LABOUR AND EMPLOYMENT

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1 5 LABOUR AND EMPLOYMENT The labour force constitutes a key resource that is vital in the growth and development of countries. An overarching principle that guides interventions affecting the sector aims at a realization of the full potentials and promotion of the welfare of the labour force. Gender disparities in economic opportunities, child labour, and productivity, to cite a few, however, still pose difficult challenges. To address these concerns, interventions are pursued to generate employment opportunities, promote the quality of the workforce, and safeguard the rights and welfare of workers. The challenges affecting the labour market have transcended national boundaries considering initiatives in the top agenda of international agencies as well. In the region, the ASEAN Labour Ministers envision a productive, competent and competitive workforce - a workforce that is highly capable of harnessing opportunities brought about by advancements in the economic and technological fronts and enjoys sustainable livelihood. To achieve this vision, the ASEAN Labour Ministers committed to put in place an appropriate policy environment; to strengthen the capacities of the workforce through training, education, life-long learning, and skills upgrading; and, to share knowledge, experiences and best practices on labour market policies, skills standards, employment generation, and social protection schemes. The vision and strategies, which are contained in the ASEAN Labour Ministers Vision Statement (May 11, Manila, the Philippines), clearly demonstrate a firm resolve to promote the full potentials and welfare of the ASEAN s workforce. To elaborate the concerns on labour and employment, this chapter focuses on (i) labour supply; (ii) labour utilization; (iii) distribution of labour; (iv) gender equality; and, (v) child labour. LABOUR SUPPLY The supply of labour in a country is determined by the size of the labour force which refers to the working-age population or persons above a certain age, whether employed or unemployed, and available for the production of goods and services. It excludes persons who are not working and neither available for work during the reference period of inquiry nor looking for work. Labour and Employment 173

2 The indicator, labour force participation rate, provides a measure of the relative size of the working-age population that can be used for the production of goods and services. In the compilation of labour force data by countries in the region, however, differences in measurement are observed. These differences involve the age threshold used and the period covered by the data. Specifically, the working-age cut-off is determined by country norms and cultural practices; hence, the cut-off commonly used by countries in the region refers to 10 years old and over or 15 years old and over. Meanwhile, the official retirement ages for women and men are used as standards in measuring labour force participation in Viet Nam, that is, 15 to 60 years of age for men and years of age for women. The period covered by the labour force data presented in this chapter, also varies among the countries. The reference period of the data reported by Cambodia based on the results of its Labour Force Survey (LFS) is November; the Philippines, the October round of its LFS; Singapore, it s mid-year LFS from 1996 to 1999 and 2001; and Thailand, the third or August round of its survey. The differences in measurement methodologies were also recognized in the ASEAN Workshop on Preparing Workers for Changes in the Labour Market: Lessons from the Economic Crisis and Issues on Re-Training and Multi-Skilling held in October The workshop recommended a follow up action involving the harmonization of labour market information systems including the definition of labour force, employment, unemployment, among others, used by the countries in the region. Labour Force Participation Rate In 2001, the labour force participation rates, both sexes, of eight countries in the region (Brunei Darussalam, Cambodia, Malaysia, Myanmar, the Philippines, Singapore, and Thailand), as shown in table 5.1 and figure 5.1.1, range from 64% to 74%. Meanwhile, it is observed that as early as 1995 Lao PDR had realized a labour force participation rate of 69%. On the other hand, the data on labour force participation rate of Viet Nam, which stood at about 86% in 1993 and 1998, indicate a high rate. The United Nations Development Programme report (2001), Living Standards During an Economic Boom: The Case of Viet Nam, cited that the rates are very high by world standards. Figure Labour Force Participation Rate, Both Sexes, in % 174 Labour and Employment

