A. Background

1. Jordan has made significant progress in closing gender gaps in education and health. Jordan has the highest rate of female literacy at nearly 98 percent in comparison to other countries in the Middle East and North Africa (MENA) region (around 80 percent). The gap between male and female enrollment in primary and secondary education has been negligible for over the past decade (Jordan has been similarly outperforming regional comparators in this indicator), and women even constitute the majority of those enrolled in tertiary education (36 percent female enrollment as compared to 30 percent male enrollment in 2019). Fertility rates have been on the decline (the average in 2019 was 2.7 as opposed to 3.7 in 2009 and 4.1 in 2000), and maternity deaths are low (46 deaths per 100,000 live births).

2. Despite a highly educated female population, participation in the labor force has been historically low and unemployment high. The average labor force participation rate for women in Jordan has been around 14 percent for 2009–19 as compared to male participation rates of 62 percent for the same period. Average unemployment rates for females are also higher for 2009–19 at 23 percent in comparison to males at 12 percent. Jordan’s female labor force participation rate is also lower than countries with similar income per capita (46 percent for middle income countries for 2009–19), including within the MENAP region (20 percent).

3. The COVID-19 pandemic exacerbated unemployment outcomes for women and young females. In 2021Q4, female unemployment rates reached 31 percent, and female labor force participation over the same period was 13.6 percent. A study showed that around one in three working women in Jordan lost their job at the onset of the pandemic and those who were able to keep theirs witnessed reduced wages.² Unemployment rates for young females (aged 15–24) was twofold at almost 67 percent with them even though they are twice as likely to participate in the labor market with an average rate of 30 percent. Young females were significantly impacted as they were the first to lose their jobs during the COVID-19 pandemic with the unemployment rate reaching 85 percent in 2020Q4. While male unemployment rates marginally increased at the onset of the pandemic, it has managed to slightly recover as pandemic-related restrictions eased and the economy in Jordan opened.

Labor Market Trends in Jordan

Citation: IMF Staff Country Reports 2022, 222; 10.5089/9798400215582.002.A001

Note: Young males and females defined as those between the ages of 15–24.Sources: Jordan Department of Statistics, and IMF staff calculations.

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Labor Market Trends in Jordan

Citation: IMF Staff Country Reports 2022, 222; 10.5089/9798400215582.002.A001

Note: Young males and females defined as those between the ages of 15–24.Sources: Jordan Department of Statistics, and IMF staff calculations.

• Download Figure
• Download figure as PowerPoint slide

Labor Market Trends in Jordan

Citation: IMF Staff Country Reports 2022, 222; 10.5089/9798400215582.002.A001

Note: Young males and females defined as those between the ages of 15–24.Sources: Jordan Department of Statistics, and IMF staff calculations.

• Download Figure
• Download figure as PowerPoint slide

B. Relevant Literature and Studies

Female labor force participation rates in Jordan have been inelastic to exogenous shocks to the economy, suggesting that the issue largely corresponds to structural and legal impediments in the labor market.

4. Studies have explored the main drivers of the gender gap in MENA labor market and have highlighted several determinants to female economic participation. These include structural barriers related to the level of economic development (demographics, education, and access to suitable infrastructure), unfavorable policies related to labor market regulation as well as tax and transfer systems, and legal barriers (Gonzales and others, 2015; Hakura and others, 2016; Hyland and others, 2020; Balima and Gomes, IMF forthcoming). Balima and Gomes (IMF, forthcoming) have shown that basic and financial legal rights are the biggest contributors to larger gender gaps in the MENA region compared to other income and regional groups.

5. Low level of job creation in Jordan, especially in the private sector, limits opportunities available for women. Anemic growth over the last decade has limited labor demand. At the same time, job opportunities in the public sector are diminishing given the limited fiscal space,³ and most newly created jobs are in the private sector, where women tend to be underrepresented.⁴ A study by the Jordan Strategy Forum (2016) found that there are only two sectors where women make up most of the workforce: education (at 63 percent) and health and social work (at 61 percent). These fields are saturated and do not typically offer high wages to employees or equal pay, especially in the private sector.

