Algeria: Selected Issues Supplemental Information
Author:
International Monetary Fund
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Publication Date:
12 Mar 2003
eISBN:
9781451811421
Language:
English
Keywords:
ISCR; CR; fiscal policy; oil price shock; employment opportunity; Algeria; employment growth; a number of employment program; employment elasticity; civil service employment; regulation scheme; Labor force; Labor markets; employment creation
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This Selected Issues paper and Statistical Appendix deals with the issue of low growth in Algeria. A growth-accounting exercise indicates that negative total factor productivity growth explains Algeria’s low growth rates. This paper highlights the sources of this low growth that mainly consist of incomplete structural reforms and the weaknesses of Algeria’s institutions. It describes policy recommendations, focusing on the institutional reforms required to improve the business environment. The paper also analyzes Algeria’s monetary policy in the context of volatile hydrocarbon revenues.

Abstract

This Selected Issues paper and Statistical Appendix deals with the issue of low growth in Algeria. A growth-accounting exercise indicates that negative total factor productivity growth explains Algeria’s low growth rates. This paper highlights the sources of this low growth that mainly consist of incomplete structural reforms and the weaknesses of Algeria’s institutions. It describes policy recommendations, focusing on the institutional reforms required to improve the business environment. The paper also analyzes Algeria’s monetary policy in the context of volatile hydrocarbon revenues.

Labor Market Developments, Challenges, and Policies

Since the mid-1980s, Algeria has shared with other countries of the Middle East and North Africa (MENA) region rising unemployment due to the combination of stagnant growth and demographic pressures. Despite rapid civil service expansion and active labor market policies, employment growth in Algeria has failed to match a labor force growing by an estimated 250,000 people a year. Mounting unemployment, which disproportionately affects the young, has progressively deteriorated social conditions and largely contributed to the mounting social discontent in recent years. The first section of this paper looks at the key features of the labor market in Algeria, and the second part describes past and current policy responses and remaining challenges.

I. Key Features of the Algerian Labor Market

A. Background

1. Population growth in Algeria has been historically very high. Between 1977 and 1987 the population grew at an annual average of 3.1 percent, and remained at a still high 2.8 percent in the late 1980s before tapering off to an average of 2.3 percent during the 1987–98 period and 1.5 percent in 1999–01 (Table 1). This fast growth has translated into rates of growth in the young adult population (ages 15–34) in excess of 3.8 percent per year during the 1980s (extremely high rates of growth by international standards). According to United Nations estimates, the comparable rates of growth of the young adult population for the 1990s were 3.1 percent for the MENA region and 2.8 percent for all developing countries. Despite the progressive aging that took place in the 1990s, the age structure of the population remains young. In 1998, 48 percent of the population was under the age of 20, down from 55 percent in 1987.

Table 1.

Algeria: Labor Force and Unemployment 1990–2001

article image
Source: Algerian authorities.

Including military draft and irregular employment.

2. From independence to the mid-1980s, Algeria’s answer to the demographic challenge has been to follow a state led development path emphasizing human capital development and giving high priority to employment and the social sectors. Buoyant fiscal revenues strengthened by strong economic growth averaging about 6 percent annually allowed for the maintenance of average expenditures on education and health of about 10 percent of GDP. Basic social indicators improved dramatically. During those years of high growth, civil service employment grew faster than the labor force in order to support the rapid expansion of public services in education and health and to provide jobs for the educated workforce.

3. With the advent of the 1986 oil shock,1 Algeria underwent a prolonged economic crisis that slashed growth to a mere 1.5 percent per year on average over 1987-2001, thus contributing to rising unemployment and poverty.

