To support this effort, the IMF has developed a template that allows country teams to analyze and project key labor market indicators within a user-friendly and flexible framework.
According to the International Labour Organization, total world unemployment is expected to reach 202 million in 2012, up from 196 million in 2011. This will be roughly equivalent to the combined population of the United Kingdom, Switzerland, Mexico, and Australia. Plus, youth unemployment is forecast to reach 75 million this year, almost equivalent to the population of Turkey.
One region where unemployment has been persistently high for over two decades is the Middle East and North Africa (MENA). Realizing the urgent need to gain deeper insights into regional labor market developments, and in particular, the need to incorporate them consistently into economic surveillance, a staff team from the Middle East and Central Asia Department at the IMF has developed a template for analyzing the employment-growth nexus.
What does it do? The template, which is flexible enough to be customized to data and relevant macro-assumptions of any country, provides the researcher with a practical and transparent tool to derive the impact of various growth scenarios on employment/unemployment, as well as conduct other what-if analyses involving forecasts of labor market variables within the macroeconomic framework.
IMF Deputy Managing Director Min Zhu (l) with Research Department Advisor Prakash Loungani at launch of labor market template (IMF photo)
How is it done? The template draws on econometric analysis of the relationship between unemployment and growth to produce estimates of employment-growth elasticities. Estimation...