6. Social norms coupled with the lack of affordable childcare can play a role in limiting opportunities for women in the workplace. A survey by the World Bank⁵ found that 96 percent of respondents in Jordan agree that it is acceptable for women to work, but this statement was subject to several constraints. Nearly half of those surveyed considered it unacceptable for women to work if the job necessitated children be left with relatives, and over 70 percent believed that it was not suitable for women to accept a job that required them to return home after 5 PM. As a result of these factors and the lack of affordable childcare,⁶ half of women in the work force tend to exit after the age of 30.

7. Lack of access to safe and reliable public transportation can hamper labor market choices for women. The high cost and unreliability of public transport in Jordan, combined with concerns of sexual harassment, aggravates women’s already low participation in the labor force. The International Labor Organization (ILO) estimates that it reduces female participation probability by 16.5 percent.⁷ The impact is even more significant in countries such as Jordan with big gender gaps in the labor market, where 47 percent of women surveyed have turned down job opportunities due to the current state of public transportation.⁸ Private sector employment in Jordan tends to take place in urban settings, where many women would have to travel long distances and are faced with transportation constraints. On average Jordanian working women spend 48 minutes commuting to and from their jobs and spend around JD 57 per month on transportation costs.⁹ A survey by the World Bank found that 82 percent of female respondents believed that the longest acceptable commute time is 32 minutes on average, and around 44 percent think that women may face harassment either commuting to and from work or at work.¹⁰

8. Gender-based legal restrictions may also prevent women from participating in the labor market. Jordan’s overall score on the World Bank’s “Women, Business and the Law 2022” index is lower than the regional average in the Middle East and North Africa (46.9 out of 100 as compared to 53 for the region). In particular, Jordan has scored 0 out of 100 on laws and regulations that affect women in the workplace, as there is no legislation in place to deter from gender-based discrimination in hiring practices nor protect against harassment. The report noted that Jordan should consider reforms to improve legal equality for women.

9. Pay disparity between men and women, as well as limited opportunities to reach and maintain leadership positions, could disincentivize females from joining the labor market or accepting certain job opportunities. Despite Jordan having equal pay legislation, the World Bank estimated that wage gap in the private sector in Jordan in 2020 between women and men working similar jobs with similar education and experience is approximately 17 percent.¹¹ The gender pay gap is also high as women progress in their career. For example, male legislators, senior officials, and managers earn an average of JD 1,503 per month, whereas women in the same positions make JD 963.¹² In addition to the gender pay gap, women in Jordan do not have complete control over their finances. According to a study conducted by Jordanian National Commission for Women (JNCW), women are unable to spend their wages or are being deprived of inheritance rights. Only 27 percent of Jordanian women have their own bank account.¹³

10. Once women participate in the labor market in the MENA region, they are more likely to be unemployed. Assaad and others, 2020 observed that in the MENA region even if increases in participation occur, they are typically associated with a rise in unemployment rather than employment. This paradox can be primarily attributed to the change in employment opportunities in the public sector facing educated women in the MENA region, which has not been commensurately matched by an increase in jobs in the formal private sector. Women are also more likely to work in the informal sector¹⁴ and to have both lower wages and lower hours worked in comparison to men (Angel-Urdinola and Tanabe, 2012; Dabla-Norris and Kochhar, 2019; Assaad and others, 2020).

C. Methodology and Results

11. A series of regressions were employed to quantify the relative contribution of structural, legal, and policy factors to gender gaps in Jordan. A maximum likelihood estimator¹⁵ was used to examine the impact of four different types of factors on female labor force participation and employment gaps in Jordan: structural (fertility, education, and GDP per capita), infrastructure (access to electricity, drinking water, sanitation services, and childcare), public policies (retirement age, taxes, and social security transfers), as well as regulation (labor market legislation, basic legal rights, and financial-related legal rights). An index between 0 and 1 was constructed for each of these dimensions, with a higher value pointing to more favorable conditions for female labor force participation and employment,¹⁶ and then a regression framework was applied to quantify the role played by each index in determining labor market gender gaps in Jordan.

