20220717-IMF-Jordan_Selected_Issues_29页_2mb

Summary of Selected Issues on Jordan

Core Content

This document analyzes key issues related to female employment opportunities, tourism's role in economic growth, and economic growth trends in Jordan, based on data and research up to June 2022. It also outlines policy recommendations aimed at improving female labor market participation and discusses the implications of tourism on the broader economy.

Main Obstacles to Female Employment in Jordan

A. Background

• Jordan has made significant progress in closing gender gaps in education and health.

  • Female literacy rate is nearly 98%, among the highest in the Middle East and North Africa (MENA) region.
  • Female enrollment in primary and secondary education has been nearly equal to males for over a decade.
  • Tertiary education enrollment shows a female majority (36% vs. 30% for males in 2019).
  • Fertility rates have declined from 4.1 in 2000 to 2.7 in 2019.
  • Maternity deaths are relatively low (46 per 100,000 live births).

• Despite high education levels, female labor force participation (LFPR) remains low:

  • LFPR for women: ~14% (2009–2019) vs. 62% for men.
  • Female unemployment rate: ~23% vs. 12% for males.
  • Jordan's LFPR is lower than similar-income countries (46% for middle-income countries) and within the MENAP region (20%).

• The COVID-19 pandemic worsened the situation:

  • Female unemployment reached 31% in 2021Q4.
  • Female LFPR dropped to 13.6% in 2021Q4.
  • Young females (15–24) had an unemployment rate of ~67% in 2021, with a LFPR of ~30%.
  • Female unemployment rose sharply during the early stages of the pandemic, while male unemployment only marginally increased.

B. Key Determinants of Gender Gap

• Structural and legal barriers are the main causes of the gender gap, not lack of access to education or health services.
• Studies indicate that legal rights and regulatory frameworks are the largest contributors to the gender gap in the MENA region.
• Pay disparity and limited leadership opportunities discourage women from participating in the labor market.
  • In 2020, the private sector wage gap was ~17%.
  • Female legislators, senior officials, and managers earned ~13% less than their male counterparts.
• Social norms and lack of affordable childcare further limit women's participation.
  • 96% of Jordanians agree that women should be allowed to work, but many feel constrained by norms.
  • Over 70% believe women should not work beyond 5 PM.
  • 44% think women may face harassment in the workplace or during commutes.
• Unreliable and unsafe public transport is a major barrier, with 47% of women turning down job opportunities due to it.
  • On average, working women spend 48 minutes commuting and ~JD 57 monthly on transport.
  • Public transport issues disproportionately affect women.

C. Methodology and Findings

• A regression analysis was conducted using a maximum likelihood estimator to assess the impact of structural, legal, and policy factors on the gender gap.
• The study compares Jordan's results with those of the MENA region.
• Key findings:
  • Structural variables and regulations are the main drivers of the gender gap.
  • Infrastructure has a weaker effect in Jordan compared to the regional average.
  • Public policies have a relatively small impact.
  • Regulatory reforms are the most significant contributors to the gender gap, with a strong positive coefficient in both Jordan and the MENA region.

D. Policy Recommendations

• Improve the regulatory framework:
  • Amend Labor Law to protect women from harassment and remove gender bias.
  • Ensure equal access to maternity and paternity leave.
  • Enforce anti-discrimination laws and promote dual-income households.
• Enhance infrastructure:
  • Improve access to childcare facilities and affordable public transport.
  • Increase awareness of available benefits and services.
  • Expand early childhood care and education centers to create more job opportunities.
• Stimulate the private sector:
  • Improve the business and investment environment to promote job creation.
  • Encourage growth in knowledge-intensive sectors that offer flexible work arrangements.
• Address legal and financial barriers:
  • Ensure equal pay for equal work.
  • Improve access to credit and bank accounts for women.
  • Strengthen spousal property rights and inheritance rights for women.

Tourism in Jordan: An Engine of Growth?

Key Findings

• Tourism is Jordan's largest service export, representing ~33% of total exports before the pandemic.
• Tourism receipts have grown from ~4% of GDP in the early 2000s to ~10% in 2019, surpassing remittances.
• Tourism has been a growth driver despite weaker GDP growth post-2010, due to increased international demand and low-cost European airlines.

Economic Impact

• A 1% decline in tourism receipts leads to:
  • A 2.5% cumulative GDP decline over three years.
  • A 1.7 percentage point increase in unemployment.
  • A 1.2% inflation drop over two years, which is temporary.
• Tourism acts as a demand shock, reducing economic activity and increasing unemployment.

Sectoral Spillovers

• Tourism has positive complementarities with other sectors:
  • Finance, manufacturing, construction, and retail benefit from tourism growth.
  • Tourism supports local services production, improves access to business services, and reduces credit constraints.
• No evidence of Dutch disease effects is found, as tourism does not negatively impact real effective exchange rate (REER) or tradable goods sectors.

Economic Growth in Jordan: Retrospect and Prospect

A. Growth Since 2000

• Jordan has experienced moderate GDP growth over the past two decades.
• Growth has been driven by services and construction.
• Private sector growth has been limited, contributing to low job creation.

B. GDP Decomposition

• Industry composition:
  • Services and construction have been the main contributors to GDP growth.
• Expenditure composition:
  • Consumer spending and government consumption are key drivers.
• Export composition:
  • Tourism is a major export, with significant contributions from non-tradable goods and services.

C. Productivity and Competitiveness

• Labor productivity in Jordan is relatively low compared to other countries.
• Productivity gaps between men and women persist.
• Business environment indicators show that Jordan has room for improvement in regulatory efficiency and market access.

D. Post-COVID Growth

• The post-pandemic recovery is expected to be slow and uneven.
• Structural reforms and improving the business environment are critical to catalyzing growth.
• Female employment is a key factor in sustainable and inclusive growth.

Jordan's Economic Modernization Vision

• Jordan aims to modernize its economy through structural reforms and improving the business environment.
• This includes increasing female participation, enhancing productivity, and stimulating private sector growth.
• The strategy also focuses on tourism expansion, capacity building, and marketing efforts.

Key Tables and Figures

Table 1: Variables Included in the Indices

Figure 1: Labor Market Trends in Jordan

• Shows unemployment and labor force participation rates for men and women over time.
• Highlights the impact of the pandemic on female employment.

References

• International Monetary Fund (IMF) staff calculations.
• World Bank, Jordan Strategy Forum, ILO, UNWTO, and other international organizations.