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Labor Market Dynamics in Libya A WORLD BANK STUDY Public Disclosure Authorized Public Disclosure Authorized Labor Market Dynamics in Libya REINTEGRATION FOR RECOVERY Public Disclosure Authorized Public Disclosure Authorized Labor Market Dynamics in Libya A WORLD BANK STUDY Labor Market Dynamics in Libya Reintegration for Recovery © 2015 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 17 16 15 14 World Bank Studies are published to communicate the results of the Bank’s work to the development com- munity with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally edited texts. This work is a product of the staff of The World Bank with external contributions. The findings, inter- pretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http:// creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: World Bank 2015. Labor Market Dynamics in Libya: Reintegration for Recovery. A World Bank Study. Washington, DC: World Bank. doi 10.1596/978-1-4648- 0566-0. License: Creative Commons Attribution CC BY 3.0 IGO. Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. 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All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@ worldbank.org. ISBN (paper): 978-1-4648-0566-0 ISBN (electronic): 978-1-4648-0567-7 DOI: 10.1596/978-1-4648-0566-0 Cover art: Cover design: Debra Naylor, Naylor Design, Inc. Library of Congress Cataloging-in-Publication Data has been requested Labor Market Dynamics in Libya • http://dx.doi.org/10.1596/978-1-4648-0566-0 Contents Acknowledgments ix Executive Summary xi Abbreviations xix Chapter 1 Introduction 1 Objectives of the Study 1 Notes 3 Chapter 2 Structure of the Libyan Labor Market 5 Introduction 5 Overview of the Labor Force 5 Where Are the Jobs? 10 Contracts and Social Insurance Coverage 10 Wages and Earnings 13 Who and Where Are the Unemployed? 17 Conclusions 23 Notes 23 Chapter 3 Building Labor Market Institutions and Policies 25 Introduction 25 Emerging Supply-Side Actors 25 Diverse Demand-Side Actors 27 Revisiting Labor Regulations 29 Conclusions 30 Notes 30 Chapter 4 Profiles and Preferences of Workers: Investing in Job Training 31 Introduction 31 Employment Preferences 34 Skills 36 Job Search 39 Typology of Job Seeker Profiles 40 Conclusions 43 Notes 44 Labor Market Dynamics in Libya • http://dx.doi.org/10.1596/978-1-4648-0566-0 v vi Contents Chapter 5 Perspectives of Firms: Investing in the Business Climate 45 Introduction 45 Growth and Employment 45 Hiring Practices for National and Foreign Workers 52 Contracts 53 Skills and Training 54 Labor Regulations 56 Conclusions 57 Notes 58 Chapter 6 Policy Implications: Emerging Opportunities during Transition 59 Summary of Findings and Key Challenges 59 Framework for a Comprehensive Jobs Strategy 60 Conclusions 66 Notes 67 Appendix A Rapid Labor Market Assessment Methodology 69 Objectives 69 Labor Supply Assessment 70 Labor Demand Assessment 71 Challenges 75 Appendix B Rapid Labor Market Assessment Questionnaire Design 77 Appendix C Operational Framework for a Public-Private Job Training and Placement System 79 Boxes 4.1 Design of Rapid Labor Market Assessment of Libya’s Supply Side, 2012 33 4.2 Future Directions for Assessing Employment Skills 37 4.3 Methodology for Developing Job Seeker Profiles 41 5.1 Design of Rapid Labor Market Assessment of the Demand Side 46 6.1 Weathering Crises through Work in East Asia and Pacific 61 6.2 Effects of Job Training and Placement in Mexico 64 6.3 Jobs and Reintegration in Bosnia and Herzegovina 64 6.4 Local Public-Private Partnerships in Libya 65 Figures ES.1 Unemployment Rate in Libya xiii ES.2 Policy Pathway to Jobs and Reintegration for Libya xv 1.1 Framework for Jobs and Reintegration in Fragile Contexts 2 Labor Market Dynamics in Libya • http://dx.doi.org/10.1596/978-1-4648-0566-0 Contents vii 2.1 Libya’s Labor Force by Age and Gender 6 2.2 Labor Force by Educational Level