The Jobs Challenge in the South Caucasus

Unemployment remains a major challenge in Georgia, despite reform efforts and relatively strong economic growth over the past decade. At about 14.6% in 2013, the unemployment rate has dropped slightly in recent years but this has been due mostly to declining labor force participation.

Job opportunities for young people in Georgia are limited, with almost 53% of the current labor force employed in subsistence agriculture – a low-productivity, low-growth sector of the economy. Youth unemployment is especially high, having reached 29 percent in 2013.

The continuous decline in labor force participation is also of concern. In 2013, the labor force participation rate was 66.2 percent, with nearly 17,000 people of working age opting out of the labor force that year.

Evidence shows that the labor market plays an important role in Georgia in transmitting aggregate growth to people in the bottom 40 percent of the income-range. Assessments have found that poverty continues to be associated with the labor market status of the household head: among households where the head is unemployed, the poverty rate is 24 percent, compared with 14 percent among those who are employed

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Source & Copyright: World Bank