Economic activity framework

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1 CHAPTER 7 LABOR MARKET ACTIVITIES Background Economic activity and employment are shaped by many factors, including the size of the ing-age, educational and skill level of the labor force, and availability of economic resources and access to employment. Integrating factors into economic and social development strategies is vital to achieving sustainable development outcomes and improving the quality of life. In order to pursue such objectives, Marshall Islands policy-makers and planners and their development partners require quality data on economic and labor market activities such as employment and unemployment and the size and characteristics of the labor force, as well as information about those not in the labor force. This information is of fundamental importance because it provides an indication of the size of the labor supply for the production of goods and services in a country, and provides much needed benchmarks and baseline information against which to measure people s general well-being and standard of living and monitor development progress. To provide this information, and housing censuses include a series of standard questions on economic activities undertaken by people over 15 years of age 1. The Marshall Islands 2011 census included questions on the following: Work for pay covers people ing for wages, salary, on commission, on a contract, or operating a business. The person is either a government or private employee, an employer, or self-employed. Voluntary and unpaid family applies to people who but do not receive a wage, salary, commission or do not have a contract, including people doing voluntary for their communities, their church and other NGOs. Work to support the household by producing goods for sale includes all people who perform a variety of tasks, such as fishing, farming, gardening, producing handicrafts and other products for sale to support the household. Work to support the household by producing goods for own consumption includes people who fish, farm, plant food gardens or produce other goods for household consumption only; these activities are generally referred to as subsistence activities. Economic activity frame While the international standard ing age is referred to as 15 64, the Marshallese ing age, as in many countries in the Pacific, refers to everyone over 15 years of age whether they are in the labor force or not. The labor force comprises people who are either employed or unemployed; people not in the labor force comprise home-makers (housewives), full-time students, retired people, and those too ill or disabled to. 1 The original census questionnaire design also made provision to capture people not in the labor force, such as home-makers (housewives), full-time students, retired people, and those too ill or disabled to ; it was also meant to cover unemployment. Unfortunately, a misplaced skip instruction in the final questionnaire, which eluded everyone s attention, made it impossible to obtain accurate information on people not in the Labor force and those unemployed. To rectify this situation, SPC and EPPSO conducted a mini labor force survey on Majuro and Ebeye in September 2012, with a full report expected to be available in April

2 Figure 7.1: RMI labor force frame, 2011 Marshall Islands ,158 Marshall Islands of ing age (15 years and over) 31,905 Labor force Not in the labor force 1 Paid 11,932 Employed 12,647 Unpaid 715 Unemployed 1 Home duties Student Retired Sick or disabled not interested in ing Formal employment 9,395 Voluntary / unpaid family 380 Producing goods for sale 2,537 Producing goods for own consumption 335 Note [1]: 19,258 people are either not in the labour force, or are unemployed. Given a design fault in the questionnnaire as previously allueded to, the exact number of both categories cannot be determined. To resolve this impasse, a labor force survey was conducted in September 2012, with results expected in April People of ing age background characteristics Out of the Marshall Islands total 2011 (53,158), 60 percent were in the ing age (31,905). This number included 59 percent of all males (16,205) and 61 percent of all females (15,700). In comparison to the 1999 census, the ing age increased by 11 percent. Table 7.1 shows the ing age distribution by age, sex and region

3 Table 7.1: Percentage distribution of the ing aged 15 and over by background characteristics, Marshall Islands 2011 Age group Males (%) Females (%) Persons (%) Region Urban Rural Total Thirty percent of the ing age were between 20 and 29 years of age in 2011 and two-thirds were aged between 15 and 39 years. More than three-quarters of the ing age lived in urban areas (Kwajalein and Majuro atolls) and less than one-quarter on the other islands/atolls of the Marshall Islands. There were no marked gender differences in the composition of the ing age regarding age or urban-rural location. Employed Employment is defined as either paid or self-employed during a specified brief period of either one week or one day. Under this definition, the International Labor Organization (ILO) includes persons who: performed some for wage or salary in cash or in kind; had a formal attachment to their job but were temporarily not at during the reference period; performed some for profit or family gain in cash or in kind; or were with an enterprise such as a business, farm or service but were temporarily not at during the reference period for any specific reason. This definition also includes everyone involved in subsistence or unpaid family or village. ILO states that persons engaged in economic activities in the form of own account production of goods for own final use within the same household should be considered to be self-employed. Unpaid village, such as when young people receive food from the community for their endeavours, is also considered to be employment, in as far as these people performed some for payment in kind. In the Marshall Islands, employment refers to paid and unpaid, with for pay, relating to, employers, self-employed people, and everyone producing goods for sale; unpaid, relating to people involved in voluntary, unpaid family or community, or in production of goods for their own consumption (engaged in subsistence activities)