B. Labor Force Dynamics

4. Increased participation rates. The very high rates of growth of the working age population are compounded by increasing participation rates. According to data from the population censuses, crude activity rates2 increased from 18 percent in 1977 to 23 percent in 1987 and 27 percent in 1997. During that same period, the participation rate among those aged 15–64 steadily increased from 36 percent to about 48 percent on account of both rising male and female participation rates. It is true that this rapid acceleration occurred from a particularly low initial level (below that of other countries in the region), attributable to the large school enrollment and low participation of women. However, female labor force and participation rates appear to be growing especially fast despite increased schooling, which initially had led to declining participation rates for young women. According to census data, female employment grew at a rate of about 6.2 percent per year from 1977 to 1987 compared to 4.8 percent for males, and female participation rate for the working age population (15–59 years old) surged from about 9 percent in 1991 to 15 percent in 2001. The largest increases were for women of prime working age, 25–29 and 30–34.

5. Employment lags behind labor force growth. As a result of the higher rates of population growth of the earlier decades and the rapid growth of participation rates, the labor force grew much faster than the population in the 1980s and up to the mid-1990s, averaging 4 percent in 1981–95, before slightly tapering off to an estimated average of 3.1 percent in 1996–01 (Table 1). In 2001, the labor force was estimated at about 9 million (29 percent of the population).

6. Since 1985, the pace of employment creation has been insufficient to absorb the large number of new entrants in the labor force, thus resulting in rising unemployment from 10 percent in 1985 to close to 30 percent in 2000 (Table 1 and Figure 1). However, the Algerian definition of unemployment is wider than that of International Labor Organization’s (ILO) and may thus tend to overestimate Algeria’s unemployment rate compared to other countries.3

Chart 1.
Chart 1.

Algeria: Evolution of Labor Force and Employment, 1991-2001

(In percentage change)

Citation: IMF Staff Country Reports 2003, 069; 10.5089/9781451811421.002.A004

Source: Algerian authorities and IMF staff.

7. In 2001, 2.5 million Algerians were unemployed,4 up 13 percent from 1996 and more than twice the level of 1991, while formal employment,5 at 5.2 million in 2001, grew by only 12 percent since 1996 and 23 percent since 1991. Even accounting for the growth of the informal sector, total employment, at 6.6 million in 2001, grew by only 17 percent since 1996 and 36 percent since 1991. In 2001, for the first time in over a decade, unemployment fell in absolute level.

8. Algeria’s elasticity of employment to growth was high in 1990–2000 by international and regional standards (Table 2). Over this period, employment elasticity to non-oil GDP, at 1.7, was the highest among countries of the Middle East and North Africa (MENA) and Gulf Cooperation Council (GCC) countries. However, employment growth could not match the rapid growth of the labor force and Algeria lagged behind other MENA countries in employment elasticity to labor force. The lack of job opportunities thus reflects inadequate output growth rather than a low employment content of growth.

Table 2.

Algeria: MENA-Comparative Employment Elasticity, 1990–2000

(Average annual percentage change; unless otherwise specified)

article image
Sources: World Bank; WEO; and Fund staff estimates.

9. Sectoral elasticities show that government employment accounted for a meaningful share of employment growth. While real GDP remained virtually flat during 1985–95, total employment expanded by 31 percent, from 4.06 million to 5.32 million; of this, government employment rose from 900,000 to 1.25 million. Sectoral elasticities have also fluctuated widely during 1991–95. In agriculture, the most labor-intensive sector, the elasticity of employment to GDP growth was close to one. In the rest of the economy, the average elasticity during 1991–95 was very high as public enterprises continued to recruit despite stagnating output.

10. Nonhydrocarbon sector growth has been consistently weak from 1990–00. Considering the highly capital-intensive nature of the hydrocarbon sector, job creation takes place mostly in the nonhydrocarbon sectors where average growth during 1990–00 period was a paltry 1.7 percent a year, significantly below the labor force growth rate (Table 2).

11. Algeria exhibited negative labor productivity growth over 1990–01. With public sector productivity growth typically lagging behind the private sector, the high share of public employment came at a cost of negative productivity growth and a corresponding fall in real wages. A breakdown of labor productivity between capital deepening and Total Factor Productivity (TFP) growth shows that TFP growth has been negative on average over this period.

C. The Structure of Unemployment

12. In view of the demographic trends in Algeria, unemployment has affected mainly the young, those who live in urban areas, and those with mid-level education (typically secondary education). Unemployment spells last longer than a year on average.

