1. Bahrain labour market trends LMRA Policy Directorate 15 August 2006

2. Contents Employment –Quarterly employment time series –Civilian employment is accelerating, with an expected addition of 66’200 by end 2006 Wages –Establishment survey on wage structure and distribution, March 2006 –There are significant unexplained differences between Bahraini and non-Bahraini wages Annex –Review of Bahrain labour market data: Gaps and weaknesses –Statistical tables –Methodological descriptions

3. Bahrain labour market data Gaps: Lack of data –Labour cost –Productivity –Industrial disputes Weaknesses: Data not comprehensive or regular –Employment –Unemployment –Wages and earnings –Hours of work –Underemployment –Occupational injuries

4. Combining data from different sources Maximise advantages, minimise drawbacks of each source Limit cost Increase periodicity Expand coverage Adjust to standards Obtain disaggregated statistics Combined data Administrative data Survey data Objective:

5. Labour Accounting Documenting data Documenting data ●GOSI ●PFC ●CSB ●MoL ●MOIC ●Labour force survey ●Establishment survey ●National Accounts ●MI Standard codes Evaluating data Evaluating data ●Employment BahrainiNon-Bahraini ●Unemployment Bahraini ●Wages Bahraini Bahraini Non-Bahraini Non-Bahraini Benchmarking at specific date Benchmarking at specific date Comparing data from different sources Similar concepts Dissimilar but interrelated concepts ●Reconciling data Identifying differences Accounting for differences ●Balancing and consolidating –Adjusting for unaccounted differences –Deriving consolidated benchmark Disaggregating Disaggregating ●Civil, Military ●Private, Public Sector ●Male, Female ●Youth, Adult Time series Time series ●Quarterly ●2002 Q1 -

6. Table 1. Civilian employment Comparison of data from different sources: Nov-Dec 2004 Labour Force Survey 1 Administrative DataDiff Total civilian non-institutional employment 306’000 Total civilian registered employment 305’159-800 Bahraini 117’000 Bahraini 109’520-7’500 Employees 107’400 GOSI 2 66’568- Non employees (Employers, own-account, unpaid family and other workers) 9’600 PFC 3 42’339- CSB, not in PFC 4 613- Non-Bahraini 189’000 Non-Bahraini 195’639+6’600 Employees 184’400 GOSI 2 181’578- Non employees (Employers, own-account, unpaid family and other workers) 4’600 PFC 3 13’362- CSB, not in PFC 4 699- 1 Labour Force Survey 2004, Bahrain Centre for Studies & Research, Table 5.7, pp. 84 and 184. 2 General Organisation for Social Insurance, 28 th Annual Report – 2004, Table 4, p. 23. 3 The Pension Fund Commission, Annual Report 2004, Table No. (1) and No. (7), pp. 28, 36. 4 Labour Market Regulatory Authority (LMRA), Market Intelligence Database, 200412. Workers on contract, temporary assignment or below 18 years of age.

7. Table 2a. Total Bahraini employment Reconciliation of data from different sources: Nov-Dec 2004 Civilian non-institutional employment 117’000 Civilian registered employment 109’520 Institutional employment Institutional employment-Subtractions: Under reporting Under reporting- Multiple jobs 2 Multiple jobs 2 -1’010 Ghost workers 1 Ghost workers 1 -1’195 Additions (unregistered workers) : Not insured employees 3 Not insured employees 3 +1’100 Non employees 4 Non employees 4 +8’624 Total civilian employment 117’000 Total civilian employment 117’039 1 Mehran, F., “Bahrain’s Illicit Labour Market,” LMRA Working Paper, July 2006. 2 Number of records with duplicate CPR in GOSI files 200412 received by LMRA. 3 Estimated number of employees in establishments with 1-4 workers, not covered by GOSI in 200412, Mehran, F., “Harmonisation of time series based on administrative records for changes in coverage,” LMRA Working Paper, June 2006. 4 Employers, own-account and unpaid family workers not included in GOSI records, Labour Force Survey 2004, Bahrain Centre for Studies & Research, Table 5.7, p. 184.

8. Table 2b. Total non-Bahraini employment Reconciliation of data from different sources: Nov-Dec 2004 Civilian non-institutional employment 189’000 Civilian registered employment 195’639 Institutional employment Institutional employment-Subtractions: Under reporting Under reporting- Multiple jobs 2 Multiple jobs 2 -1’693 Free-visa workers 1 Free-visa workers 1 48’000 Additions (unregistered workers) : Not insured employees 3 Not insured employees 3 +15’700 Non employees 4 Non employees 4 +4’600 Free-visas, no valid work permits 1 Free-visas, no valid work permits 1 +31’000 Total civilian employment 237’000 Total civilian employment 245’246 1 Mehran, F., “Bahrain’s Illicit Labour Market,” LMRA Working Paper, July 2006. 2 Number of records with duplicate CPR in GOSI files 200412 received by LMRA. 3 Estimated number of employees in establishments with 1-4 workers, not covered by GOSI in 200412, Mehran, F., “Harmonisation of time series based on administrative records for changes in coverage,” LMRA Working Paper, June 2006. 4 Employers, own-account and unpaid family workers not included in GOSI records, Labour Force Survey 2004, Bahrain Centre for Studies & Research, Table 5.7, p. 184.

