from 6.2% in 2009 , the trough of the recession. 6.6 6.4 The Great Recession of 2008-09 6.2 6.0 Steady decline in unemployment 2001 recession and lagged 5.8 labor market recovery 5.6 5.4 Global economic peak 5.2 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
… but unemployment remains high among OECD countries Unemployment soared in the advanced economies during the recession but rose only 9.0 modestly in emerging markets, in part because official unemployment rates in China 8.5 and India were little changed or unresponsive. 8.0 Unemployment rate, % 7.5 7.0 6.5 6.0 5.5 5.0 OECD non-OECD 4.5 4.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Unemployment rates weighted by size of the labor force. Official unemployment rates; ILO estimate for India. Sources: EIU Country Data ; national gov’ts
Global jobs growth has picked up but remains sluggish Global Jobs Index (y-on-y growth) 2,5 2,0 1,5 % 1,0 0,5 0,0
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) 11
Distribution of global labor force in 2013 2013 frontier 8% other advanced 7% 20% emerging 65% 12
Advanced countries: By how much does unemployment decline in the short run when output growth increases? 13
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? 15
LABOR MARKETS IN MOROCCO: OVERVIEW 16
Morocco compared with emerging markets & developing countries: annual growth in average incomes K el r n e de t y i ns m i st e at e .2 .15 .1 .05 0 -5 0 5 10 15 17
Morocco compared with emerging markets & developing countries: employment rate (left) and participation rate (right) .05 .04 .04 .03 .03 .02 .02 .01 .01 0 0 20 40 60 80 100 40 50 60 70 80 90 18
A key challenge: tackling youth unemployment 2,5 2 Ratio of youth unemployment to total 1,5 unemployment 1 0,5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 19
LABOR MARKETS IN MOROCCO: OUTLOOK 20
Conditions in Morocco’s trading partners: US and EU The US lost more jobs during the depth of the recession, but has recovered steadily 102 and, lately, strongly. Euro zone employment is still well below early 2008 levels. 100 98 96 94 92 Euro zone US 90 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 Employment, US and euro zone. Q1 2008=100. Source: BLS, ECB, Eurostat, Haver Analytics.
Unemployment rate in Morocco: a steady decline, tapering off … 18 • Latest IMF forecast 16 for unemployment: • 9 percent in 2015 14 12 10 8 6 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 22
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