labor market final

7/31/2019 Labor Market Final

1/35


2/35

The Basic Concepts


3/35

Basic Concepts

Employed = any person 16 years or older (1) who works for pay, either for someoneelse or in his or her own business for 1 or more hours per week; One who works without pay for 15 or more

hours per week in a family enterprise;

One who has a job but has been temporarilyabsent with or without pay.


4/35

Basic Concepts

Unemployed = A person 16 years old or older who is not working, is available for work, and has made specific efforts to findwork during the previous 4 weeks.


5/35

Basic Concepts

Not in the labor force = A person who isnot looking for work because he or shedoes not want a job or has given uplooking.


6/35

Basic Concepts

Labor Force = Employed + Unemployed Population = labor force + not in the labor

force


7/35

Basic Concepts

Unemployment rate =unemployed/(employed + unemployed)


8/35

Types of Unemployment

Frictional unemployment The portion of unemployment that is due to

the normal working of the labor market; usedto denote short-run job/skill matchingproblems.


9/35


Structural unemployment The portion of unemployment that is due to

the changes in the structure of the economythat result in a significant loss of jobs incertain industries.


10/35


Cyclical unemployment The increase in unemployment that occurs

during recessions and depressions.


11/35

Labor Supply and DemandCurve

S

D0 D1

UNITS OF LABOR

W A G E R A T E

W0

W1

L0 L1


12/35

Sticky Wages

S

D0 D1

UNITS OF LABOR

W A G E R A T E

W0

W*

L0 L*L1

UNEMPLOYMENT


13/35

Social/Implicit and Explicit Contracts

Social/Implicit Contracts - Unspokenagreements between workers and firmsthat firms will not cut wages. It is one of the explanations of downwardly stickywages.

Explicit Contracts Employment contractsthat stipulate workers wages, usually for aperiod of 1 to 3 years. Wages set this waydo not fluctuate with economic conditions.


14/35

The Phillips Curve


15/35

Current Labor Market

in the Philippines


16/35

Labor Force Participation Rate


17/35

Labor Force Participation Rate

Philippines April 2009 April 2008

Population 15 years and over (x1000) 59,074 57,700

Labor Force Participation Rate (%)(i.e. students, retirees) LFpop = U + E 37,807 (64%) 36,466 (63.2%)

Employment Rate (%) 34,971 (92.5%) 36, 465(92.0%)

Unemployment Rate (%) 2,835 (7.5%) 2,917 (8.0%)

Underemployment Rate (%)(i.e. underutilized workers, hidden unemployment) 6,609 (18.9% of E) 7,220 (19.8% of E)


18/35

Labor Market Facts The National Capital Region (NCR) has the

lowest employment rate (86.5%) and the highestunemployment rate at (13.5%).

The ARMM has the highest employment rate(98.5%) and the lowest unemployment rate(1.5%)

Other regions that registered an employmentrate below the national estimate of 92.5% are:

Ilocos Region (91.7%) Central Luzon (91.5%) Calabarzon (90.1%) Western Visayas (92.1%)


19/35

Labor Market Facts Wholesale and retail

trade, repair of motor vehicles, motorcycles andpersonal and householdgoods sub-sector makeup the largest sub-sector in services (19.1%)

Agriculture, hunting andforestry sub-sector makeup the largest sub-sector

in Agriculture (31.0%) Manufacturing makes upthe largest sub-sector inIndustry (8.1%)

15% 50%

35%

Services

Agriculture

Industry


20/35


21/35

Employment and Unemploymentin the Philippines

47,185 48,40549,839

51,28052,676

53,975 55,24856,145 57,389

58,657

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Population 15 years andover (x1000)

Participation Rate(x1000)

Employment Rate(x1000)

Unemployment Rate(x1000)

Underemployment Rate(x1000)


22/35

Employment and UnemploymentGrowth Rates

2.59 2.96 2.89 2.72 2.47 2.36 1.62 2.22 2.21

-40

-30

-20

-10

0

10

20

30

2001 2002 2003 2004 2005 2006 2007 2008 2009

Population 15 years andover (x1000)

Participation Rate(x1000)

Employment Rate(x1000)

Unemployment Rate(x1000)


23/35

Role/Contribution of Remittances

in the Philippine Economy


24/35

Remittances in the Philippines Remittances contribute as much as 10% to GNP The Philippines has the third-highest rate of remittances

from overseas By 2008, there were an estimated 2 million overseas

Filipino workers Monthly deployment since May 2008 has been more

than 100,000 From $6.0 billion in 2000, remittances reached $16.4

billion in 2008: an annual average growth rate of 13.3% Remittances continue to grow in 2009 despite the globalcrisis (although the growth rate is slower)