9. Table 3a. Total Bahraini employment Balancing data from different sources: Nov-Dec 2004 Civilian non-institutional employment 117’000 Civilian registered employment 109’520 Institutional employment Institutional employment-Subtractions: Under reporting Under reporting- Multiple jobs 2 Multiple jobs 2 -1’010 Ghost workers 1 Ghost workers 1 -1’195 Balancing Balancing-39 Additions (unregistered workers) : Not insured employees 3 Not insured employees 3 +1’100 Non employees 4 Non employees 4 +8’624 Total civilian employment 117’000 Total civilian employment 117’000 1 Mehran, F., “Bahrain’s Illicit Labour Market,” LMRA Working Paper, July 2006. 2 Number of records with duplicate CPR in GOSI files 200412 received by LMRA. 3 Estimated number of employees in establishments with 1-4 workers, not covered by GOSI in 200412, Mehran, F., “Harmonisation of time series based on administrative records for changes in coverage,” LMRA Working Paper, June 2006. 4 Employers, own-account and unpaid family workers not included in GOSI records, Labour Force Survey 2004, Bahrain Centre for Studies & Research, Table 5.7, p. 184.

10. Table 3b. Total non-Bahraini employment Balancing data from different sources: Nov-Dec 2004 Civilian non-institutional employment 189’000 Civilian registered employment 195’639 Institutional employment Institutional employment-Subtractions: Under reporting Under reporting- Multiple jobs 2 Multiple jobs 2 -1’693 Free-visa workers 1 Free-visa workers 1 48’000 Additions (unregistered workers) : Not insured employees 3 Not insured employees 3 +15’700 Non employees 4 Non employees 4 +4’600 Free-visas, no valid work permits 1 Free-visas, no valid work permits 1 +31’000 Balancing Balancing-8’246 Total civilian employment 237’000 Total civilian employment 237’000 1 Mehran, F., “Bahrain’s Illicit Labour Market,” LMRA Working Paper, July 2006. 2 Number of records with duplicate CPR in GOSI files 200412 received by LMRA. 3 Estimated number of employees in establishments with 1-4 workers, not covered by GOSI in 200412, Mehran, F., “Harmonisation of time series based on administrative records for changes in coverage,” LMRA Working Paper, June 2006. 4 Employers, own-account and unpaid family workers not included in GOSI records, Labour Force Survey 2004, Bahrain Centre for Studies & Research, Table 5.7, p. 184.

11. Table 4. Consolidated estimate of total employment Nov-Dec 2004 TotalBahrainiNon-Bahraini TMFTMFTMF Civilian employment Civilian employment354’000304’80049’200117’00082’60034’400237’000222’10014’900 “Public” sector PFC,CSB “Public” sector PFC,CSB56’90036’90020’00042’90025’80017’10014’00011’1002’900 “Private” sector “Private” sector297’100267’90029’20074’10056’80017’300223’000211’00012’000 - Employees GOSI adj - Employees GOSI adj260’100233’10027’00064’50047’90016’600195’600185’10010’500 - Non employees LFS - Non employees LFS14’20013’2001’0009’6008’9007004’6004’300300 - Other “Free-visas” - Other “Free-visas”22’80021’6001’200---22’80021’6001’200 Civilian employment Bahraini/Non-Bahraini (T) = Total employment Bahraini/Non-Bahraini (T) – Military Bahraini/Non-Bahraini (T) “Public” = Table 5a (line 2 + line 4) “Private” Bahraini/Non-Bahraini (T) = Civilian Bahraini/Non-Bahraini (T) – “Public” Bahraini/Non-Bahraini (T) GOSI adj = Table 5a (line 1 – line 5 – line 6 +line 7) Non-employees LFS = Table 5a (line 9) Other “Free-visas” Bahraini/Non-Bahraini (T) = “Private” Bahraini/Non-Bahraini (T) – GOSI adj Bahraini/Non-Bahraini (T) – Non-employees LFS Bahraini/Non-Bahraini (T) – Non-employees LFS Bahraini/Non-Bahraini (T) Other “Free-visas” Male/Female = proportion of M and F in Employees GOSI adj + Non-employees LFS Completion of table by additions.

12. Table 5a. Particular categories of employed persons Nov-Dec 2004 TotalBahrainiNon-Bahraini TMFTMFTMF 1GOSI248’146221’14627’00066’56849’25617’312181’578171’8909’688 2PFC55’60136’29219’30942’33925’64916’69013’26210’6432’619 3CSB38’51522’25416’26134’75019’62715’1233’7652’6271’138 4 CSB, not in PFC 1’312654658613195418699459240 5 GOSI Multiple jobs 2’7052’5371681’0108851271’6931’65241 6 Ghost workers 1’1953498461’195349846--- 7 Not in GOSI employees in 1-4 establishments 16’80015’7001’1001’10080030015’70014’900800 8 GOSI Employers, etc. 9768898797688987--- 9 LFS Employers, etc. 14’20013’2001’0009’6008’9007004’6004’300300 10 - Employers 7’0006’6004004’5004’2003002’5002’400100 11 - Own-account 6’0005’6004004’4004’1003001‘6001’500100 12 - Unpaid & other 1’2001’000200700600100500400100 13 LFS-GOSI Not insured employers, etc. 13’20012’3009008’6008’0006004’6004’300300

