BA1193A Macroeconomics: Analysis of Unemployment in Jordan (Oct 2021)

This report, prepared for a Macroeconomics course (ECO211) at the Faculty of Business and Management, analyzes the unemployment crisis in Jordan. It examines the country's high unemployment rates from 2017 to 2020, attributing them to factors such as population growth, lack of skills matching job market needs, and the COVID-19 pandemic. The analysis highlights the impact of unemployment on both males and females, with a focus on the educational background of the unemployed. The report also discusses potential solutions including monetary and fiscal policies, and the need for training programs and curriculum reforms. The report highlights the need for internship programs, skill-based education and also addresses the challenges faced by female workers in Jordan and suggests policy changes to address gender discrimination. The report concludes by emphasizing the urgency of addressing unemployment for economic and social stability, as well as providing key recommendations for addressing the problem.

FACULTY OF BUSINESS AND MANAGEMENT
BA1193A
MACROECONOMICS
ECO211
WRITTEN REPORT
PREPARED FOR:
DR. ASMA’ RASHIDAH IDRIS
NAME ID MATRICS
NUR ATYRA BINTI ZULKIFLI 2020895174
NORAINA NABILAH BINTI SHAHABUDIN 2020809074
NUR AIN NASUHA BINTI AZMI 2020464186
INTAN SOFEA BINTI AZIZ 2020883274
AINOL AFIQAH BINTI ANI 2020452036
SEMESTER : OCT 2021 - FEB 2022

TABLE OF CONTENT
1.0 INTRODUCTION……………………………………………………………………..….....……1
2.0 ANALYSIS……………………………………………………………….………………...…2 - 4
 UNEMPLOYMENT IN JORDAN……………………………………..............…….…2 - 4
3.0 DISCUSSION…………………………………………………………………..…………….5 - 6
 MEASURES TO OVERCOME THE UNEMPLOYMENT IN JORDAN…………....5 - 6
4.0 CONCLUSION…………………………………………………………………….……….…….7
REFERENCES……………………………………………………………………………….…...….8

1.0 INTRODUCTION
Jordan has made great progress in human development and being a middle-income
country with limited natural resources, relies heavily on human capital for growth and the
country has reduced illiteracy significantly in compared to most other Middle Eastern and
North African countries. In terms of macroeconomic stability, trade access and regulatory
climate, the economy has established itself throughout the decades as one of the finest
business environments in the area.
Jordan is a small country in western Asia with a large population which has been
recorded about 9.702 million in 2019. Jordan faces a range of economic issues that include
high levels of poverty, unemployment, hyperinflation, a massive budget shortfall and a
government debt that is almost 90% of Gross Domestic Profit(GDP). Jordan's gross
domestic product (GDP) has been boosted by as much as 25% due to remittances from
Jordanians working abroad. However, with the labour force increasing at 4% per year and
poverty and unemployment at 11.6% and 15% respectively, it is critical to create extra new
jobs for young people in the interests of not just economic growth but also social stability.
2017 2018 2019 2020
9,500,000
9,600,000
9,700,000
9,800,000
9,900,000
10,000,000
10,100,000
10,200,000
10,300,000
9,785,843
9,965,318
10,101,694
10,203,134
THE TOTAL POPULATION OF JORDAN FROM 2017 UNTIL 2020
Population
Based on the graph above, the total population of Jordan increased every year
starting in 2017 which had a total of 9,785,843 million people and increased by 1.82% in
2018. However, in 2019 and 2020, the population in Jordan became slowdown and only
increased by 1.36% & 1% of the population, respectively. High population growth is one of
the reasons why a country has a very high unemployment rate. This is due to the large
number of people in the country not having the opportunity to work and the jobs offered to
them are very low also it can cause an economic growth become slowdown.
1

2.0 ANALYSIS
Unemployment, often known as joblessness, arises when persons of working age are
capable and eager to work yet unable to discover an appropriate job. Jordan's
unemployment rate is described as the amount of unemployment people as a percentage of
the workforce. People in the labour market are either employed or jobless which means they
do not have a job but are constantly seeking for one that suitable for them. In constant,
people who are not out for work, the pensioned and children are all part of the labour force.
In developing economies, unemployment is a major concern. The high
unemployment rate indicates that a country is not achieving the fullest use of its labour force
resources. Unemployment in every country does more than only cause social difficulties, but
it also causes an economic downturn and is the most serious economic challenge because it
give a big impact on individuals and communities, as well as the rate at which it is growing
over the world as it crime in many nations.
2017 2018 2019 2020
14.00%
14.50%
15.00%
15.50%
16.00%
16.50%
17.00%
17.50%
18.00%
18.50%
19.00%
15.78%
16.29%
16.85%
18.50%
UNEMPLOYMENT RATE IN JORDAN FROM 2017 TO 2020
These data indicate the high rate of unemployment in Jordan from 2017 to 2020. it
shows that Jordan unemployment rate for 2017 was 15.78%. Next, unemployment rate for
2018 was 16.29% which increase 0.51% from 2017 while for 2019 was 16.85%. It was rises
about 0.56% from 2018. Lastly, for 2020 was 18.50% that increase in about 1.65% from
previous year. Thus, we can see that Jordan's unemployment rate hit an all-time high in
2020 which close to 19%. It caused an economic downturn due to a covid - 19 and fall in
2