13. Youth unemployment. The unemployment rate among the young is nearly twice the global rate, in line with trends in other Mediterranean countries. In 2001, about 46 percent of the labor force aged 20–24 were unemployed. The likelihood of being unemployed falls rapidly with age and among the labor force aged 30 and older only about 14 percent were unemployed (Figure 2). Given the large share of the young in the total labor force, this implies that the bulk of the unemployed are under 25 years old, thus raising major social and political concerns in part because of weaknesses of the social safety net.

Figure 2.
Figure 2.

Algeria: Unemployment Rate by Age Group, September 2001

Citation: IMF Staff Country Reports 2003, 069; 10.5089/9781451811421.002.A004

Sources: Algerian authorities and IMF

14. Education and unemployment. Unemployment in Algeria disproportionately affects first time job seekers and those with lower educational backgrounds. In 2001, data from the Planning Authority show that over 68 percent of the unemployed had educational levels below the secondary level. The 16–19 years old represented 25 percent of unemployment in 1997.

15. While in the early 1990s people with mid-level education were severely affected by unemployment,6 from 1995 onwards the pattern appears to have shifted towards increasing unemployment at lower levels of education. Unemployment appears to have increased substantially among illiterates, or for those with only basic literacy skills, or with a primary level of education. Notwithstanding this trend, primary school degree holders were generally more successful at finding jobs than secondary education holders because they were likely to work in the informal sector, as self-employed or home-employed, while the latter group typically lined up for the few jobs available in the formal sector and most notably the secure jobs in public administration. As recruitment in the public sector slowed down from the second half of the 1980s, graduates had to wait longer before being offered a job. During 1990s, there is evidence of lowered expectations of the unemployed with respect to accepting jobs matching their qualifications or desired job location. In 2000, according to the Planning Authority, 90 percent accepted a job below their qualifications, compared to 82 percent in 1990.

16. Another factor that has compounded the rise in secondary education unemployment is the mismatch between the education received, mostly in the social sciences, with the job opportunities offered by the private sector. Data from statistical surveys show that, for 2001, 9.3 percent of the unemployed held a higher education degree, up from 3.4 percent in 1989, and 22.3 percent held a secondary school education, up from 19.9 percent in 1989. One reason for the high unemployment of the better educated may be that graduates were traditionally absorbed by the public sector, and schools developed their curricula accordingly. Another source of mismatch could be inefficient job intermediation. Only since 1990 are employers free to hire as they wish. All vacancies still need to be registered with the public employment agency (Agence Nationale pour l’Emploi (ANEM)), although ANEM’s role has declined as firms increasingly developed their own recruitment channels. Finally, there is evidence of some rigidities at the supply level: University graduates typically prefer to line up for the few secure and well-paid jobs in the formal sector, especially the public sector, rather than accept insecure employment in the private or informal sectors, thus adding pressure to the unemployment in the formal sector.

17. Urban and rural unemployment. Reflecting the exodus from rural areas into cities, the urban population has been growing much faster than rural population, at about 4.8 percent on average during 1981–90 and over 6 percent during 1991–01. It is only in the mid-1990s that urban population growth began falling below 4 percent. Urban unemployment has constantly outpaced the national average as unemployment in agriculture is particularly small, considering the prevalence of self-employment and unpaid family employment in agriculture. In 2000, urban unemployment was 33 percent and rural unemployment 28 percent.

18. Duration of unemployment. Data on the share of long-term unemployed—those without a job for more than one year—in total employment are not available. Based on labor surveys, the average length of unemployment spells increased from 23 months in 1991 to more than 30 months in 1995. Average unemployment length peaks at 36 months for the 25–34 year age group, and duration is longer for men than for women. Anecdotal evidence indicates that the long-term unemployed in Algeria are likely to be much younger than, say, in Europe. The 16–19 year old tranche of job seekers face particular difficulties in finding employment, as they generally do not have the qualifications or experience and may be called for the military service. This tranche represented 25 percent of the unemployed in 1997.

