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The Occupied Palestinian Territory: an Employment Diagnostic Studypdf International Labour Organization THE OCCUPIED PALESTINIAN TERRITORY AN EMPLOYMENT DIAGNOSTIC STUDY REGIONAL OFFICE FOR ARAB STATES THE OCCUPIED PALESTINIAN TERRITORY AN EMPLOYMENT DIAGNOSTIC STUDY REGIONAL OFFICE FOR ARAB STATES Copyright © International Labour Organization 2018 First published 2018 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to ILO Publications (Rights and Licensing), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: [email protected]. The International Labour Office welcomes such applications. Libraries, institutions and other users registered with reproduction rights organizations may make copies in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. The Occupied Palestinian Territory: An Employment Diagnostic Study / International Labour Organization, Regional Office for Arab States. - Beirut: ILO, 2018. ISBN 9789221313953 (print) ISBN 9789221313960 (web pdf) ILO Regional Office for Arab States The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. Information on ILO publications and digital products can be found at: www.ilo.org/publns ILO Regional Office for Arab States publications can be found at: www.ilo.org/arabstates TABLE OF CONTENT ACKNOWLEDGEMENTS 7 ABBREVIATIONS 8 1. EXECUTIVE SUMMARY 10 2. INTRODUCTION 18 2.1 Methods & Principles: Conducting Employment Diagnostic Analysis 20 2.2 Impact of Occupation and Conflict 21 2.3 Structure of this Report 22 3. ECONOMIC ENVIRONMENT AND FISCAL SPACE 23 3.1 Trends in Economic Growth and Poverty 24 3.2 Structure of the Economy and Sectoral GDP 26 3.3 Government Finance 28 4. DEMOGRAPHIC STRUCTURE 31 5. LABOUR FORCE CHARACTERISTICS AND UNEMPLOYMENT 34 5.1 Labour Force and Participation 35 5.2 Unemployment 39 5.3 Employment 45 5.4 Underemployment 53 5.5 Informality and Employment 54 5.6 Transition to work 55 5.7 Wages 56 5.8 Entrepreneurship 60 6. EDUCATION AND WORKFORCE DEVELOPMENT 63 6.1 Literacy and Educational Achievement 64 6.2 Post-secondary School Education 66 i. Academic Education: High Enrolment, High Unemployment 66 ii. Vocational Training: Developing Sound Policy and Programmes 67 6.3 Assessment of Workforce Development Needs 70 7. THE ENABLING ENVIRONMENT: LEGAL AND INSTITUTIONAL FRAMEWORK AND BUSINESS ENVIRONMENT 72 7.1 Laws and Regulations 73 i. Labour Law and Minimum Wage 73 ii. Social Security 75 iii. Tax Legislation 75 7.2 National Strategies and Employment Policies 76 i. National Policy Agenda 2017 - 2022 76 ii. Public Financial Management Strategy 78 iii. Labour Sector Strategy 2017 - 2022 78 iv. Social Protection Infrastructure 79 7.3 Workers’ and Employers’ Organisations 81 i. Labour Unions 81 ii. Chambers of Commerce, Industry and Agriculture 82 iii. Palestinian Federation of Industries 82 7.4 National Committee for Women’s Employment 83 7.5 Higher Council for Youth and Sports 84 7.6 Business Enabling Environment 84 8. ACTIVE LABOUR MARKET PROGRAMMES: A SURVEY AND ANALYSIS 88 8.1 Employment Programmes 89 8.2 Entrepreneurship and Small Business Assistance Programmes 91 i. Pre-incubation Programmes 91 ii. Incubation Programmes 91 iii. Business Accelerating Services 91 iv. Entrepreneurship Development Programmes 92 v. MSME Creation and Development Programmes 92 8.3 Employment Services, Training, and Market Linkage Programmes 93 i. Public Employment Services 93 8.4 Private Sector Employment Programmes 96 8.5 Poverty Alleviation Programmes 96 8.6 Technical, Vocational Education and Training (TVET) Support Programmes 97 8.7 Conclusions on ALMPs Impact and Effectiveness 98 i. General Conclusions 98 ii. Assessment of Entrepreneurship and Small Business Assistance Programmes 99 iii. Assessment of Employment services, training and linkage to market programmes 99 9. CONCLUSIONS AND KEY POLICY SUGGESTIONS 101 9.1 Overall conclusions and recommended directions 102 9.2 Recommendations 104 10. REFERENCES 109 11. APPENDIX I: LIST OF STAKEHOLDERS INTERVIEWED 111 12. APPENDIX II: MAIN ALMPS IN THE OPT: SERVICES AND TARGET GROUPS 112 CHARTS FIGURE 1 - Real GDP (US$ billion, 2004 prices) in the OPT by region, 1994-2016 25 FIGURE 2 - Real GDP growth in the OPT by region, 1995-2016 25 FIGURE 3 - Employment growth in the