3 A comparison of the data for 1990 and 2001 shows a moderate increase in the combined labour force participation rates for men and women in Brunei Darussalam, Myanmar, the Philippines, and Viet Nam. The increase in their labour force participation rates ranges from almost 1 percentage point to 4 percentage points. During the same period, Indonesia experiences an increase of 12 percentage points from 57% in 1990 to 69% in With almost 72% labour force participation rate in 2001, representing an increase of 15 percentage points compared to its rate of 57% in 1994, Cambodia registers the highest increment between these two periods. Definition: Unit of measurement: % Table 5.1 Labour Force Participation Rate, by Sex The number of persons in the labour force as a percentage of the working-age population. The labour force refers to the economically active population which consists of employed and unemployed. The working-age population is the population above a certain age, prescribed for the maesurement of economic characteristics. Country BOTH SEXES Brunei Darussalam Cambodia *) Indonesia Lao PDR *) 68.6 Malaysia Myanmar *) The Philippines Singapore Thailand Viet Nam MALE Brunei Darussalam Cambodia *) Indonesia Lao PDR *) 67.7 Malaysia Myanmar *) The Philippines Singapore Thailand Viet Nam FEMALE Brunei Darussalam Cambodia *) Indonesia Lao PDR *) 69.5 Malaysia Myanmar *) The Philippines Singapore Thailand Viet Nam Notes: Sources: *) Refer to 10 years old and over. Cambodia data refer to 10 years old and over. Indonesia 15 years old and over. Lao PDR 10 years old and over. Malaysia years old. Myanmar 10 years old and over and unpaid family workers are considered employed. The Philippines 15 years and over. Singapore 15 years old and over and total population comprises Singapore residents and foreigners staying or working in Singapore for one year or more. Thailand 15 years old and over. Viet Nam working age population for males is and for females, 15-55, which are the official retirement ages. Brunei Darussalam 1991 and 2001 Census of Population and 1995 Labour Force Survey and estimates for the other years using data from the Labour Department. Cambodia Socio-Economic Survey of Cambodia Oct93-Sept94, 1996, 1997 and 1999; Demographic Survey Apr95-Mar96; 1998 Population Census of Cambodia; and, Labour Force Survey November 2000 and Indonesia National Labour Force Survey except for 1995 which used the National Socio-Economic Survey. Lao PDR Census Malaysia Quarterly Labour Force Survey and no surveys were undertaken in 1991 and Myanmar Department of Labour. The Philippines October round Labour Force Survey. Singapore Data for 1990 and 2000 are from the Census of Population; 1995, General Household Survey; and , and 2001, based on the mid-year Labour Force Survey. Thailand Labour Force Survey Round 3 (August). Viet Nam Viet Nam Living Standards Survey 1993 and Labour and Employment 175

4 An opposite trend is observed in the case of Thailand whose labour force participation rate for both sexes went down from an average of about 81% from 1990 to 1993 to 74% in 2001, a decrease of 7 percentage points. Similarly, the rate registered by Malaysia is lower in 2001 (65%) than in 1990 (66%). In 2001, the labour force participation rate for both sexes in Singapore was 65%, which is lower than 1990 (66%) and 2000 (69%), the latter being the highest during the twelve-year period. The labour force participation rate for men in eight countries of the region (Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, and Thailand) ranges from 72% to 84% based on their data for On the other hand, it is observed that as early as 1993 (88%) and in 1998 (87%), Viet Nam had achieved a labour force participation rate for men that is higher than what the other countries posted in In those years, Viet Nam had the highest rate among the countries in the region. Cambodia, Indonesia, Myanmar, and the Philippines have higher labour force participation rates for men in 2001 than in 1990 (table 5.1 and figure 5.1.2); the increase ranging from less than 1 percentage point, in the case of the Philippines, to as high as 13 percentage points for Indonesia. Between 1994 and 2001, the increase in the rate for men in Cambodia by 14 percentage points is the highest among the countries, that is, from 58% in 1994 to 72% in Figure Labour Force Participation Rate, Male, in % In the other countries - Brunei Darussalam, Malaysia, Singapore, Thailand, and Viet Nam - the labour force participation rates for men in 2001 are lower than the rates that they reported in 1990/1991 or 1993 (Viet Nam). From almost 88% in 1990, the participation rate for men in Thailand slid to almost 82% in 2001, decreasing by almost 6 percentage points. In Brunei Darussalam, the 82% rate for men in 1991 was not sustained as it fell to 79% in 2001 a decrease of about 3 percentage points. From 85% labour force participation rate for men in Malaysia during the early 1990s, the rate remained at almost 83% from 1998 to 2001, lower by 2 percentage points. From 80% in 1991 based on its labour force survey, the rate for men in Singapore decreased by 2 percentage points in 2001 to 78%. 176 Labour and Employment

5 Based on 2001 data, the latest available for most of the countries in the region, Indonesia has the highest labour force participation rate for men at 84% and is closely followed by Malaysia, 83%, the Philippines and Thailand, 82%, and Myanmar, 80%. On the other hand, Cambodia consistently registers the lowest rate for men during the period 1994 to However, the increase in its rate from 58% in 1994 to 72% in 2001, or by 14 percentage points, exceeds the increment achieved by other countries in the region. The labour force participation rates for men in Lao PDR (69% in 1995) and Viet Nam (88% in 1993 and 87% in 1998) deserve to be cited as well. Although the rate for men in Viet Nam decreased in 1998 by almost 1 percentage point, it has the highest labour force participation rate among the reporting countries during that year. For the same group of eight countries - Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, and Thailand - the labour force participation rate for women ranges from 47% to 71% in 2001 (figure 5.1.3). This range is clearly below the range for men, from 72% to 84%, during the same period. In 1993 and 1998, Vietnamese women were already enjoying higher participation rate in the labour force, at 84% and 86%, respectively, which no other country in the region has ever attained since Figure Labour Force Participation Rate, Female, in % Most countries with latest available data, with the exception of Malaysia and Thailand, recorded higher rates in 2001 than their earliest rates in the data series (table 5.1 and figure 5.1.3). On the other hand, the rates in 2001 of Malaysia, 47%, and Thailand, 67%, are lower than their rates at 48% in 1990 and 76% in 1990, respectively. In 2001, Cambodia, with 71%, edged Thailand, with 67%, and the other countries in having the highest labour force participation rate for women. In the previous year (2000), Thailand, with almost 65% labour force participation rate for women, was ahead of Cambodia, whose rate was about 64%, and Labour and Employment 177