12. The analysis concludes that structural variables and regulations are the main drivers of the gender gap in participation and employment outcomes in Jordan. Based on the regression results, there is a statistically significant relationship between the structural variables and regulations and the gap in both participation and employment. The results for Jordan are also compared with the MENA region.

Maximum Likelihood Estimator Regression Results

Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Source: IMF staff calculations. Note: All coefficients have the expected sign, except for the infrastructure index for the MENA region (possibly reflecting its high correlation with the structural index, as countries with higher GDP per capita are more likely to have better infrastructure).

Maximum Likelihood Estimator Regression Results

	Jordan		MENA
Variables	Female-to-Male Labor Force Participation	Female-to-Male Employment	Female-to-Male Labor Force Participation	Female-to-Male Employment
Structural	1.153***	0.489*	0.232***	0.078
	(0.356)	(0.290)	(0.080)	(0.083)
Infrastructure	0.223	0.103	-0.166***	-0.189***
	(0.372)	(0.303)	(0.033)	(0.034)
Public Policy	0.025	0.020	0.115***	0.092***
	(0.042)	(0.034)	(0.027)	(0.028)
Regulations	0.611***	0.568***	0.122***	0.158***
	(0.210)	(0.171)	(0.033)	(0.035)
Observations	18	18	105	105
Number of countries	1	1	9	9

Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Source: IMF staff calculations. Note: All coefficients have the expected sign, except for the infrastructure index for the MENA region (possibly reflecting its high correlation with the structural index, as countries with higher GDP per capita are more likely to have better infrastructure).

View Table

Maximum Likelihood Estimator Regression Results

	Jordan		MENA
Variables	Female-to-Male Labor Force Participation	Female-to-Male Employment	Female-to-Male Labor Force Participation	Female-to-Male Employment
Structural	1.153***	0.489*	0.232***	0.078
	(0.356)	(0.290)	(0.080)	(0.083)
Infrastructure	0.223	0.103	-0.166***	-0.189***
	(0.372)	(0.303)	(0.033)	(0.034)
Public Policy	0.025	0.020	0.115***	0.092***
	(0.042)	(0.034)	(0.027)	(0.028)
Regulations	0.611***	0.568***	0.122***	0.158***
	(0.210)	(0.171)	(0.033)	(0.035)
Observations	18	18	105	105
Number of countries	1	1	9	9

Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Source: IMF staff calculations. Note: All coefficients have the expected sign, except for the infrastructure index for the MENA region (possibly reflecting its high correlation with the structural index, as countries with higher GDP per capita are more likely to have better infrastructure).

D. Policies to Boost Female Employment and Participation Opportunities

13. Raising female participation rates is critical to achieving sustainable and inclusive growth in Jordan. Increasing female labor force participation and employment outcomes can significantly boost GDP, productivity, and tax collections. Ostry and others, (2018) found that men and women complement each other in the workplace in terms of different skills, collaboration, and risk perception, and including more females in the workplace can boost productivity and incomes.¹⁷ The study also demonstrated that increasing women’s labor force participation and consequently employment generates gains in economic welfare, which can have a ripple effect to increased consumption, home production, and leisure time. These gains exceed 20 percent in the MENA region. Utilizing an occupational choice model, Cuberes and Teignier (2014) and Cuberes, Newiak and Teignier (2016) have also shown that the MENA is the region with the highest income loss due to low female participation, with an average loss of approximately 38 percent.¹⁸

14. Based on the results of the analysis, structural reforms to enhance female employment and participation potential should focus on:

• Improving the regulatory framework: this includes passing amendments to Labor Law that protect women from harassment and remove gender biased articles; ensuring adequate access to maternity and paternity leave benefits and destigmatizing its utilization; and addressing pay disparity including by enforcing the recently passed legislations on anti-discrimination in pay as well as raising awareness around dual income sources for families as an attractive option.