OPT, 2013-2016 26 FIGURE 4 - Value of exports, imports and net trade balance (in US$ million), 1994-2016 28 FIGURE 5 - Annual number of jobs to be created for newcomers, 2015-2050 (thousands) 33 FIGURE 6 - Percentage distribution of the working age population (15+) by labour force status, sex and age, 2016 35 FIGURE 7 - Labour force participation rate (age 15+), 2000-2016 36 FIGURE 8 - Labour force participation rate for individuals 15+ years, by region and sex, (%), 2000-2016 37 FIGURE 9 - Labour force participation rate of individuals aged 15 years and above in the OPT by sex and age, (%), 2016 38 FIGURE 10 - Percentage distribution of labour force participants (15+) by sex, region and years of schooling, 2016 39 FIGURE 11 - Unemployment rate among labour force participants (15+) by region, 2000-2016 40 FIGURE 12 - Proportion of long-term unemployment (12 months and above) in total and youth unemployment in the OPT by region and sex, (%), 2016 41 FIGURE 13 - Unemployment rates (15+) by sex, 2000-2016 41 FIGURE 14 - Percentage distribution of unemployed individuals (15+) by sex, region and years of schooling, 2016 42 FIGURE 15 - Unemployment rate among labour force participants (15+) by age and sex, 2016 42 FIGURE 16 - Unemployment rate for graduates who hold an associate diploma certificate or above in by specialization and region, 2016 43 FIGURE 17 - Employment rate in the OPT, (%), 2000-2016 46 FIGURE 18 - Number (in thousands) of employed persons (15+) by region, 2000-2016 46 FIGURE 19 - Growth in employment (%) in the West Bank and Gaza, 2000-2016 47 FIGURE 20 - Percentage distribution of employed individuals (aged 15+) from the OPT by employment status, sex and region, 2016 48 FIGURE 21 - Percentage distribution of employed individuals (15+) by economic activity, 2000-2016 50 FIGURE 22 - Percentage distribution of employed individuals (15+) by sex, economic activity and region, 2016 51 FIGURE 23 - Underemployment by region as percentage of the labour force and employed persons (15+), 2005 - 2016 54 FIGURE 24 - Real change in CPI and average daily wages in the West Bank, 2004-2016 57 FIGURE 25 - Real change in CPI and average daily wages in Gaza, 2004-2016 57 FIGURE 26 - Average daily wage (ILS) for wage employees in the OPT by region and sector, 2006-2016 58 FIGURE 27- Average daily wage (ILS) in the OPT by economic sector of activity and sex, 2016 59 FIGURE 28 - Share of the private sector employed persons (%) earning less than the minimum wage in the OPT by region and sex, 2016 59 FIGURE 29 - Academic performance (%) of 4th graders in national exams 65 FIGURE 30 - Academic performance (%) of 10th graders in national exams 65 TABLES TABLE 1 - Contribution to GDP by economic activity in the OPT (%), 2010-2016 27 TABLE 2 - Public finance key indicators (2014-2017) ((US$ million)) 30 TABLE 3 - Persons outside the labour force (15+) by region, sex and reason (%), 2016 52 TABLE 4 - Action taken to find employment by sex, 2016 (% unemployed persons aged 15+) 56 TABLE 5 - TVET institutions by responsible authority 68 TABLE 6 - NPA 2017-2022 – Key policy priorities and interventions relevant to employment and the labour market 77 TABLE 7 - Alignment between Labour Sector Strategy 2017-2022 and NPA 79 TABLE 8 - Factors affecting investment climate in the OPT, by region 86 TABLE 9 - Main employment programmes, services and target groups 90 TABLE 10 - Policy Themes and Recommendations 106 ACKNOWLEDGEMENTS This study was prepared by Amer Madi, with support from Charmaine Seitz and Omar Abu Ghosh, under the guidance and supervision of Tariq Haq, Senior Employment Policy Specialist at the ILO Regional Office for Arab States. Valuable comments and feedback on previous iterations of the draft were received from Tariq Haq, Patrick Daru, Aya Jaafar, Rasha El Shurafa and Mounir Kleibo from the ILO, as well as Samer Salameh from the Palestinian Authority’s Ministry of Labour. Thanks are also due to participants of a tripartite national consultation on the draft study held in Ramallah on 4 July 2017. 7 ACRONYMS AFD French Agency for Development ALO Arab Labour Organization ALMP Active Labour Market Programme BSIS Business Start-up Incubators Support BTC Belgian Technical Cooperation
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