4 The 2011 census recorded 12,647 people as employed, which represents 40 percent of the Marshall Islands ing age (Table 7.2). Of these, 65 percent were males and 35 percent were females. This contrasts with 19,258 people classified as not in the labor force or unemployed. This means only 4 out of 10 people aged 15 and over are employed, ing in either paid or unpaid employment. Though small, it is worth noting that this proportion has increased by a modest 4 percent since the 1999 census. There was a distinct gender differential in economic activity in 2011, with 51 percent of all men of ing age engaged in either paid or unpaid, compared to 28 percent of women of ing age. A similar pattern prevailed in 1999, where only one of every five women of ing age was employed (22%), compared to one in two men (48%). Despite a small increase in female participation in employment, developments since 1999 would suggest that the Marshalls Islands are a long way from reaching employment gender parity. The vast majority (94%) of the employed Marshallese ed in paid employment (11,932), with the private sector employing 41 percent of paid ahead of the government sector (35%). Males (65%) are more prevalent than females (35%) in all forms of paid employment, particularly in private and government employment where males held 69 percent of posts in 2011 in both cases. The smallest sex difference in paid employment in 2011 emerged amongst people involved in producing goods for sale (54% males and 46% females). Only a small proportion (5.6%) of employed Marshallese are engaged in unpaid, either producing goods for their own consumption (2.6%), undertaking volunteer (2.2%) or ing without pay in a family business (0.8%). Across all three categories, men out-numbered women, with their representation most pronounced in the categories of producing goods for their own consumption (75%) and undertaking volunteer (63%). Between 1999 to 2011, formal employment, that is paid employment in both the private and government sector, increased by 1,848, with public sector growth (1,074) ahead of job creation in the private sector (772). Mirroring earlier observations about gender differentials, the number of women ing for the RMI government grew by 439 while the number of male grew by 635 (Table 7.3). A similar pattern emerged in the private sector where the number of female ers increased by 291 compared to 481 for males. These figures translate into sex ratios of 145 (public sector) and 165 (private sector), showing employment growth clearly favouring males over females and also that the public sector performed slightly better than the private sector in reducing the employment gender gap during the recent inter-censal period

5 Table 7.2: Economic activity by sex for aged 15 and older, Marshall Islands 2011 Economic activity Persons % Males % Females % % Male % Female Employed - paid (private) (government) Self-employed without any Employer with one or more 4, , , , , , Producing goods for sale 2, , , Total employed - paid Employed - unpaid 11, , , Volunteer Unpaid in a family business Producing goods for personal consumption Total employed - unpaid Total employed 12, , , Total economically not active and unemployed Total ing age 19, , , , , , Table 7.3: Growth in number of private and public paid by sex, Employed - paid Persons Males Females (private) (government) , Turning to the 15 to 24 age group, Table 7.4 shows that only 15 percent of this age group were employed, with employment rates of 20 percent for males and 11 percent for females. The private sector employed 44 percent of paid followed by 32 percent in production of goods for sale, with the government as the thirdplaced employer for this age group (22%, as compared to 35% for the total ing age aged 15 years and over). However, 38 percent of government aged 15 to 24 were female (as opposed to 31% for the total ing age aged 15 years and over). Producing goods for personal consumption employed 50 percent of those aged 15 to 24 years in the unpaid sector, with 35 percent of those in the unpaid sector employed in the voluntary sector

6 Table 7.4: Economic activity by sex for aged between 15 and 24, Marshall Islands 2011 Economic Activity Persons % Males % Females % % Male % Female Employed - paid (private) (government) Self-employed without any Employer with one or more Producing goods for sale Total employed - paid Employed - unpaid 1, Volunteer Unpaid in a family business Producing goods for personal consumption Total employed - unpaid Total employed 1, Total economically not active and unemployed 8, , , Total ing age 9, , ,

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