• Ensuring adequate access to infrastructure, including childcare facilities and public transport: this entails continued efforts on improving access to childcare and lowering the costs of nurseries. Recent efforts by the Government of Jordan on the nurseries licensing bylaw and review of the regulatory institutional model, as well as providing cash support for nurseries in areas with low female labor force participation through the Social Security Corporation are welcome steps, but more needs to be done to increase awareness of benefits and availability. Greater provision of early childhood care and education service centers can also create job opportunities for other women in those facilities. Improving access to public transportation, including its reliability and safety and cost, is also critical.¹⁹ The operationalization of the Bus Rapid Transit (BRT) is a step in the right direction but does not sufficiently address the significant gap in the market.

• Improving the business and investment environment to stimulate jobs-rich growth in the private sector. The private sector in Jordan is currently small and unable to accommodate the needs of women. Enhancing the business and investment environment can bolster private sector growth and expand the opportunities available for women (away from limited positions in the public sector). Fostering growth in knowledge-intensive business and service sectors where flexible work arrangements and hours are feasible will also help increase participation and employment.

Table 1.

Jordan: Variables Included in the Indices

Sources: Women Business and the Law database, World Development Indicators, Barro-Lee educational attainment dataset, UNESCO Institute of Statistics, Fraser Institute, and IMF staff.

Table 1.

Jordan: Variables Included in the Indices

Variables	Definition
Structural
GDP per capita	Log of GDP per capita (constant 2010 US$)
Average schooling	Average years of schooling, female
Fertility rate	Total births per woman
Infrastructure
Access to electricity	Access to electricity, rural (% of rural population)
Access to drinking water	People using at least basic drinking water services, rural (% of rural population)
Access to sanitation	People using at least basic sanitation services, rural (% of rural population)
Access to childcare	School enrollment, preprimary (% gross)
Public Policy
Maternity benefits	1 if government administers 100% of maternity leave benefits, otherwise 0
Full pension retirement	1 if ages at which men and women can retire with full pension benefits are equal, otherwise 0
Partial pension retirement	1 if ages at which men and women can retire with partial pension benefits are equal, ptherwise 0
Retirement age	1 if mandatory retirement age for men and women are equal, otherwise 0
Childcare absence in pension	1 if periods of absence due to child care are accounted for in pension benefits, otherwise 0
Top marginal income tax rate	Countries with higher marginal tax rates that take effect at lower income thresholds receive lower ratings
Transfers and subsidies	Lower rating for countries with large transfers
Regulations
Choose where to live	1 if woman can choose where to live in the same way as a man, otherwise 0
Domestic violence legislation	1 if there is legislation specifically addressing domestic violence, otherwise 0
Signing contracts	1 if a woman can sign a contract same way as a man, otherwise 0
Registering businesses	1 if a woman can register a business same way as a man, otherwise 0
Access to credit	1 if law prohibits gender discrimination in access to credit, otherwise 0
Access to bank accounts	1 if a woman can open a bank account in same way as a man, otherwise 0
Spousal property rights	1 if men and married women have equal ownership rights to property, otherwise 0
Inheritance	1 if sons and daughters have equal rights to inherit assets from their parents, otherwise 0
Spousal inheritance	1 if surviving spouses have equal rights to inherit assets, otherwise 0
Spousal authority over assets	1 if the law grants spouses equal administrative authority over assets during marriage, otherwise 0
Valuation of nonmonetary contribution	1 if the law provides for the valuation of nonmonetary contributions, otherwise 0
Get a job same as man	1 if a woman can get a job in the same way as a man, otherwise 0
Gender discrimination in employment	1 if the law prohibits discrimination based on gender in employment, otherwise 0
Sexual harrassment legislation	1 if there is legislation on sexual harassment in employment, otherwise 0
Penalties for sexual harrassment	1 if there are criminal penalties or civil remedies for sexual harassment in employment, otherwise 0
Equal pay for equal work	1 if the law mandates equal remuneration for work of equal value, otherwise 0
Limits on night hours	1 if women can work the same night hours as men, otherwise 0
Limits on jobs deemed dangerous	1 if women can work in jobs deemed dangerous in the same way as men, otherwise 0
Limits on industries	1 if women are able to work in the same industries as men, otherwise 0
Paternal leave	1 if there is paid parental leave, otherwise 0
Dismissal of pregnant workers	1 if dismissal of pregnant workers prohibited, otherwise 0