19. The rigidities of the legislative labor framework may have significantly contributed to deepening structural unemployment and lengthening its duration. Prior to 1990, The dismissal of workers was particularly difficult and costly for employers, and flexible work arrangements, whether in the form of short-term contracts or part-time work, were not allowed. As a result, employers limited hiring even during periods of relative growth, or turned to the informal sector to bypass the rigidities of the labor code. Law 90-11 and other labor code reforms introduced some flexibility in the labor legislation. In particular, no prior administrative authorization was needed for dismissal of workers for economic reasons and more flexible work arrangements were allowed. However, as noted below, further reforms are needed.

D. The Informal Sector

20. The informal sector grew rapidly. The formal sector in Algeria groups all public sector establishments as well as private sector firms with at least 10 employees and some of the small firms. The informal sector is composed of small firms as well as most of the self-and home-employed. Job protection legislation, minimum wage legislation, and sectoral or national wage agreements cover only the formal sector. The growth of informal employment, as recorded in official statistics (Table 1), has averaged an estimated 10 percent annually over 1991–97 and 6.3 percent annually over 1997–01. Labor market legislation and official wage settlements are nonetheless likely to be important for the informal sector as well, if only because job market legislation and official wage bargaining will strongly influence the relative size of the formal and informal sectors.

E. Wage Trends

21. Information on wages is scarce, except for the legally binding minimum wage (salaire national minimum garanti, SNMG), which is set by the “tripartite” committee, which includes the government, the labor union (Union Générale des Travailleurs Algériens, UGTA), and employers at the national level, and to which the private sector is also legally bound. SNMG remained fixed at DA 4,000 from January 1994 to July 1997 (while consumer prices recorded a cumulative increase of about 85 percent during this period) before being raised by 50 percent over 15 months (July 1997-September 1998) to offset the adverse impact of high inflation. It was increased again by one-third in 2001.

22. Civil servants’ wages are determined according to a salary structure which, in the past, was also valid for public enterprises. Following the introduction of the new labor code in 1990, public enterprises have been granted more autonomy in the wage-setting process. However, civil service salaries still serve as a reference point in the determination of wages in public enterprises. Civil servants’ wages were raised by 10 percent in July 1997, by 5 percent in January 1998, and by 5 percent again in September 1998. There was no increase in 1999 and 2000. In 2001, wages were raised by 15 percent and more for those civil servants subject to the SNMG. Overall, according to World Bank data, real wages in the civil service have fallen sharply from 1991 to 1995, before stabilizing on average over 1996–2000.

II. Policy Responses to the Unemployment Challenge

A. Policy Response

23. In response to the above challenges, the authorities initiated a three-pronged approach. First, the civil service was expanded in the early 1980s to absorb unemployment pressures; second, a number of employment programs were subsequently established; and third, a number of reforms of the institutional and legislative framework were carried out to improve labor market flexibility.

Civil Service Employment

24. The civil service was used as a tool to reduce unemployment, thus putting pressure on the government’s wage bill. During the years of high growth, civil service employment grew faster than the labor force to support the rapid expansion of public services in education and health and to provide jobs for the educated work force. The first attempts at adjustment included a decline of the wage bill from 12 percent of GDP in 1986 to 8 percent of GDP in 1991 through reduction in the real wage. However, as the economic situation deteriorated in the early 1990s, the civil service was again used to mitigate unemployment pressures. The 1994 stabilization program cut the government wage bill, as a result of a freeze in nominal wages, but with labor force pressure and the lack of alternative employment outlets (limited employment growth in the private sector and public sector retrenchment), the government allowed civil service employment to continue growing.

25. However, the policy of containing the wage bill in relation to GDP through real wage adjustments rather than reductions in the number of employees has reached its limits. The size of the civil service in Algeria is high even by regional standards (Figure 3). Data show that public administration is large in Algeria, compared to its north African neighbors. While there is room for reducing staffing in the civil service, further real salary cuts cannot be used as a means of diminishing the overall cost without seriously affecting the incentive system and the effectiveness of public services.

Figure 3.
Figure 3.

