Labour Market Assessment

More than 60,000 people seek work each year, less than 30,000 demand labor: study says

The Regional Office for Arab States at the International Labour Organization (ILO) launched a study on the labor market in Lebanon prepared by the Consultation and Research Institute (CRI).

The study, titled ‘Review and Assessment of Labour Market Information’, identified the characteristics of the local labour force presenting general indicators (based on the Central Administration of Statistics (CAS)’ household living conditions survey, 2004). It also presented an overview on the trends of the labour supply and demand.

The report estimated the active population at around 1.2 million, with a male activity rate of 68 percent.
It estimated the yearly labour supply (from universities, vocational institutions, and schools) to stand at 61,200 individuals seeking work, and the yearly labour demand (from new and existing establishments) at 25,900 workers.
The study took into account a yearly migration of 13,500, and thus estimated the total net yearly gap (between demand and supply) at 21,800.

According to the study, when adding the stock of unemployed (medium scenario 144,500) the gap between labour supply and demand is estimated to increase to 166,350 unemployed.

“The gap between supply and demand results mainly from a mismatch between an increasingly educated labour supply and an underdeveloped economic structure consisting mainly of micro and small enterprises,” the report said. It said that around 90 percent of enterprises employ less than four workers.

According to the report, the poor quality of education, mainly in the vocational and technical education, affects the labour market.

The report said that the government lacks the capacity to formulate labour market and employment policies due to the deficiency in human and financial resources in labour market related institutions.

The report also said that informal employment does not attract qualified workers and thus widens the gap between labour supply and demand. According to CRI estimates, 40 percent of employees are not registered in the National Social Security Fund.

The ILO launched the Public Employment Service (PES) project in 2008. The project supports the development and implementation of a Labour Market Information System (LMIS), a set of institutional procedures and mechanisms designed to produce labour market information.

The project is funded by the Canadian International Development Agency with a $2.2 million grant.