and Age 7 2.3 Labor Force by Educational Level: International Comparisons 7 2.4 Labor Force Participation Rate, 2012 8 2.5 Job Seekers Registered with WAC by Preconflict Employment Status, 2012 9 2.6 Libya’s Labor Force by Occupation 10 2.7 Libya’s Occupational Distribution by Gender 11 2.8 Distribution of Employment by Economic Sector 11 2.9 Distribution of Employment in Key Sectors: International Comparisons, 2012 12 2.10 Type of Employment Contract by Sector and Age 13 2.11 Tax Wedge: International Comparisons 13 2.12 Social Security Coverage by Sector and Age 14 2.13 Overall Wage Distribution in Libya 14 2.14 Wage Distribution by Sector in Libya 15 2.15 Average Wages per Capita by Occupational Category and Relative Share 15 2.16 Tertiary versus Secondary Education Wage Premium by Gender and Sector 16 2.17 Wage Differentials between Private and Public Sectors by Educational Level 16 2.18 Distribution of Age-Specific Underemployment Rates by Gender and Sector 18 2.19 Unemployment Rate, Overall and by Gender: International Comparisons 19 2.20 Unemployment Rate by Age and Gender 19 2.21 Unemployment Rate in Libya by Gender and Educational Level 21 2.22 Unemployment Rates by Tertiary Enrollment: International Comparisons 21 2.23 Libya’s Tertiary Enrollment over Time: Total and by Gender, 1992–2003 22 2.24 Youth Unemployment Rate Overall and by Gender 22 3.1 Main Labor Market Actors and Institutions in Libya, 2014 26 4.1 Primary Occupations among Employed Respondents by Type 34 4.2 Level of Job Search Interest by Job Type Preference 35 4.3 Job Search Preferences by Job Type 36 4.4 Average Self-Rated Score by Skill Level among Libyan Job Seekers 37 4.5 Job Seeker Profiles among the Unemployed 40 4.6 Self-Reported Income by Gender 43 5.1 Sectoral Contribution to GDP, 2011 46 5.2 Libya’s Level of Economic Recovery Relative to Preconflict Growth by Sector 49 Labor Market Dynamics in Libya • http://dx.doi.org/10.1596/978-1-4648-0566-0 viii Contents 5.3 Perspectives of Growth over six Months versus two Years 50 5.4 Perspectives of Growth over the Next Six Months by Sector 51 5.5 Libyan Firms’ Demands for Services from Chambers of Commerce, 2012 51 5.6 Libyan Firms Reporting Hiring Nationals versus Foreign Workers by Occupation 53 5.7 Ease of Retention of Libyan Nationals by Economic Sector, Size, and Type of Firm 54 5.8 Likelihood of Recruitment by Level of Education and Previous Work Experience 55 5.9 Skills Most in Demand versus Most Difficult to Recruit 55 5.10 Libyan Firms Advocating for Labor Code Reforms by Type of Reform 57 6.1 Policy Pathway to Jobs and Reintegration for Libya 60 C.1 Public-Private Job Training and Placement Framework 79 Map 2.1 Unemployment Rate in Libya by Governorate 20 Tables 2.1 Summary of Key Labor Market Indicators 6 4.1 Respondents’ Employment Status by Educational Level 32 4.2 Respondents’ Employment Status by Gender 32 4.3 Respondents’ Employment Status by Previous Work Experience (of at least one year) 32 B4.1.1 Respondents’ Employment Status by City 33 4.4 Respondents’ Receiving Family Support by Type and Level 35 4.5 Respondents’ Living Arrangements by Marital Status 35 4.6 Distribution of Respondents’ Skills by Level 38 4.7 Proportion of Self-Rated Highly Skilled Respondents (%) 38 B5.1.1 Sectors Assessed by Total Number of Firms and Employees 46 5.1 Active Labor Force by Economic Sector in Libya, 2011 47 6.1 Summary of Policy Recommendations for Libya 62 A.1 Population Groups Included in Rapid Assessment 71 A.2 Research Locations and Gender Balance 72 A.3 Interviewed Firms and Locations 73 B.1 Structure of Supply-Side (Job-seekers’) Questionnaire 77 B.2 Structure of Demand-Side (Firms’) Questionnaire 78 Labor Market Dynamics in Libya • http://dx.doi.org/10.1596/978-1-4648-0566-0 Acknowledgments This policy note was developed as part of the World Bank’s Libya Employment and Skills Technical Assistance Program.
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