Labour Force and Employment in Iraq

The total labour force of Iraq is estimated to be around 9 million workers¹. In terms of employment, two-thirds of all workers in Iraq are employed in the informal sector and the private sector employment dominates in construction, commerce, and transport². Although there are no accurate indicators of the size and composition of the informal economy, it was estimated in 2012 that the workers in the informal economy were to be around 66.9% of all workers³. The official figures for unemployment are 13.8 per cent for 2018. This percentage has likely increased in the recent period⁴.  

Iraq’s private sector provides jobs for more than 53 per cent of the country’s labour force, that is, about 5.4 million workers⁵. In recent years, it showed inefficiency to absorb the increasing number of youths entering the labour market and unemployed people. At the same time, the public sector tends to employ few young people. The Iraqi economic structure is undermining the private sector’s role in being the real engine for employment, as around 40% of all jobs are in the public sector, while the private sector accounts for roughly 50% of employment.

Women and youth face structural challenges that hinder their access to the labour market and sustainable employment. In addition to the security challenges, they suffer from a lack of access to finance to establish businesses accompanied by limited opportunities for technical and employability skills development. On the other hand, employers in the private sector are not able to create employment opportunities. There is a dearth of sufficient basic services that make entry and exit barriers for running profitable businesses, such as infrastructure, reliable water supply, and electricity.

Women continue to experience inequality in access to employment (38.6% were unemployed within the age group 15 – 24⁶ as compared to the national unemployment average of 13.8%). Iraq has an incredibly low female labour force participation rate of around 15%⁷. Women in the private sector earn less than men with similar education, skills, and experience levels. 

The youth between (15-24) years also continue to face a high unemployment rate of 27.5 percent⁸ that is twice the national unemployment rate of 13.8%, even before the recent financial and COVID-19 crises. Their call for jobs and equal opportunities would be hard to meet, as the already strained public resources and services struggle to respond to ongoing crises. Lack of socio-economic opportunities or political representation, and a sense of injustice, provide fertile ground for the disaffected youth to be prone to radicalization and violent extremism.

References:

¹European Asylum Support Office, Country of Origin Information Report Iraq: Key Socio-Economic Indicators, 2019. 
²Feasibility Study on Setting up a Credit Guarantee Scheme in Iraq, UNDP, 2020.
³Assessment of the Labour Market and Skills Analysis Iraq and Kurdistan Region Iraq, 2019, UNESCO
⁴White Paper on Financial Reform, 2020
⁵the number of private workers insured by Iraq’s Ministry of Labour and Social Affairs is taken from the ministry’s website: https://bit.ly/2C9H4vT. 
⁶General Statistics Organization,2016 (http://www.cosit.gov.iq/ar/2013-01-31-08-48-55) 
⁷World Bank, Iraq Economic Monitor, From War to Reconstruction and Economic Recovery, 2018.
⁸White Paper on Financial Reform, 2020