6 the other countries. While Thailand gained almost 2 percentage points increase in its rate in 2001 as compared to 2000, the increase in the labour force participation rate of women in Cambodia, by 7 percentage points in 2001, was more than three-fold that of Thailand. The labour force participation rates for women of Viet Nam in 1993 (84%) and 1998 (86%) were the highest recorded rates in the region (table 5.1) during those years. The only figure for Lao PDR for 1995 of around 70% is also worth mentioning. Labour Force Participation Rate Men-Women Differentials The significance of disaggregating labour force participation rate by sex can be explained using the results of a detailed analysis of Key Indicators of the Labour Market (KILM) for 181 economies worldwide by the International Labour Organization (ILO). Its findings show that the most important determinant of labour force participation rate is age, followed by sex. The third determining factor is the interaction between sex and age group, especially for young people (ILO KILM ). A comparison of the labour force participation rates by sex shows the progress of women s entry into the labour force or their participation in economic activities vis-à-vis their male counterparts. The available country data consistently show higher participation of men in the labour force than that of women from 1990 until 2001 (tables 5.1 and 5.2). However, the reverse occurred in Lao PDR and Cambodia in 1995 when women had a higher labour force participation rate than men. Specifically, in Lao PDR, women had a participation rate (69.5%) higher by almost 2 percentage points than that of men (67.7%; table 5.2). During the same year, women (59.4%) in Cambodia had slightly higher rate by 0.4 percentage point than that for men (59%). Table 5.2 Difference between Male and Female Labour Force Participation Rates (in percentage points) Country Brunei Darussalam Cambodia 2.7 (0.4) Indonesia Lao PDR (1.8) Malaysia Myanmar The Philippines Singapore Thailand Viet Nam Notes: The difference was derived by deducting the recorded Labour Force Participation Rate for females from that of males. The numbers in parenthesis indicate that females have higher Labour Force Participation Rates than males. 178 Labour and Employment

7 Based on the 2001 data of eight countries in the region, the difference between the men and women labour force participation rates ranges from a low 0.8 percentage point, in the case of Cambodia, to as high as 36 percentage points, in the case of Malaysia. Thailand exhibited a wide gap of around 15 percentage points, while Brunei Darussalam and Singapore recorded a difference of 20 percentage points and 24 percentage points, respectively. At the high end of the range, that is, the countries with at least 30 percentage points difference are Malaysia (36 percentage points), Indonesia (35 percentage points), Myanmar (33 percentage points), and the Philippines (30 percentage points). The computed difference in men-women participation rates, however, reveals a widening of the gap in Indonesia from almost 27 percentage points in 1996 to 35 points by 2001; in Myanmar from 28 percentage points in 1991 to 33 points by 2001; and, in Thailand, from 11 percentage points in 1990 to 15 percentage points by 2001 (table 5.2). On the other hand, the narrowing of the male-female differential gained momentum in 1996 in Malaysia when the 40 percentage points gap recorded in 1993 and 1995 started to decline until it reached 36 percentage points by In the Philippines and Singapore, the gap continued to diminish since 1991 (figure 5.2). In Brunei Darussalam, a significant narrowing of the gap in the male-female labour force participation rates, from 36 percentage points in 1991 to 20 percentage points in 2001, occurred based on the results of the population census. This can be partly explained by the increase in female participation rate by almost 13 percentage points between 1991 and 2001 accompanied by a decrease in the rate for males of 3 percentage points during the same period. Figure 5.2 Male-Female Labour Force Participation Rate Differential, in Percentage Points The difference between the men and women participation rates in Cambodia (0.8 percentage points in 2001) and Viet Nam (0.8 percentage points in 1998) indicates gender equality in the labour market. In 1995, women in Cambodia and Lao PDR even surpassed the participation rate recorded for men. While the same situation did not occur in subsequent years, Cambodia was able to maintain less than 1 percentage point gap between the men and women participation rates except in 2000 when the gap Labour and Employment 179