Sources: Women Business and the Law database, World Development Indicators, Barro-Lee educational attainment dataset, UNESCO Institute of Statistics, Fraser Institute, and IMF staff.

View Table

Table 1.

Jordan: Variables Included in the Indices

Variables	Definition
Structural
GDP per capita	Log of GDP per capita (constant 2010 US$)
Average schooling	Average years of schooling, female
Fertility rate	Total births per woman
Infrastructure
Access to electricity	Access to electricity, rural (% of rural population)
Access to drinking water	People using at least basic drinking water services, rural (% of rural population)
Access to sanitation	People using at least basic sanitation services, rural (% of rural population)
Access to childcare	School enrollment, preprimary (% gross)
Public Policy
Maternity benefits	1 if government administers 100% of maternity leave benefits, otherwise 0
Full pension retirement	1 if ages at which men and women can retire with full pension benefits are equal, otherwise 0
Partial pension retirement	1 if ages at which men and women can retire with partial pension benefits are equal, ptherwise 0
Retirement age	1 if mandatory retirement age for men and women are equal, otherwise 0
Childcare absence in pension	1 if periods of absence due to child care are accounted for in pension benefits, otherwise 0
Top marginal income tax rate	Countries with higher marginal tax rates that take effect at lower income thresholds receive lower ratings
Transfers and subsidies	Lower rating for countries with large transfers
Regulations
Choose where to live	1 if woman can choose where to live in the same way as a man, otherwise 0
Domestic violence legislation	1 if there is legislation specifically addressing domestic violence, otherwise 0
Signing contracts	1 if a woman can sign a contract same way as a man, otherwise 0
Registering businesses	1 if a woman can register a business same way as a man, otherwise 0
Access to credit	1 if law prohibits gender discrimination in access to credit, otherwise 0
Access to bank accounts	1 if a woman can open a bank account in same way as a man, otherwise 0
Spousal property rights	1 if men and married women have equal ownership rights to property, otherwise 0
Inheritance	1 if sons and daughters have equal rights to inherit assets from their parents, otherwise 0
Spousal inheritance	1 if surviving spouses have equal rights to inherit assets, otherwise 0
Spousal authority over assets	1 if the law grants spouses equal administrative authority over assets during marriage, otherwise 0
Valuation of nonmonetary contribution	1 if the law provides for the valuation of nonmonetary contributions, otherwise 0
Get a job same as man	1 if a woman can get a job in the same way as a man, otherwise 0
Gender discrimination in employment	1 if the law prohibits discrimination based on gender in employment, otherwise 0
Sexual harrassment legislation	1 if there is legislation on sexual harassment in employment, otherwise 0
Penalties for sexual harrassment	1 if there are criminal penalties or civil remedies for sexual harassment in employment, otherwise 0
Equal pay for equal work	1 if the law mandates equal remuneration for work of equal value, otherwise 0
Limits on night hours	1 if women can work the same night hours as men, otherwise 0
Limits on jobs deemed dangerous	1 if women can work in jobs deemed dangerous in the same way as men, otherwise 0
Limits on industries	1 if women are able to work in the same industries as men, otherwise 0
Paternal leave	1 if there is paid parental leave, otherwise 0
Dismissal of pregnant workers	1 if dismissal of pregnant workers prohibited, otherwise 0

Sources: Women Business and the Law database, World Development Indicators, Barro-Lee educational attainment dataset, UNESCO Institute of Statistics, Fraser Institute, and IMF staff.