The New Today

Commentary

Exploring unemployment in Grenada

Enhancing the welfare of the population is the ultimate objective of achieving economic growth and development. Therefore, comprehensive and regular information on social indicators such as unemployment and poverty are necessary to assess the success of policies for achieving economic growth and development.

In the budget statement for 2022, the unemployment rate was reported at 16.6 percent at the end of June 2021, declining from 28.4 percent in June 2020. The information was based on the labour-force surveys conducted by the Statistics Department. The data showed that there was a decline in unemployment between 2020 and 2021.

At the end of the fourth quarter of 2019 the overall unemployment rate stood at 15.1 percent. In 2020, at the end of the fourth quarter, unemployment was 18.5 percent; and by the second quarter of 2021, the unemployment rate was 16.6 percent. This is highlighted in the following table:

In analysing the unemployment data, it is important to include the basics of calculating the rate of unemployment. The unemployment rate is determined by the number of persons unemployed divided by the labour-force.

According to the International Labour Organisation [ILO], the unemployed is a person who is 15 years and over, available to work within two weeks and actively sought employment at some time during the last four weeks or have already found a job that starts within the next three months (Insee definitions). Therefore, there would be persons who are capable of working, but have not been actively seeking employment and would not be included in the analysis of the unemployed.

The labour-force, also known as the economically active population, as defined by the ILO is the sum of the number of persons employed and the number of persons unemployed. This means that persons who are capable of working, but have not been actively seeking employment are not included in the unemployed and therefore not included in the labour-force.

The application of the concepts in the survey is consistent with international standards and is necessary for international comparisons. However, there is a segment of the population that is capable of working but is outside the analysis of the labour market situation. For policy purposes, it is important to investigate and report on the size and characteristics of that segment of the population.

Along with the overall unemployment rate, an analysis of unemployment by age and sex is needed to obtain a more comprehensive picture of the unemployment situation. A disaggregation of the overall unemployment rate by age shows high unemployment among the youth.

In 2019 and 2020, at the end of the fourth quarter, unemployment among youths stood at 29.6% and 39.5% respectively. By the end of the second quarter of 2021, youth unemployment was 38.6 percent. In targeting policies, consideration must be given to the high and chronic unemployment among the youths. The rate of unemployment among the youth is highlighted in the following table:

The disaggregation of unemployment by sex showed higher unemployment rates for females, when compared with the overall unemployment rate. The unemployment rate among females converged to an average of 19.8 percent over the three years, accounting for 18.3 percent in 2019, 21.6 percent in 2020, and 19.5 at the end of the second quarter of 2021, as depicted in the following table:

A cross tabulation of the unemployment rates by sex and age highlighted high youth unemployment (15-24 years) in females, particularly in 2021. For the years 2019 to 2021, the unemployment among the youth was distributed among males and females as follows: in 2019 males were 20.4 percent and females were 40.3 percent. In 2020 males were 40.9 percent and females were 37.8 percent. By the second quarter of 2021, female youth unemployment stood at 42 percent and males at 36.2 percent.

It is important to show the distribution of unemployment among the parishes and the rate for Carriacou and Petit Martinique. However, this disaggregation of the unemployment data, if publicly available, was hindered by the inability to continue to access the labour-force data from the website where the labour-force information was originally sourced.

In summary, based on the labour-force surveys, the overall rate of unemployment declined between 2020 and 2021. By the second quarter of 2021, the unemployment rate was 16.6 percent. However, the unemployment situation was characterised by higher rate of unemployment among women [19.5 percent] and high youth unemployment [38.6 percent].

The segment of the population that is capable of working, but not actively seeking employment is not included in the analysis of the labour market situation. Consistent with the standard ILO definitions, they are not classified as unemployed and not included in the labour-force. Analysis of the characteristics of this segment of the population is also needed for targeting public policies.

The publication of a ‘Social Indicators’ Bulletin’, which provides disaggregated information on the labour-force and poverty would allow for an assessment of the impact of policies on the welfare of the population.

Knowledge is power and Experience is the greatest teacher.

Laurel Bain is a Grenadian-born former economist with the St. Kitts-based Eastern Caribbean Central Bank