8 widened to almost 2 percentage points. In 2001, the gap again narrowed to 0.8 percentage points. In the case of Viet Nam, the gap significantly dropped from almost 4 percentage points in 1993 to less than 1 percentage point by 1998 (table 5.2). The trend presented by the available data of countries in the region strengthens current campaigns for gender equality in economic endeavours. Serious efforts towards this end underscore the need to address a multitude of factors that influence women s participation in the labour force. As highlighted in the analysis by the International Labour Organisation (ILO) of Key Indicators of the Labour Market (KILM), specifically on labour force participation rates of economies worldwide, the factors that determine women s participation in the labour market include demographic, social, and legal and cultural norms. As further cited in the ILO KILM report, the equally competing roles of women in their households, however, affect women s decision and availability to enter the labour force. The increasing participation of women in the labour market is driven by changes in the social and economic structures of society, such as improvements in educational attainment, availability of employment opportunities, changing perceptions in the role of women, and mainstreaming of women s concerns as provided for by legal, policy and regulatory frameworks. A more in-depth analysis of the gap in the men-women labour force participation rates should, however, consider industry disaggregation of the data. Generally, the participation of women in the agriculture sector is higher than that of men; hence, this should be appropriately considered to determine real improvements in the participation of women in the labour force. LABOUR UTILIZATION The extent of utilization of the labour force is usually measured through the indicator, unemployment rate which is derived as the proportion of the unemployed persons to the total labour force. It is a vital indicator to decision- and policy-makers on which to base programmes and measures aimed at reducing unemployment and its impacts. Unemployment rate is also used together with other socioeconomic indicators in analyzing the well-being of the populace. The unemployed consists of persons in the labour force who, during the reference period were without work either in paid employment or self employment and seeking work or had taken steps to seek paid employment or self employment. It also includes those currently available for work for paid employment or self employment and seeking work or had taken steps to seek paid employment or self employment. The earlier section presented some conceptual differences in the measurement of labour force. These differences also affect the comparability of unemployment data among the countries in the region. In addition to the age cut-off and reference period covered by the data, it is noted that the data of Viet Nam pertain to urban areas only. On concepts, some countries, such as Indonesia and the Philippines, either adopt a relaxed concept of unemployment as compared to those prescribed by the ILO or do not include in the measurement the criterion on availability for work. Hence, the analysis should take this into consideration. 180 Labour and Employment

9 This section presents three dimensions of unemployment, namely: (i) the unemployment rate of persons 10 or 15 years old and over which normally comprise the labour force; (ii) the unemployment rate of the youth which refers to those aged 15-24; and, (iii) the ILO comparable unemployment rate. Emphasis is given on trends and male-female differences in the first two indicators. Unemployment Rate, 10 or 15 Years Old and Over In countries with available data for 2001, the combined unemployment rate for both sexes ranges from 2% (Cambodia and Thailand) to 10% (the Philippines) as shown in table 5.3 and figure In between these ranges are Indonesia with 8%, and Viet Nam and Brunei Darussalam at 6% unemployment rate. As further gleaned from the country data, the rates reported by Brunei Darussalam (6%) and Indonesia (8%) in 2001 are their highest during the period under review. These may relate to the different ages covered, reference periods of the country data reported and the definition of unemployed and data sources employed. Figure Unemployment Rate, Both Sexes, 10/15 Years Old & Over, in % A cursory look at the direction of the trend in the unemployment rate for both sexes shows an upward direction for most countries in the region (figure 5.3.1). Comparing the countries earliest and latest data (table 5.3), the unemployment rate of Indonesia jumped to 8.1% in 2001, representing an increase of almost 5 percentage points from its rate of 2.5% in With an unemployment rate of 8.1% in 1990, the Philippines likewise registered a higher rate in 2001 (at 9.8%). It is noted that in the year before, 2000, the Philippines posted its highest rate at 10.1% since Meanwhile, Singapore almost experienced a doubling of its unemployment rate at 1.9% in 1991 to 3.4% by 2001 based on the results of its surveys. It, however, occurred at a very low level. The rate reported by Brunei Darussalam in 2001 at 5.6% is higher by 0.9 percentage point than its unemployment rate in 1991 at almost 4.7%. Cambodia, Malaysia, and Viet Nam improved their unemployment rates for both sexes in 2001 having posted rates that are lower than their earliest rates during the period (table 5.3). From 2.5% in 1994 and Labour and Employment 181

10 1995, the unemployment rate of Cambodia dropped to 1.8% by Malaysia likewise reported an improvement in its unemployment rate in 2001 (3.6%), lower than 1990 by almost 1 percentage point. In the case of Viet Nam, its unemployment rate in 2001 (6.3%) is 0.6 percentage point lower than its 1993 rate (6.9%). Meanwhile, Myanmar and Thailand have unemployment rates for both sexes in 2001 that are close to their rates in 1990 at 4% and 2%, respectively. The proportion of unemployed in Myanmar is estimated to decline at a stable rate. While Thailand was able to reduce its unemployment rate in 1990 (2.2%) by about half in 1997 (1.1%), the rate went back to 2.1% in Definition: Unit of measurement: % Table 5.3 Unemployment Rate, 10/15 Years Old and Over, by Sex Number of unemployed persons, 10/15 years old and over, as percentage of the labour force for the same age group. BOTH SEXES Brunei Darussalam Cambodia *) Indonesia Lao PDR *) 2.4 Malaysia Myanmar *) The Philippines Singapore Thailand Viet Nam (urban areas) MALE Brunei Darussalam Cambodia *) Indonesia Lao PDR *) Malaysia Myanmar *) The Philippines Singapore Thailand Viet Nam (urban areas) FEMALE Brunei Darussalam Cambodia *) Indonesia Lao PDR *) Malaysia Myanmar *) The Philippines Singapore Thailand Viet Nam (urban areas) Notes: Sources: Country *) Refer to 10 years old and over. Cambodia, Lao PDR and Myanmar 10 years old and over. Indonesia, the Philippines and Thailand 15 years old and over; Malaysia years old; Viet Nam For urban areas only. Brunei Darussalam 1991 and 2001 Population Census, 1995 Labour Force Survey and 1999 and 2000 are estimates using data from the Labour Department. Cambodia Socio-Economic Survey of Cambodia Oct1993-Sept1994, 1996, 1997, 1999, Demographic Survey Apr1995-Mar1996, 1998 Population Census of Cambodia, and Labour Force Survey November Indonesia 1990 to 1994 and 1996 to 2001 Labour Force Survey and 1995 National Socio-Economic Survey. Lao PDR Lao Census Malaysia The Labour Force Survey, Quarterly. Myanmar Department of Labour. The Philippines October round, Quarterly Labour Force Survey. Singapore Data for 1990 and 2000 are from the Census of Population; data for 1995 are from the General Household Survey; and data for , and 2001 are based on the mid-year Labour Force Survey. Thailand Labour Force Survey Round 3 (August). Viet Nam Labour and Employment Survey, July 1 st. 182 Labour and Employment

