This paper examines labor marketoutcomes in Armenia and their impact on poverty. Theoutcomes are of considerable concern: relatively few personsof working age are employed, and many of those who areemployed have low-productivity jobs. The problem is not onlyhigh unemployment, but also low labor force participation.The main factor behind the low employment/population ratiois weak labor demand and the scarcity of productive jobopportunities. This paper begins in section one bydiscussing the main labor market challenges in Armenia,before focusing on unemployment in section two. Sectionthree analyzes the nature of employment and jobs, whilesection four examines wage determination and structure.Section five then evaluates the relationship betweenindividuals' and households' labor market statusand poverty. Finally, section six concludes with policyimplications of the analysis. In order to reach the 60percent employment rate Armenia would need to create anadditional 166,000 jobs. This will lead to a 14 percentincrease in employment, and to some decrease inunemployment. More jobs need to be created to absorb thegrowing labor surplus. This implies growing unemployment anda decline in the already low employment rate. Acceleratingthe pace of job creation is thus one of the main socialchallenges facing policymakers in Armenia. Furthermore, itis important that in the longer term, wage growth does notexceed labor productivity growth. Otherwise, competitivenessof the Armenian economy could suffer due to a growth in theunit labor cost, which in turn, can have a detrimentaleffect on job creation.
PDF
download
878987797
028-85220240