Algeria: General Civilian Government Employment and Wage Bill as Share of GDP in Algeria, Morocco, Tunisia, and Egypt

(Latest average year, 1997–99)

Citation: IMF Staff Country Reports 2003, 069; 10.5089/9781451811421.002.A004

Sources: World Bank.
Active Labor Policies

26. In response to high unemployment, the government has actively promoted over the years a wide array of employment programs including wage subsidies, micro-credit, public works, employment services, and in-house training (Table 3). A large number of these programs have especially targeted the unemployed youth. However, those schemes, with few exceptions, have been inefficient, and their overall impact and coverage have been relatively low. Over time their main objective, which is to provide impetus for labor force insertion, was lost and they were increasingly relied upon, unsuccessfully, as a mechanism to absorb large-scale unemployment.

Table 3.

Algeria: Evolution of Employment Regulation Schemes, 1997–2001

article image
Source: Algerian authorities.

in DA million.

Youth Employment Schemes

27. Uneducated youth. The main employment scheme targeting youth is the emplois salariés d’initiative locale (ESIL), which aims at providing low-skilled youth with minimum qualifications and experience to enhance their employability. The ESILs work through subsidies that give businesses incentives to hire the unemployed. There were about 178,500 beneficiaries in 2001 (about 74,700 in full time equivalent). The efficiency of this scheme has been questioned because of the very low retention rate (during 1990–98, for the million jobs that benefited from this scheme, the retention rate at the end of the subsidy period was only 2 percent).

28. Educated youth. In 1998 the authorities created the Contrats Pré-Emploi (CPEs) whereby the government, through a monthly allowance amounting to the minimum wage, pays for the first year salary of first-time unemployed educated youth to enterprises who hire them. There were about 3,443 beneficiaries in 2001, down from 9,311 in 2000.

29. Micro-enterprise schemes for the youth. A new micro-enterprise scheme, in which more attention was paid to profitability of projects than in similar past programs, was introduced in 1997. This scheme is managed by the Agence Nationale pour le Soutien à l’Emploi des Jeunes (ANSEJ), which is in charge of a first analysis of investment projects and of deciding whether they can be submitted to banks.

Even in the case of a positive answer by ANSEJ, banks still have the option of denying the financing request. A personal financial contribution is required from the applicant. The ANSEJ’s contribution may take various forms: (a) an interest subsidy on the banks’ loan; (b) an advance that must be repaid after the loan is paid off; and (c) a subsidy if the project is deemed promising enough. The efficiency of this scheme has not yet been assessed. According to the authorities, 16,000 projects were implemented in 1998, which could lead to about 47,000 newly created jobs.

Public works schemes to fight poverty

30. The Indemnité d’Activités d’Intéret Général (IAIG) is designed to provide compensation to the poor who are able to work. They can be hired below the minimum wage (DA 2,800 a month) on the basis of an eight-hour work day, in community-based activities such as reforestation and street cleaning. The modest remuneration was designed to ensure self-targeting of those who were ready to work at lower wages, In practice, the full minimum wage is sometimes paid, especially in urban areas. In 2001, there were about 130,000 beneficiaries of IAIG (compared to 500,000 in 1996). There is room for improving the targeting of this program, which currently may not clearly benefit the most disadvantaged.

Schemes targeting the unskilled unemployed

31. Another scheme, targeting the unskilled unemployed, is the travaux d’utilité publique à haute intensité de main d’oeuvre (TUP-HIMO), which offers temporary jobs paid at the minimum wage in labor-intensive, community-based activities such as road maintenance. The labor content of TUP-HIMO projects tends to be higher than in IAIG projects. There were about 14,600 beneficiaries of TUP-HIMO in 2001, sharply down from about 119,000 in 1997. TUP-HIMO projects are not financially sustainable, Private contractors are overly regulated and there are delays in payments. Beneficiaries are not involved in the selection of projects, which are legally owned by government agencies, and once projects are completed, the local communities are not responsible for their maintenance.