11 A sharp rise in the unemployment rates of Indonesia and Cambodia in 1995 and 1998, respectively, can be observed from table 5.3 and figures 5.3.1, 5.3.2, and This could be explained by a different source of unemployment data used during those years by the countries. In the case of Indonesia, the 1995 data were generated using its National Socio-Economic Survey while the Labour Force Surveys were the main sources of data for the other years. For Cambodia, the data for 1998 were the results of the census of population while the data for 1997 and 1999 came from surveys. The effects of the financial crisis that hit the region can be seen by comparing the 1997 and 1998 combined unemployment rates for men and women of six countries in the region. The crisis led to retrenchment of workers and downsizing of entities which caused many workers becoming unemployed. As gleaned from the data, the unemployment rate of Viet Nam in 1998 was higher by 0.7 percentage point or 11% than its 1997 rate; Indonesia by 2.5 percentage points or 17%; the Philippines by 1.7 percentage points or 22%; Malaysia by 0.8 percentage points or 32%; Singapore by 0.8 percentage point or 33%; and, Thailand by 2.5 percentage points or 278%. Moreover, these countries were unable to attain their pre-crisis unemployment rates in 1999 and later years. During the Fifteenth ASEAN Labour Ministers Meeting held on May 10-11, 2001 in Kuala Lumpur, Malaysia, it was recognized that the economic slowdown faced by the ASEAN Member Countries major trading partners had increased the rate of unemployment in some ASEAN member countries. However, the same meeting noted that the experiences gained by the member countries in responding to the 1997 Asian crisis, as well as the measures and policies instituted, would enable them to better cope with the effects on unemployment of the current global economic situation. The data for 2001 of countries in the region in table 5.3 show that the unemployment rate for men ranges from almost 2%, as represented by Cambodia and Thailand, to 9% of the Philippines (table 5.3 and figure 5.3.2). On the other hand, Malaysia and Singapore recorded 3.5%, Brunei Darussalam, 3.7%, and Indonesia 6.6%. However, it should be borne in mind that differences in the measurement of unemployment, e.g., age cut-off, can affect the comparability of the data presented. Figure Unemployment Rate, 10/15 Years Old & Over, Male, in % Labour and Employment 183

12 Looking at the trend of the data on unemployment rate for men during the twelve-year period under review of eight countries in the region, only Cambodia and Myanmar exhibit a downward trend in their unemployment rates (table 5.3 and figure 5.3.2). Since 1994, the unemployment rate of Cambodia, using its survey results, continued to decline until 1999 when the rate settled at 0.5%. In 2000, however, the unemployment rate increased dramatically to 2.1% but by 2001 it went down to 1.5%; thus, indicating some favorable signs of a downward direction. However, it should be noted that the data come from different surveys. A stable unemployment rate for Myanmar, on the other hand, was estimated from 1998 to 2001 at 3.6%, lower by 0.1 percentage point than its rate of 3.7% from 1991 to During the period, Singapore and Thailand realized a continuous decline in their unemployment rate for men. From 4.5% in 1999 for Singapore, the rate went down by 1 percentage point in 2001 (3.5%). Thailand, on the other hand, posted 2.3% unemployment rate in 2001 which is 0.7 percentage point lower than that for 1999 at 3.0%. The unemployment rate for women of the countries in the region in 2001 (table 5.3 and figure 5.3.3) ranges from 2% to 11%. These are shown by the rates posted by Thailand (1.9%), Cambodia (2.2%) and Indonesia (10.6%). In between these countries are Singapore (3.4%), Malaysia (3.8%), Myanmar (4.7%), Brunei Darussalam (8.1%), and the Philippines (10.3%). Figure Unemployment Rate, 10/15 Years Old and Over, Female, in % Of the eight countries in the region with available data on unemployment rate for women, three countries (Cambodia, Myanmar and Thailand) realized improvements in their unemployment rates comparing their latest and earliest data in the series. In 1999, Cambodia posted its lowest unemployment rate of 0.6%. However, it increased to 2.8% in 2000, the same rate registered in 1995, but indications of downward direction are being signaled by its 2001 unemployment rate registered at 2.2%. In the case of Myanmar, a stable rate of decline (by 0.1 percentage point) in the unemployment rate for women was estimated during the period. Thailand s rate significantly decreased from 2.4% in 184 Labour and Employment

