EMPLOYMENT “Creating better employment opportunities for women and men to ensure that they have decent incomes and jobs” ACTRAV - ITC

Basic level: Diagnosing the employment situation from both a qualitative and quantitative viewpoint.

Contents Convention 122 Some specific features of the labour market Economic policies, social policies and the labour market Sources of statistical information EAP definitions, concepts and indicators

C122 Employment Policy Convention, 1964 (1) Article 1: With a view to stimulating economic growth and development, raising levels of living, meeting manpower requirements and overcoming unemployment and underemployment, each Member shall declare and pursue, as a major goal, an active policy designed to promote full, productive and freely chosen employment. Employment Policy Convention (Note: Date of entry into force: 15:07:1966.)

C122 Employment Policy Convention, 1964 (2) 2. The said policy shall aim at ensuring that: a) there is work for all who are available for and seeking work; b) such work is as productive as possible; c) there is freedom of choice of employment and the fullest possible opportunity for each worker to qualify for, and to use his skills and endowments in, a job for which he is well suited, irrespective of race, colour, sex, religion, political opinion, national extraction or social origin.

C122 Employment Policy Convention, 1964 (3) The said policy shall take due account of the stage and level of economic development and the mutual relationships between employment objectives and other economic and social objectives, and shall be pursued by methods that are appropriate to national conditions and practices.

C122 Employment Policy Convention, 1964 (4) Article 2: Each Member shall, by such methods and to such extent as may be appropriate under national conditions: a) decide on and keep under review, within the framework of a coordinated economic and social policy, the measures to be adopted for attaining the objectives specified in Article 1; b) take such steps as may be needed, including when appropriate the establishment of programmes, for the application of these measures.

Some specific features of the labour market (1) 1) Events in employment are influenced by the development of production; of the real economy. Hence it is said that the labour market is a secondary market (contrary to the neo-classical view). 2) Thus, if there is a recession in the real economy, there will be unemployment and / or underemployment in the labour market. 3) For employment policies to be effective, macroeconomic policies must therefore be convergent with the employment goal.

Economic growth is not neutral

Economic policies and social policies Social policy approach Social programmes Social expenditure in GDP Economic policy orientation Sectoral policies? Policies for SMEs? Labour market policies: vocational training, labour intermediation policies, minimum salaries They are interdependent. They are not segmented

Ranis, Gustav and Stewart, Francis, Cepal Review, December 2002

EAP definitions, concepts and indicators

The concept of EAP The total population is the number of people living in a country at a given time. Usually specified when population censuses are carried out. The working age population (WAP) is a subset of the total population and has a lower and an upper limit that vary from country to country. The WAP is divided into two clusters: the EAP (economically active population) and the non- active, inactive population EAP is equivalent to Labour Supply The employed EAP is equivalent to Labour Demand

Links between EAP categories a)The EAP meets two conditions: one objective (age) and the other subjective (the desire to look for a job) b)The distinction between paid and unpaid employment c)The notion of unemployment and paid employment and the rural world d)Development in the concept of informal labour e)Transitions between the condition of EAP and the inactive population (hidden unemployment) f)The various categories of underemployment ("objective" and others) g)Identification of EAP categories based on conditions of women – men and young people.

Employment rate Employment rate = (Employed workers / WAP) * 100 WAP: Working Age Population (aged 15 and over). Used to identify the percentage of the WAP with some sort of job

Unemployment rate Unemployment rate = (Unemployed workers/ EAP) * 100 EAP: Economically Active Population (Employed + Unemployed). Used to identify the percentage of the EAP that has not found job opportunities. Unemployment: frictional, structural. Used to carry out analyses by gender, age, occupation, region

Labour market participation Labour market participation = (EAP / WAP) * 100 WAP: Working Age Population (aged 15 and over). Specifies the percentage of a particular WAP group participating in the job supply. For example, the proportion of all working-age women participating in the EAP. This makes it easier to measure the degree of labour market incorporation of women and young people and also to measure the intensity of child labour, for example.

Inactivity rate Inactivity rate = (Inactive workers / WAP) * 100 WAP: Working Age Population (aged 15 and over). Measures the percentage of the WAP outside the EAP at any given time. This indicator is particularly sensitive to crises. Young people are the first out and the last in (after recovery of employment levels).

Other examples: Household dependency ratio Number of people who must be financially subsidised by each employed person in a given population. This is the ratio between the total number of employed people in the household and the number of people in the household. Employed persons aged 15 years and over are included and people in domestic service and their immediate families are excluded from the count in both cases. Household Dependency Ratio=Employed people in the household People in the household

Participation of the different EAP components in the total population, Mexico, 2011