13. Table 5c. Free-visa and assimilated workers 2004-2005 Total48’000 Basis of estimation 1 Workers not with legal sponsor Workers not with legal sponsor13’000 Labour inspection 2005 2 Workers employed above quota Workers employed above quota1’000 Labour inspection 2005 3 Workers employed in other than approved job Workers employed in other than approved job500 Labour inspection 2005 4 Workers employed on ghost company Workers employed on ghost company500 Labour inspection 2005 5 Housemaids employed as workers Housemaids employed as workers- 6 Run-away workers Run-away workers1’500 Labour inspection 2004 7 Run-away housemaids Run-away housemaids500 Labour inspection 2004 8 Housewives turned housemaids or workers (except local transfers to nursing and education jobs) Housewives turned housemaids or workers (except local transfers to nursing and education jobs) 31’000 Bahrain Tribune Wednesday, July 12, 2006 9 Workers with expired work permits Workers with expired work permits 10 Workers without work permits Workers without work permits

14. Table 6. Estimation of employment 2004 Q3 Ratio estimation TotalBahrainiNon-Bahraini TMFTMFTMF Civilian employment Civilian employmentΣΣΣΣΣΣΣΣΣ “Public” sector PFC,CSB “Public” sector PFC,CSB x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 “Private” sector “Private” sectorΣΣΣΣΣΣΣΣΣ - Employees GOSI adj - Employees GOSI adj x5x5x5x5 x5x5x5x5 x5x5x5x5 x5x5x5x5 x5x5x5x5 x5x5x5x5 x5x5x5x5 x5x5x5x5 x5x5x5x5 - Non-employees - Non-employeesΣΣΣΣx 6 =ax 5 Σx 6 =bx 5 - Other “Free-visas” - Other “Free-visas”ΣΣΣ- --Σx 7 =cx 5 a = d/(1-d) b = e/(1-e-f) c = f/(1-e-f) d = Non-employees Bahraini LFS (Male, Female, Nov-Dev 2004) “Private” sector Bahraini “Private” sector Bahraini e = Non-employees Non-Bahraini LFS (Male, Female, Nov-Dec 2004) “Private” sector Non-Bahraini “Private” sector Non-Bahraini f = Other “Free-visas” Non-Bahraini (Male, Female, Nov-Dec 2004) “Private” sector Non-Bahraini “Private” sector Non-Bahraini

15. Table 7. Estimation of Bahraini civilian employment 2004 Q3 Youth and Adult Bahraini Youth (15-24 yrs old) Adult (25+ yrs old) TMFTMFTMF Civilian employment Civilian employment x2x2x2x2 x2x2x2x2 x2x2x2x2ΣΣΣΣΣΣ “Public” sector PFC,CSB “Public” sector PFC,CSB x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 x3x3x3x3 “Private” sector “Private” sectorΣΣΣΣΣΣΣΣΣ - Employees GOSI adj - Employees GOSI adj x3x3x3x3 x3x3x3x3 x3x3x3x3ΣΣΣΣΣΣ Employees GOSI Employees GOSI y3y3y3y3 y3y3y3y3 y3y3y3y3 y3y3y3y3 y3y3y3y3 y3y3y3y3 y3y3y3y3 y3y3y3y3 y3y3y3y3 Difference Difference x 3 -y 3 Σa(x 3 -y 3 )b(x 3 -y 3 )Σc(x 3 -y 3 )d(x 3 -y 3 ) - Non-employees - Non-employees x6x6x6x6 x6x6x6x6 x6x6x6x6Σ ex 6 fx 6Σgx 6 hx 6 Non-employees LFS Nov 2004 Non-employees LFS Nov 2004 y6y6y6y6 y6y6y6y6 y6y6y6y6 y6y6y6y6 y6y6y6y6 y6y6y6y6 y6y6y6y6 y6y6y6y6 y6y6y6y6 a = y 3 (Male Youth) / y 3 (Male Total) b = y 3 (Female Youth) / y 3 (Female Total) c = 1-a d = 1-b e = y 6 (Male Youth) / y 6 (Male Total) f = y 6 (Female Youth) / y 6 (Female Total) g = 1-e h = 1-f

17. Civilian Civilian Table 1. Quarterly employment trends in Bahrain 2002-2006 Private Public 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 200203200206200209200212200303 200306 200309200312200403200406200409200412200503200506200509200512200603

18. Table 5. Annual increase in civilian employment: Expected on past trend 2002-2006 against current trend 2006Q1

19. Next steps Employment –Review of data PFC data on non-civilian GOSI data for 2005 Q3 CSB not in PFC Both in GOSI and PFC –Review of underlying assumptions –Review of private-public classification –Branch of economic activity Unemployment (HJ) Wages (FM) Population (CIO)