13 1990 to 0.9% in However, the rate suddenly climbed to 3.4% in 1998, the highest ever recorded by Thailand since Since 1999, the rate followed a downward direction until it reached 1.9% in 2001 which is lower than its 1990 rate of 2.4%. The other countries are experiencing increases in their unemployment rates for women with the Philippines and Indonesia reporting two-digit rates in 2001 at 10.3% and 10.6%, respectively. Significantly, the unemployment rate of women posted in 2001 (10.6%) in Indonesia is the highest since 1990, even surpassing the rate experienced in 1995 at 10.1%. A comparison of the unemployment rates of men and women in eight countries in the region, table 5.4, shows that the proportion of unemployed women is generally higher than men. However, the proportion of men who are unemployed is higher than women in Cambodia (1997), in Malaysia (1999), in the Philippines ( ), in Singapore ( and 2001), and in Thailand ( ). In some cases, both men and women have the same rate of unemployment as shown by Singapore in 1997 (2.4%) and Thailand in 1998 (3.4%). Brunei Darussalam Cambodia (0.1) Indonesia Malaysia (0.2) Myanmar The Philippines (0.4) (0.4) 0.9 Singapore (0.6) (0.2) (0.1) (0.1) Thailand (0.1) (0.1) (0.4) Notes: Table 5.4 Difference in Male and Female Unemployment Rates (in percentage points) Country (1) Figures in the table were computed by taking the difference between male and female unemployment rates. (2) Numbers in parenthesis mean that males have higher unemployment rate than females. Youth Unemployment Rate, Years Old and Over by Sex The indicator, youth unemployment rate, measures the extent of unemployed persons who are years old. It is also an indicator of the efficiency by which the youth went through the process of transition from school to work. Its importance can be gauged from the essential role of the youth in nation-building.. In the ASEAN, the Yangon 2000 Declaration on Preparing ASEAN Youth for the Challenges of Globalisation recognizes that the youth constitutes the core resource for ASEAN s prosperity and progress in the new millennium, particularly in addressing the challenges of rapid global and regional integration arising from more intensive trade liberalization and expanding use of information and communication technologies. Data show that the youth forms a large proportion of the ASEAN population and, hence, they are a vast and dynamic resource for national and regional development. These premises provide some rationale for advancing the role of the youth in society including their integration into the labour market. Labour and Employment 185

14 Definition: Unit of measurement: % Table 5.5 Unemployment Rate, Years Old, by Sex Number of unemployed persons, aged 15-24, as percentage of the correcponding labour force, years old. Country BOTH SEXES Brunei Darussalam Cambodia Indonesia Lao PDR 3.1 Malaysia Myanmar The Philippines Singapore Thailand Vietnam MALE Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar The Philippines Singapore Thailand Vietnam FEMALE Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar The Philippines Singapore Thailand Vietnam Source: Brunei Darussalam 1991 Population Census and 1995 Labour Force Survey. Cambodia Socio-Economic Survey of Cambodia 1996, and Labour Force Survey 2000 and Indonesia 1990 to 1994 and 1996 to 2001 National Labour Force Survey and 1995 National Socio-Economic Survey. Malaysia The Labour Force Survey, Quarterly. Myanmar Labor Force Survey The Philippines October round Labor Force Survey. Singapore Data for 1990 and 2000 are from the Census of Population; data for 1995 are from the General Household Survey; and data for , and 2001 are based on the mid-year Labour Force Survey. Thailand Labor Force Survey Round 3 (August). 186 Labour and Employment

15 The International Labour Organization (ILO) reports that youth unemployment is a global concern affecting both developed and developing countries, with many of them experiencing youth unemployment rates of 15% or more (ILO, World of Work, No. 39, June 2001). A publication launched by the ILO in 2001 presents the results of the study, Youth Unemployment and Employment Policy: A Global Perspective, which concluded that youth unemployment has reached high levels across a wide range of countries. The study further recognized a social problem arising from youth unemployment, that is, the consequences of youth unemployment, such as social exclusion, which can lead to drug abuse, crime and social unrest, are extremely serious and damaging for a society as a whole. In the ASEAN region, the combined unemployment rates of young male and female members of the labour force in the six countries with data for 2001 range from 3% (Cambodia) to 24% (Indonesia) as can be seen in table 5.5. The other countries which posted double-digit youth unemployment rates in 2001 are the Philippines at 19% and Malaysia at 10.3%. The comparability of the country data is, however, limited by differences in measurement. Figure 5.4 Unemployment Rate, Years Old, Both Sexes, in % Since 1996 when Indonesia was able to lower its unemployment rate to 16% from 20% in 1995, it experienced a continuous rise in its rate (figure 5.4). By 2001, the rate had reached its highest, at 24%, since 1990 and is three times (or higher by 16 percentage points) than that of 1990 at 8%. With its 2001 rate (19.0%) higher by 8 percentage points than 1990 (10.9%), the Philippines follows Indonesia in having the highest increment between the two periods. During the entire reporting period, the Philippines has a double-digit rate which had its peak in 2000 at 21% and the lowest in 1990 at 11% (figure 5.4). The rate which the Philippines posted in 2001, however, represents an improvement over its rates for 1998 to In 1990, Malaysia similarly experienced double-digit unemployment rate of 11%. The rate went down to 6.6% in 1996, the lowest in Malaysia during the period under review. The downward trend, however, shifted upward starting in 1997 reaching 10.3% by 2001 which is its highest since Labour and Employment 187

