Unemployment

Measuring Unemployment Rate

Employed
– did any work for pay or profit during the survey week
– temporarily absent from regular job because of
illness, vacation, bad weather, etc
Unemployed
– laid off, actively looking for a job, waiting to start
new job
Not in the labor force
– full-time students, homemakers, retirees
– discouraged workers - people without jobs who gave up
looking for work after an unsuccessful search
 ILO Definitions
Employed: Mauritians aged 16 years and above (16+) who
have worked for pay, profit or family gain for at least
one hour during the reference week of a month.

It includes those who are temporarily absent from

work for reasons such as leave with pay, leave
without pay and temporary disorganisation of work
(bad weather, break down of equipment, lack of
order, etc.).
 Population and Labor Force
Labor Force Participation Rate =
Labor Force
Working Age Population Under 16
and/or 74,700,000
Unemployment Rate = institutionalized
Unemployed
Not in
Employed + Unemployed labor 71,400,000
Total force
Population
288,600,000 134,200,000

Employed Labor
Labor force = force
Employed + Unemployed 142,500,000

Unemployed 8,300,000
 Number unemployed
Unemployment rate =  100
Labor force
 Unemployment in Mauritius
Unemployment

Change
Q1 2016 Q4 2016 Q1 2017 Q1 2017 Q1 2017
Unemployment - Q1 2016 - Q4 2016

Both sexes 43,500 38,900 44,300 +800 +5,400

Male 17,200 13,200 17,700 +500 4,500

Female 26,300 25,700 26,600 +300 +900

Unemployment rate (%)

Both sexes 7.6 6.6 7.6 0.0 +1.0

Male 4.9 3.7 5.0 +0.1 +1.3

Female 11.7 11.3 11.7 0.0 +0.4

 Youth Unemployment
Change
Q1 2016 Q4 2016 Q1 2017 Q1 2017 Q1 2017
Youth unemployment - Q1 2016 - Q4 2016

Both sexes 18,700 18,300 22,200 +3,500 +3,900

Male 8,500 6,900 9,700 +1,200 +2,800

Female 10,200 11,400 12,500 +2,300 +1,100

Youth unemployment rate (%)

Both sexes 24.2 22.4 28.9 +4.7 +6.5

Male 19.3 15.0 22.5 +3.2 +7.5

Female 30.7 31.8 37.1 +6.4 +5.3

 Youth Unemployment
• At the first quarter 2017, youth unemployed aged 16 to 24 years
numbered 22,200 (9,700 males and 12,500 females) compared to
18,300 (6,900 males and 11,400 females) at the previous quarter
and 18,700 (8,500 males and 10,200 females) at the corresponding
quarter of 2016.
• The youth unemployment rate increased by 4.7 percentage points
from 24.2% in the first quarter 2016 to 28.9% in the first quarter
2017. During the same period, the youth unemployment rate for both
male and female increased by 3.2 percentage points to 22.5% and
by 6.4 percentage points to 37.1%.
• Compared to the previous quarter, the youth unemployment rate
increased by 6.5 percentage points from 22.4% to 28.9% with
increases of 7.5 percentage points in the male youth unemployment
rate and 5.3 percentage point in the female youth unemployment
rate.
 Unemployment Rate by educational
attainment

• Unemployment level is lowest among those with a

tertiary qualification, and
• Highest among those holding the HSC 9
Unemployed women are more
qualified than unemployed men
(2014)
• 52% of unemployed
women possessed the SC
or higher qualification
40
against 40% for men
52
• Similarly a higher
proportion of the
SC
unemployed women held
Form I to V
a tertiary qualification,
20% against 13% for men
• One quarter of the male
unemployed had only the
CPE as highest
educational attainment
against 18% for
unemployed women
10
 Evolution of employment by
sectors, 2000 - 2014
• The share of the primary and
Share of employment by sector
100%
secondary sectors have
90%
regressed over the years in favour
80%
of the tertiary sector
49.0 Tertiary
70% 62.2

60% • In terms of number, employment

50% change, 2000 to 2014
40% Secondary
• Primary sector 13,000
38.6
30%
• Secondary sector 23,000
29.4
20% • Tertiary sector 110,000
10% Primary
12.4
8.4
0%
2000 2014

Primary : Agriculture & fishing and mining &quarrying

Secondary : Manufacturing and electricity, gas & water, Construction
Tertiary : Other services industry groups

11
 Why Unemployment
Rate Measure
Underestimates true
Unemployment rate?

• Many of the “employed” are

under-employed (work part time)
• Discouraged workers are not
counted as “unemployed”, they
are counted as “not in the labor
force”
 Discouraged workers: Example
• Suppose labor force = 100 workers:
– 95 employed 5 unemployed
– Unemployment rate: 5/100 = 5%
• Economic downturn occurs, 5 more
workers lose jobs:
– True unemployment rate is 10/100 = 10%.
• After a period of time, 3 of these
unemployed workers become "discouraged"
and stop looking for work:
– They are out of the labor force, no longer among
unemployed.
– Unemployment rate as reported by the Department of
Labor is 7/97=7.1%.
• Downward-biased estimate of true
unemployment rate
 THREE TYPES OF UNEMPLOYMENT
1. Frictional unemployment:
• Workers with marketable skills between
jobs, searching for better jobs (actors,
contractors, seasonal workers)
• Sometimes called “search unemployment”
• Largely voluntary
• Normal labor market turnover
• Ways to reduce: provide more and
better information to employees and
employers – job banks
 THREE TYPES OF UNEMPLOYMENT
2. Structural unemployment:
• Mismatch between workers looking for jobs and
vacancies available
• Ex: shortage of nurses, surplus of labor in information
technology, programmers can not easily become nurses
• Lower demand for some skills arises because of:
– technological progress (typists, bank tellers, actors
replaced by computer animation)
– change in tastes for output
– outsourcing of jobs to foreign countries
(manufacturing jobs)
– racial discrimination
– persistent unemployment makes skills obsolete
• Ways to reduce: workers have to be retrained or
move to areas where their skills are in demand
 THREE TYPES OF UNEMPLOYMENT
3. Cyclical Unemployment:
• Year-to-year fluctuations in
unemployment associated with business
cycles (recessions, expansions)
• Unemployment fluctuates around its
“natural” (full employment) rate
• Recession: incomes and spending decline,
workers laid off
• The number of unemployed workers
exceeds the number of job vacancies, so
that if even all open jobs were filled,
some workers would remain unemployed
• Ways to reduce: Government fiscal and
 Cost of Unemployment
• Loss of potential output, waste of
available labor resources
• Workers pushed to accept jobs that do
not match skills – resources are not
efficiently allocated in the society
• Increased poverty, homelessness
• Rise in crime and suicide
• Political instability
• Health problems (incl. mental, self-
esteem)
• Rising household debt
• Rising cost of unemployment
compensations and food stamps