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Disparity continues in the generation of employment in the world

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Disparity continues in the generation of employment in the world

Mutually reinforcing crises are disproportionately affecting developing nations, exacerbating employment disparities between high- and low-income countries, says the latest report from the International Labor Organization (ILO).

Global unemployment is projected to fall to pre-COVID-19 levels by 2023, to 191 million people, an overall rate of 5.3%, but with low-income countries far behind in the recovery process.

The ILO considers low-income countries in Africa and the Arab region unlikely to regain pre-pandemic employment levels this year.

The 2023 unemployment rate for North Africa is estimated to be 11.2% (10.9% in 2019), with 6.3% for Sub-Saharan Africa (5.7% in 2019), and 9.3% for the Arab States (8.7% in 2019).

Other regions have managed to reduce their rates substantially, below pre-crisis levels, and this is the case of Latin America and the Caribbean. It also occurs in Northern, Southern and Western Europe, with an estimated 6.3% (7% in 2019) and in Central and Western Asia, where unemployment is estimated at 7.8% (9.2% immediately before the pandemic).

In North America there is a similarity in the figures for 2019 and 2023, with unemployment of 3.9% in 2019 and an estimated 4% in 2023.

Low income

The report underscores that debt-stressed low-income countries face a very high employment gap, as high as 25%, compared with 11% in developing countries with low risk of debt distress.

This debt crisis exacerbates the difficulties faced as a result of the pandemic and fueled by situations such as the war in Ukraine and other armed conflicts, interruptions in trade and food supply chains, and inflation in that area and in energy products. .

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Beyond unemployment rates, a new indicator developed by the ILO, the employment gap, offers a more comprehensive measure of unmet demand for employment, particularly in developing countries. Includes all people who would like to work, but do not have a job.

Low-income countries face the highest employment gap rate, at an alarming 21.5%; in middle-income countries it is just over 11%, with high-income countries having the lowest rates at 8.2%.

In addition, low-income nations are the only group of countries that have recorded a long-term increase in the employment gap rate, from 19.1% in 2005 to 21.5%.

For developing countries, financial and fiscal difficulties hamper responses to complex threats such as conflicts, catastrophes and mutually reinforcing economic crises (polycrises), exacerbating the employment gap.

social protection

The study also shows significant deficiencies in social protection policies in developing countries and provides new evidence that greater investment in this area would bring economic, social and employment benefits, and would reduce the global employment gap.

The issue of basic old-age pensions is analyzed, especially in low-middle-income and low-income countries, where only 38.6% and 23.2% of the elderly receive a pension, respectively, compared to 77 .5% globally.

The introduction of an old-age pension in developing countries would increase their gross domestic product (GDP) per capita by 14.8% in 10 years, the ILO projects.

In addition, it would reduce extreme poverty (the percentage of people living on less than $2.15 a day) by six percentage points, a drastic reduction from the current rate of 15.5%.

Financing social protection is difficult, but not impossible, the report argues. For developing countries, the annual cost of old-age pensions at the level of the national poverty lines would be equivalent to 1.6 percent of their GDP.

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The report, finally, highlights the vital importance of creating fiscal space for social investments in low-income countries, which must be urgently considered as part of the current discussion on the reform of the international financial architecture.


The number of unemployed in the world will be reduced by 1 million in 2023, according to forecasts by the International Labor Organization (ILO).

“According to projections based on the most recent ILO estimates, the global unemployment rate will fall by 0.1 percentage points in 2023” to reach a rate of 5.3%, the Geneva-based organization said.

The number of unemployed people will thus be reduced from 192 million in 2022 to 191 million in 2023, contrary to what the United Nations agency predicted a few months ago. In mid-January, the ILO calculated that there would be three million more unemployed this year.

This improvement in forecasts, however, reflects “greater-than-expected resilience in high-income countries, and not a generalized recovery,” warned the specialized United Nations agency.

The Latin American and Caribbean region is doing well and belongs to the block of world regions that managed to reduce their unemployment rates “below pre-crisis levels” of Covid-19, the ILO stressed.

This is also the case in Northern, Western and Southern Europe, as well as Central and Western Asia.

By contrast, other regions such as North Africa, Sub-Saharan Africa and some Arab states have not yet returned to pre-crisis levels.

Latin America

In Latin America and the Caribbean, the unemployment rate fell from 8% in 2019 to 7% in 2022 and will drop to 6.7% in 2023, according to the report.

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The ILO’s 2022 labor outlook, published in February, however, highlighted the low quality of employment in the region and the effects of inflation on wages.

Informal jobs represented between 40 and 80% of the jobs generated between the third quarter of 2020 and the third quarter of 2022, said the document published in February.

Countries whose unemployment rates have not fallen to 2019 levels, and particularly the most indebted ones, “urgently need international assistance and multilateral coordination to address persistent employment deficits and growing inequalities,” the ILO urged.

The international organization’s call comes three weeks after the “Summit for a new global financial pact”, which will take place on June 22 and 23 in Paris. The meeting will give new impetus to discussions on financial solidarity mechanisms between developed countries and vulnerable states.

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