Employment Scenario in Afghanistan from 2007-08 to 2013-14

This working paper examines the employment situation in Afghanistan from 2007 to 2014.

Examining the employment situation in Afghanistan from 2007 to 2014, this working paper uses unit level micro data from three rounds of the Afghanistan Living Conditions Surveys (ALCS). Afghanistan has one of the youngest populations in the world and unemployment levels in the country have been on the rise, doubling during the period which this paper scrutinizes. The country also has one of the lowest participation rates for women in the region. If unemployment rates have risen by 10 per cent in the period, it is also the case that informal employment shares in total employment have fallen by from around 90 per cent to 80 per cent. These changes are also simultaneous with a decline of over 12 per cent in the labour force participation rates. Although the decline in shares of informal employment can be seen as encouraging, the withdrawal from the labour market, the decline in informal employment and the resulting rising in open unemployment may also be related to safety and security considerations.

The corresponding proportionate rise in relatively more formal employment has, in recent years, largely been due to the expansion of government jobs. The employment challenges the country faces are formidable. It is expected that aid and development funds will decline in the future, good jobs will be difficult to sustain-either with the further expansion of State jobs or with jobs in services that presently rely on expenditures associated with the externally supported parts of the economy. This means that in agriculture and industry, special policy measures will be needed and indeed will have to be financed.
The report identifies some growth strategies as well as some supply side measures that could partly address this impending challenge for the country.