Schemes targeting economic layoffs

32. In 1994, two schemes were created to assist workers laid off for economic reasons: unemployment insurance and early retirements. They covered about 250,000 people in 1999. They are available theoretically to both the public and private sectors, but in practice they are essentially used in the context of public enterprise restructuring. The Caisse Nationale d’Assurance Chomage (CNAC) has expanded beyond its initial mandate of providing unemployment insurance and established programs of assistance in retraining, support for entrepreneurship and job search, and managerial assistance for enterprises facing difficulties. The unemployment insurance revenues derive from payroll taxes paid by both employers (2.5 percentage points of taxable wage) and employees (1.5 percentage points). In addition, every time an employee is fired, the employer is required to pay an initiation fee to the insurance company amounting up to one year salary (depending on seniority); moreover, the employee receives a severance package equal to three months salary. Unemployment benefits start after three months following registration with the unemployment agency and extend from a minimum of one year to a maximum of three years at a rate of two months per contribution year to CNAC. Unemployment benefits are based on a reference salary (SR, computed as the average of the minimum wage (SNMG) and the average wage received during the last year preceding layoff) and decrease over the duration of the benefits period, with 100 percent of the SR in the first quarter, 80 percent in the second quarter, 60 percent in the third quarter, and 50 percent in the last quarter. Recipients also benefit from full social security coverage (medical insurance and family allowances), which lapse one year following the end of the unemployment benefits period.

Vocational and training system

33. Algeria has a large vocational and technical training system that is mainly operated by the Government. It provides about 290,000 positions to train skilled workers and technicians using institution-based training and apprenticeships. The system provides in practice a mechanism to absorb students dropping out of the formal education system and unemployed youth. Graduates of these programs are often ill-prepared for the job market and usually remain unemployed for long periods. The dropout rate is high (18 percent). The system has also weak linkages to the job market and its proposed qualifications could better match market needs. According to the authorities, its function needs to be assessed in order to improve its performance.

Reforms of the Institutional and Legislative Framework

34. Aware of the structural issues underlying the growth of the informal market and the reluctance of the formal private sector to increase employment, the authorities have initiated in 1990, a reform of the institutional and legislative framework to improve labor market flexibility and a reduction of taxes on labor. In particular, Law 90.11 on labor relations, which superseded the existing labor code, allowed employers greater flexibility in hiring and firing decisions and the use of short-term contracts. Other reforms allowed free negotiations over salaries and working conditions. Legislation on part time and work at home were introduced. Since 2001, wage-based contributions (e.g., the versement forfaitaire) have been reduced to foster employment opportunities, especially in the formal sector.

B. Remaining Challenges

Reducing the Role of the Public Sector in the Labor Market and Providing the Appropriate Incentives for the Private Sector to Take Over in Generating Future Growth and Employment

35. The three-pronged approach of the authorities has slowed the deterioration of the job market. Unemployment growth has dropped from an average of 13 percent in 1990–95 to around 4 percent in 1996–00, and the unemployment rate fell for the first time in over a decade to 27.3 percent in 2001 from 29.5 percent in 2000. The number of layoffs by enterprises has been falling consistently from 83,000 in 1998, to 314 in 2000 and 174 in 2001. Labor productivity has improved in the industrial sector since 1998.

36. However, the above achievements come at a great cost and would be short-lived if the private sector was not provided with incentives to unlock its potential and become a future engine of growth. Only private sector growth could absorb the projected 280,000 to 300,000 annual new entrants to the labor market in the next decade. For this to happen, steadfast implementation of reforms aimed at lowering the role of the public sector in the economy (restructuring and privatization of public enterprises and the financial sector) and freeing the private sector to grow and compete (trade liberalization, friendly environment for foreign investment, resolving the pending issue of land property rights, and developing long term financing options) is required.

