BEIRUT (ILO News) - The ILO Regional Office for Arab States has assessed the extent of informal employment and vulnerability among the most deprived Lebanese citizens, as well as Syrian and Palestinian refugees living in Lebanon, in light of the dire and rapidly deteriorating socio-economic conditions prevailing in the country.

The assessment is presented in the new report “Assessing Informality and Vulnerability among Disadvantaged Groups in Lebanon: A Survey of Lebanese, and Syrian and Palestinian Refugees,” which concludes with recommendations to improve the short and long-term prospects of the country’s labour market.

“Lebanon is in a critical state, facing a number of serious challenges that are presently affecting the employment and livelihoods of many people,” said ILO Regional Director for Arab States Ruba Jaradat.

“This report shows in very clear terms how currency depreciation, soaring levels of inflation and the COVID-19 pandemic have dealt multiple blows to Lebanon’s economy and labour market. These challenges were further compounded by last year’s Beirut port explosion, and have combined to deepen levels of vulnerability and informal employment among the country’s already distressed communities,” Jaradat said.

The report analyses representative survey data on employment and labour market conditions of three population groups. The ILO commissioned the Statistics Lebanon group to field responses from a sample of vulnerable households of Lebanese, Syrians and Palestinians living in the 251 most vulnerable cadastres in Lebanon. The report was developed under an ILO project funded by the Ford Foundation.

Main findings
The report begins with an executive summary (also available in Arabic) that outlines the main findings of the report, which found that, in terms of demographics, men represented 52.1 per cent of all surveyed individuals. Only 13 per cent of households were headed by a woman. On average, vulnerable households were comprised of 3.8 individuals.
Only 40.4 per cent among those aged 5–24 attended school during the current school cycle. Palestinian refugees recorded the highest enrolment rate at 53.8 per cent, followed by Lebanese (47 per cent) and Syrians (33 per cent).
The labour force participation rate – which measures the proportion of the working age population that is active in the labour market, be they employed or unemployed – stood at 39.7 per cent, with men (62.1 per cent) significantly more likely to participate in the labour force than women (15.5 per cent). Overall, Palestinians exhibited the lowest labour force participation rate, the lowest employment-to population ratio and the highest unemployment rates.

Concurrently, the total unemployment rate in the surveyed sample was high, reaching 33 per cent overall, with a slightly higher rate among women (37.2 per cent) than men (32 per cent).
Employed individuals were mostly concentrated in four sectors: “wholesale retail trade and motor vehicle repair” (29.6 per cent), “construction” (12.4 per cent), “manufacturing” (10.9 per cent), and “agriculture, forestry, and fishing” (8.8 per cent).

Youth registered a low labour force participation rate of 32.7 per cent compared with 42.5 per cent among adults aged 25 years and above. The share of youth not in employment, education or training (NEET) stood at 62.3 per cent, with a higher NEET rate among young women (72.1 per cent) than men (53 per cent). Syrian girls aged 15-24 registered a particularly high NEET rate of 86 per cent. Overall, young people aged 15–24 experienced high rates of long-term unemployment, with 14.6 per cent of the youth labour force having experienced periods of unemployment of 12 months or longer – the highest of all age groups.

The survey found very high rates of informality , with 77.8 per cent of total employment being informal, – or labour that is not subject to national labour legislation, income taxation, social protection or entitlements such as paid leave. Only 22.2 per cent of total employment in the sample could be described as formal, whereas 67.4 per cent of all employed individuals were working in the informal sector. Syrians and Palestinians recorded extremely high rates of informality – 95 per cent and 93.9 per cent, respectively. In comparison, 64.3 per cent of Lebanese workers from vulnerable households were in informal employment.

The report assessed the working conditions of Lebanon’s most disadvantaged workers. Some 54.7 per cent of all employed individuals in the sample were paid less than 750,000 Lebanese pounds (LBP) per month, with Lebanese workers earning relatively more than their Syrian and Palestinian counterparts. In the surveyed sample, 46.5 per cent of eligible employed individuals did not have a work contract.

In comparison with 50 per cent of Lebanese workers, over 90 per cent of the Palestinians and Syrians employed in the sample were not contributing to social security funds. The majority of eligible Palestinian and Syrian refugee workers (81 per cent and 91.2 per cent respectively) did not have access to paid annual leave, in comparison with 51 per cent of Lebanese.

Access to paid sick leave was also limited: 86.9 per cent of Syrians were not entitled to paid sick leave, compared with 76 per cent of Palestinians and 47.6 per cent of Lebanese. Lebanese women were more likely to benefit from paid maternity leave (41.1 per cent), than Syrian (8.1 per cent) or Palestinian women (8 per cent).

The COVID-19 pandemic combined with the economic crisis has had a significant impact on the Lebanese labour market, the report found. Among those employed by others, the majority (71.4 per cent) reported a decline in the number of hours worked; 63 per cent of them cited both the economic situation and the COVID-19 pandemic as reasons for this decline. Similarly, 89.1 per cent of those declared as self-employed reported lower levels of income, with 69.8 per cent of them attributing this decline to the compound effects of both the economic situation and the COVID-19 crisis.

The report assesses the changing demands of the Lebanese labour market, outlining how drastic changes in the marketplace have forced companies to adapt under duress, as the private sector faces an unprecedented liquidity crunch and local consumption dries up. Shifting towards a more productive and export-oriented economy may prove especially challenging, the report notes, given the import-dependent nature of the Lebanese economy and low levels of demand. Large established businesses are better able to adapt to the shifting labour market situation than small enterprises.

To bolster growth, education in Lebanon needs to orient away from classical options to in-demand specializations, with a focus not only on professional but also technical qualifications. Projected gaps in the Lebanese labour market require a greater orientation towards the information technology (IT) and knowledge industry, technical and vocational qualifications to update skills, and local and rural tourism, crafts and food production to meet local and national demand. Farmers should be trained on modern techniques, with particular reference to the environment and cost-saving measures.

The assessment makes recommendations for short- and long-term actions to assist the country’s most vulnerable workers and bolster the labour market. The report highlights the importance of establishing, in the short term, an unemployment insurance scheme, emergency support to small and medium sized enterprises, and increasing cash transfers and cash-for-work programmes.

Long-term measures the report recommends stress the importance of strengthening legal frameworks and protecting workers; promoting sustainable growth strategies, decent job creation and enterprise formalization; increasing women’s participation in the labour force, supporting efforts to reduce the share of youth not in employment, education or training; promoting inclusion of people with disabilities in the labour market; addressing the issue of skills mismatches; and building a strong and comprehensive labour market information system.