16 Cambodia, Singapore and Thailand consistently show youth unemployment rates that are less than 9% from 1990 to In addition, the rate observed in Thailand has been consistently declining from 1990 (4.3%) until 1995 (2.3%). In 1997, Thailand earned its lowest rate at 2.2%; however, its rate of 6.5% in 2001 is almost threefold that of A striking observation that also shows the effects of the Asian financial and economic crisis is the increase in the youth unemployment rates in 1998 over the previous year of five countries with available data for these periods. The 1998 rate of Thailand was more than three times that of its 1997 rate or higher by 5 percentage points or 236%; the Philippines by almost 4 percentage points or 24%; Singapore by almost 1.9 percentage points or 37%; Malaysia by 1.7 percentage points or 24%; and, Indonesia by almost 1.6 percentage points or 10%. Another observation similar to worldwide trends is that the unemployment rate for young women is higher than for young men for almost all countries in the region (table 5.6). This occurred during the entirety of the twelve-year data series in Indonesia and the Philippines and for most of the period in Malaysia and Singapore. Thailand is an exception for having an unemployment rate for young women that is lower than that for young men in 1990, 1992 and from 1996 to 2000 or of the same proportion as that of men from 1994 to 1995 and in 2001 Cambodia 0.2 (0.4) 0 Indonesia Malaysia (0.8) (0.2) 0.2 The Philippines Singapore (0.1) Thailand (0.1) 0.8 (0.4) (0.3) (0.7) (1.7) (1.2) (1.0) 0 Notes: Table 5.6 Differential in Youth Male-Female Unemployment Rates (in percentage points) Country (1) Youth male-female differential is obtained by deducting the female unemployment rate from the male unemployment rate. (2) Figures in parenthesis mean that the males have higher unemployment rate than females. The trends in the unemployment of the youth are influenced by several barriers that limit their success in finding employment and integration into the labour market. Being new entrants to the labour force, the youth lacks skills, experience, on-the-job training, and know-how (ILO, KILM9. Youth Unemployment _ KILM and ASEAN News Release 20 March 2003). Their transition from a school environment to the workplace further poses some difficulties in seeking employment opportunities. Seriously concerned with these challenges, the declarations of the ASEAN Labour Ministers show their commitment to address youth unemployment and the barriers that hinder the employment potentials of the youth. Job creation and the provision of self-employment or entrepreneurship opportunities are key strategies that enable absorption of young workers into the workplace or their participation in economic activities. 188 Labour and Employment

17 Other programmes that aim at building their capacities, in general, or enabling them to acquire the necessary and appropriate skills and competencies, in particular, include training/re-training and skills and leadership development, technical assistance, and life-long learning opportunities. A closer collaboration between employers and academicians will enable proper matching of the supply and demand for labour and will better prepare young workers to the requirements of certain types of work. Multi-sectoral partnership and networking need to be intensified as well towards more effective, permanent and holistic resolution of youth unemployment. Ultimately, all interventions will not only boost economic growth but also lessen the occurrence of social problems due to the unemployment of the youth. ILO Comparable Unemployment Rate To respond to the non-comparability of unemployment data among countries not only in the region but worldwide, the ILO generates the so-called, ILO comparable unemployment rate. The estimates represent country unemployment rates that have been adjusted by the ILO to strictly conform to the international concept of unemployment which is measured using three criteria - without work, seeking work in a recent past period and currently available for work. The ILO comparable unemployment rates are available for some 30 countries which include only two in the ASEAN region, namely, the Philippines and Singapore. The ILO comparable unemployment rates from the ILO for 1990, 1995 and from are shown in the Annex for reference of users. DISTRIBUTION OF LABOUR Employment Proportion by Sector The economy is usually divided into three main sectors - agriculture (primary sector); industry (secondary sector); and, services (tertiary sector). The indicator, employment proportion by sector, provides information on the level of development in a country. The highlights of the results of ILO analysis of the data of 200 economies on employment distribution by sector state that a strong correlation exists between the distribution of economic wealth and employment by sector (ILO, KILM 4. Employment by sector KILM ). Specifically, the ILO report cites that the share of employment in services is largest in wealthier economies as measured by GDP per capita and the poorer economies are largely agriculture-based. Furthermore, an increasing share of employment in the services sector signals entry into a post-industrial state. The country data (table 5.7) do not allow a generalization for the whole ASEAN region on the level of development. By country, however, the predominant sector based on employment concentration can be observed using the latest year for which data are available. Four countries are predominantly agricultural, that is, with at least 50% share of agriculture. These are, Lao PDR (85%), Myanmar (77%), Cambodia (70%), and Viet Nam (68%). Among the three sectors, agricultural employment also has a higher proportion in Thailand at 47%. On the other hand, a higher concentration of employment is in Labour and Employment 189