Further Reforming the Institutional and Legislative Framework to Increase Labor Market Flexibility and Lower Labor-Based Taxes

37. Notwithstanding Law 90.11 and other labor code reforms implemented so far, there are still rigidities in labor market legislation and practices. In the case of dismissal of workers for economic reasons, although no prior administrative authorization is needed, the decision can be brought to a labor tribunal and lengthy delays can occur. Labor shedding is possible for restructuring public enterprises, but only as a last resort after collective negotiations (arbitrated by labor inspectors) fail to provide alternative solutions (including reduction of wages and/or working hours and early retirement). The high initiation fees imposed on firms by unemployment insurance may discourage hiring, and the long duration of benefits (up to 3 years) may discourage job search, thereby swelling the ranks of the long-term unemployed. Also, ANEM’s monopoly over job search assistance and placement services (private employment firms are not allowed), its central management and absence of links with enterprises, and its lack of appropriate staff and information technologies, have greatly reduced its usefulness as a mechanism to mitigate coordination failures in labor markets.

38. More importantly, labor-based taxes (including social security contributions and other non wage costs) and taxes on labor-intensive activities in the formal sector remain substantial and continue to deter activities away from the formal sector, slow down the demand for labor in that sector, and exacerbate the shift of unskilled workers into the informal sector. More progress on this front would go a long way in alleviating employment growth shortfall and empowering the private sector to lead in generating employment.

Reforming the Educational and Vocational Training System

39. The substantial levels of unemployment among the educated population point to the need to urgently reform the educational system to provide skills profiles that are required by the growing private sector and international competitiveness. The employment schemes also need to be reviewed to increase their efficiency and targeting. Public work programs have produced good results, and problems relate mainly to better targeting mechanisms, eligibility criteria, and governance. With adequate self-targeting mechanisms (low wages and labor-intensive activities), they can effectively provide disadvantaged groups with temporary employment and a safety net, and can lead to infrastructure development. However, they are not cost-effective if the objective is to provide gainful permanent employment.

1

In 1986, the price of crude oil fell by almost 50 percent compared to 1985.

2

The crude activity rate is the ratio of economically active population to total population.

3

According to the ILO, the “employed” are those who worked for at least one hour for pay, profit, or any other remuneration during the reference week of the survey or census conducted; those who worked zero hours but were actively seeking work are classified as unemployed. In Algeria, the labor force sample survey defines the unemployed as “all those who declare themselves to be unemployed” in the reference week, who are “not occupied during that week, and who are looking for work and ready to work if required.” Thus, individuals who are underemployed (effectively working only for a few hours a week or holding a job only during the reference week) can classify themselves as unemployed.

4

Data provided by the Planning Authority for 2001. These data differ slightly for labor force and employment from data for September 2001 published by the National Statistical Office (ONS), which show 2.3 million unemployed, although the resulting unemployment rate, at 27.3 percent, is the same for the ONS and the Plan.

5

Excluding the informal sector, military draft, and irregular employment (Table 1).

6

Middle school graduates had the highest rates of unemployment in 1990 and 1991 followed by secondary school graduates (26–30 percent in 1991). The unemployment rate was lowest among those with post-secondary education (6 percent) and those with no education (14 percent).

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Cover IMF Staff Country Reports
Algeria: Selected Issues and Statistical Appendix
Author:
International Monetary Fund
Volume/Issue:
Volume 2003: Issue 069
Publisher:
International Monetary Fund
ISBN:
9781451811421
ISSN:
1934-7685
Pages:
97
DOI:
https://doi.org/10.5089/9781451811421.002
  • Chart 1.
    View in gallery
    Chart 1.

    Algeria: Evolution of Labor Force and Employment, 1991-2001

    (In percentage change)

  • Figure 2.
    View in gallery
    Figure 2.

    Algeria: Unemployment Rate by Age Group, September 2001

  • Figure 3.
    View in gallery
    Figure 3.

    Algeria: General Civilian Government Employment and Wage Bill as Share of GDP in Algeria, Morocco, Tunisia, and Egypt

    (Latest average year, 1997–99)

Chart 1.

Algeria: Evolution of Labor Force and Employment, 1991-2001

(In percentage change)
Figure 2.

Algeria: Unemployment Rate by Age Group, September 2001
Figure 3.

Algeria: General Civilian Government Employment and Wage Bill as Share of GDP in Algeria, Morocco, Tunisia, and Egypt

(Latest average year, 1997–99)