25/35

Remittances to the Philippines(in Thousands of US Dollars)

Country 2000 2001 2002 2003 2004

TOTAL 6,050,450 6,031,271 6,886,156 7,578,458 8,550,371

Landbased 5,123,773 4,937,922 5,686,973 6,280,235 7,085,441

Seabased 926,677 1,093,349 1,199,183 1,298,223 1,464,930

Asia 831,770 1,049,551 1,116,336 894,310 918,329

Americas 4,000,022 3,300,327 3,537,768 4,370,705 5,023,803

Oceania 21,360 21,188 34,793 44,470 42,600

Europe 534,684 406,194 889,094 1,040,562 1,286,130

Middle East 594,198 711,918 1,242,809 1,166,376 1,232,069

Africa 4,450 3,600 3,959 11,371 3,439

Others 63,966 538,493 61,397 50,664 44,001


26/35

Remittances to the Philippines(in Thousands of US Dollars)

Country 2005 2006 2007 2008

TOTAL 10,689,005 12,761,308 14,449,928 16,426,854

Landbased 9,019,647 10,812,018 12,213,565 13,392,301

Seabased 1,669,358 1,949,290 2,236,363 3,034,553

Asia 1,172,373 1,496,120 1,543,173 1,883,996

Americas 6,605,231 7,198,212 8,244,344 9,213,372

Oceania 54,573 85,610 121,417 149,423

Europe 1,433,933 2,061,067 2,351,704 2,658,726

Middle East 1,417,491 1,909,208 2,172,417 2,502,639

Africa 4,517 10,272 16,027 17,746

Others 887 819 846 952


27/35

Labor Market

Cross-Country Analysis


28/35

Total Population Ages 15-64 andTotal Labor Force, 2007

Source: World Bank data files


29/35

Labor Force Participation Rates (aged 15-64), Male and Female, 2003

Source: ADB Key Indicators 2009


30/35

Unemployment Rate: 2006 to 2009 (1 st Qrt.)

Source: ADB Key Indicators 2009


31/35

Labor Force by Economic Activity(Employment Share by Sector)

Source: World Bank Statistics


32/35

Selected Labor MarketPolicies and Practices

Labor Unions Minimum Wages Contract Workers

Indonesia Trade Union Act of 2000

$32.8 per mo 2003Daily = $1.09 (32.8/30)

Hire workers on contractbasis

Malaysia Strong labor unions No minimum wages. Only forcinema workers

$40.79 per mo 2003

Employment Act 1955 contracts for more than

one month must be inwriting

Philippines Labor Code providesright to organize, setCBA and to stagestrike

$4.88 day 2003 (P250 basicincluding P15 living allowance)

Rampant subcontracting,agency hiring and use of house workers

Thailand 2-5% unionized,unions have littlepower

$3.20 per day Employs temporarycontract labor

Vietnam Only 10% of workersare unionized

S18.70 per mo (for laborersworking under the Stateenterprises)

$0.62 per day (18.7/30)

Weak compliance toLabor Code


33/35

Current Labor Challenges and Issues

Impact of global economic crisis higherunemployment, reduced hours of work, lowerearnings, higher informality Labor supply growth Asias labor supply to growabout 1.3% annually (ILO)Globalization, technical change and competitionWage-setting policies, regulations affecting hiringand firingTaxes on labor and social securityInformal and formal employment


34/35

Data Sources BPS-Statistics Indonesia ( www.bps.go.id ) Department of Statistics Malaysia ( www.statistics.gov.my/eng/ ) National Statistics Office ( www.census.gov.ph ) National Statistical Office (web.nso.go.th)

General Statistics Office of Viet Nam ( www.gso.gov.vn/ ) Bangko Sentral ng Pilipinas ( http://www.bsp.gov.ph/ ) Asian Development Bank ( http://www.adb.org/ ) Wikipedia ( http://en.wikipedia.org/ )
http://www.bps.go.id/http://www.statistics.gov.my/eng/http://www.census.gov.ph/http://www.gso.gov.vn/http://www.bsp.gov.ph/http://www.adb.org/http://en.wikipedia.org/http://en.wikipedia.org/http://www.adb.org/http://www.bsp.gov.ph/http://www.gso.gov.vn/http://www.census.gov.ph/http://www.statistics.gov.my/eng/http://www.bps.go.id/


35/35

THE END!

labor market final

Documents