18 the services sector in three countries, namely: Brunei Darussalam (80%); Singapore (74%); and, Malaysia (52%). In the Philippines, a lager share of employment is in the services industry at 47%. Figure shows a consistent decline in agriculture-based employment in Cambodia, Malaysia, the Philippines, Thailand, and Viet Nam. With 26% employment in agriculture in 1990 for Malaysia, the rate went down by 10 percentage points in 2001 to almost 16%. The proportion of agricultural workers in Thailand dropped from 63% in 1990 by almost 16 percentage points to 47% in On the other hand, a reverse trend is observed in Myanmar where the proportion was estimated to increase by almost 21 percentage points from 56% in 1990 to 77% in From 1996 to 2001, the share of agricultural employment consistently remained within the 41% to 45% range in Indonesia. Figure Proportion of Employment in Agriculture, in % On employment in industry, an increasing trend during the twelve-year period (figure 5.5.2), although at a slow pace, is observed in Malaysia (28% in 1990 and 32% by 2001) and Thailand (14% in 1990 and 20% by 2001). On the other hand, the share has remained relatively stable in Indonesia at 18% from 1999 to 2001; the Philippines at 16% from 1998 to 2001; Thailand at 19% in 2000 to 2001; and, Viet Nam at 12% since A decline by 10 percentage points occurred between 1991 (35%) and 2001 (25%) in Singapore using its survey data. Meanwhile, the available data for Lao PDR show the percentage of employment in industry at 4% in Labour and Employment

19 Figure Proportion of Employment in Industry, in % In the services sector, a smooth upward direction is shown (figure 5.5.3) for Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam based on their data during the period under review. Of these countries, Singapore, Thailand and Brunei Darussalam attained an increase in the proportion of employed persons in the services sector ranging from 9 to 12 percentage points between 1990/91 and In Lao PDR, employment in services stood at 11% in Figure Proportion of Employment in Services, in % Labour and Employment 191

20 Definition: Unit of measurement: % Table 5.7 Employment Proportion by Sector Percent distribution of employment into three broad groupings: agriculture, industry and services, or the percentage of employed in agriculture, industry and services to the total employment. Country Agriculture Brunei Darussalam Cambodia Indonesia Lao PDR 85.4 Malaysia Myanmar The Philippines Singapore Thailand Vietnam Industry Brunei Darussalam Cambodia Indonesia Lao PDR 3.5 Malaysia Myanmar The Philippines Singapore Thailand Vietnam Services Brunei Darussalam Cambodia Indonesia Lao PDR 11.1 Malaysia Myanmar The Philippines Singapore Thailand Vietnam Notes: Myanmar official estimates. No estimates for wholesale and retail trade and restaurants and hotels from and details do not include other activities that cannot be adequately classified. Singapore employed refers to persons aged 15 years and over in June of the respective years and industry refers to the major kind of activity undertaken by the establishment, enterprise, firm or organisation in which the person worked during the reference period. It is related to the principal class of goods produced or services rendered by the organization. The classification of industries is based on the Singapore Standard Industrial Classification (SSIC), as follows: (i) data for 1990, 1995, 200 and 2001 are classified according to SSIC 2000; (ii) data for 1998 and 1999 are classified according to SSIC 1996; and (iii) data for and are classified according to SSIC Data by industry exclude Others which covers Agriculture, Fishing, Mining and Quarrying, Utilities and Activities Not Adequately Defined. Sources: Brunei Darussalam 1995 Labour Force Survey and 1991 Population Census. Cambodia Socio-Economic Survey of Cambodia Oct93-Sept94, , Demographic Survey Apr95-Mar96, 1998 Population Census of Cambodia; and Labour Force Survey November 2000 & Indonesia National Labour Force Survey except for 1995 data which was generated by the National Socio-Economic Survey and data for 2000 exclude the province of Maluku, Lao PDR-Lao Census Malaysia The Labour Force Survey (Quarterly). Myanmar Labour Force Survey 1990 and later years are estimates and data for to are fiscal year (April-March). Singapore Data for 1990 and 2000 are from the Census of Population; data for 1995 are from the General Household Survey; and data for , and 2001 are based on the mid-year Labour Force Survey. Thailand Labor Force Survey Round 3 (August). 192 Labour and Employment

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