demand for goods and services as it resulted in a decrease in the output rate. So, we can
see that unemployment rate increased while compared to the previous year.
Jordan has a major unemployment crisis with 35% of males and 40% of females
jobless between the ages of 15 and 24. Jordan, as we all know, has a larger population and
is amongst the most educated countries especially among university graduates.
Nevertheless, there are several other causes of unemployment. The first and most essential
problem is that young Jordanians have been studied in a field which does not match the
sector need for workforce, indicate that the labour supply may not adapt to the workforce
industry. Thus, there is a high proportion of migrant labour working for low wages which
contributes to higher unemployed among local workers. Third, the weakness of the public
sector and a lack of public investment are factors that contribute to Jordan's high
unemployment rate.
2017
2018
2019
0 5 10 15 20 25 30
24.06
23.9
23.81
13.97
14.61
15.29
THE UNEMPLOYMENT RATE BETWEEN MALE AND FEMALE FROM
2017 UNTIL 2019
MALE FEMALE
The graph shows that female gender has a greater unemployment rate than the male
gender most annually and almost everywhere in the country, we can see that male workers
are preferred in some market force. It is because of their work is too “tough” for women.
Male workers are preferred since their work is better quality and can even be finished on
time. Generally, no component to diminish the status of the female gender, but there are
some aspects that must be focused to any companies such as options, respect, protection
and equality for women.
3

In the nutshell, not every women are capable of doing mining duties that need a large
workforce that might have an impact on the health for those working at the site. We are
aware that not all people want to take risks of a challenging work that might harm their health
unless they are engaged with it. In particular, every industry has developed significant steps
to deliver the project by recruiting more male employees than female workers. Aside from
that, present unemployment is also determined by the degree of education.
According to the study results, the unemployment rate has rises among university
graduates. It occurs because there are a major percentage of students who may not
master’s in communication skills, teamwork, multitasking and other soft skills. If students do
not practise the skills, companies will find it difficult to recruit new staff because each skill is
a key for handling any challenges that may happen during working. I understand that every
Jordanian is eager to work in order to survive and establish a good future.
Because of the world's crisis caused by Covid 19, most companies had very
extraordinary demands for fresh graduates such as having at least three years of work
experience. Although there are a lot of students graduating from university, but there was not
enough growth in the job market to absorb them all. Not only that, many employers have to
forego their employees in order to save their company from bankruptcy. As a result, the virus
of Covid - 19 reminded them of how fragile the career path is.
4

3.0 DISCUSSION
The solution to the unemployment issue has implications for monetary policy
implementation. Monetary policy is a policy that must be implemented because it is quick,
effective and strong in order to eliminate unemployment. As many people are aware, this
strategy is critical in times of economic hardship, like as during the Covid-19 epidemic. For
example, the government may attempt to promote the economy by lowering taxes or
increasing spending. There is also monetary policy that may be used, such as expansionary
policy. By lowering interest rates, expansionary monetary policy serves to boost aggregate
demand and economic growth. As a result, individuals will spend and invest more money
since it is simpler to bring money in. Low interest rates encourage consumers to acquire
more assets and enhance their own spending, as we all know. As a result, it will aid in the
reduction of cyclical unemployment.
In sequence, the government might utilize fiscal policy to lower the unemployment
rate caused by the Covid-19 outbreak. By raising government expenditure and cutting taxes,
it aids in the management of production and unemployment. As we all know, lower tax rates
may lead to more disposable income and more expenditure. It might happen if a company's
output increases, necessitating the hiring of additional employees. As a result, it would
contribute in the reduction of cyclical unemployment.
Other than that, direct control measures may be enforced if the government try to
provide training and technical education to the young people. Most of the unemployment
people in Jordan is people under 30 years old. They are lack in labor and technical skills
which makes it difficult for them to get a job. The government should provide them training
like internship for 3 months before they enter the real world of work. Jordan does not have
any internship program makes it as one of the challenges for a company to hire a new
graduate. Therefore, the Jordanian government should create internship programs for young
people because this helps them to adjust to a new job that has the same job skills. When
they have completed the internship program, they already have the skills and experience
that can be applied in the new workplace later.
Besides, many young people know that their educational preparation is unsuitable for
the demands of the job market. Youth are not free to seek market-valued professions;
instead, they are pressured to match to family or societal standards. Further education is
5

generally demanded, but youth suffer difficulties to obtaining this objective such as the
overwhelming importance of the secondary school final exam and the expensive cost of
higher education. Facing poor economic prospects and insufficient income, leaving many
Jordanians unable to pursue higher education. Therefore, many youths’ education is difficult
to get a job in the private sector labor market because they do not meet the skill
requirements. Thus, the middle and secondary school curriculum in Jordan should be
reoriented toward skills that will be in higher demand, particularly in the private sector such
as scientific and technical skills. In order to increase interest in private-sector careers, use
opportunities such as directing additional scholarships or financial aid to such fields of study.
Lastly, external factors such as family and cultural pressures and expectations, rather
than internalized desires for traditional professions or family responsibilities, limit female
youth's choices. They expressed that their desired to work and many planned to delay
marriage to follow their careers but because of the Jordanian traditional mindsets that
women will eventually quit the workforce to become housewives and moms, so they should
not be hired. Around 77 percent of woman has bachelor’s degree or higher, but they could
not get a job that they want because of the discrimination at the workplace and in
universities, women outnumber males and outperform them. Nonetheless, despite their
educational successes, women are far more likely than males to be unemployed or drop out
of the labor force.
Most of the companies in Jordan preferred men to work rather than women even
though those men did not have any education or knowledge in that field. Moreover, women
have a few options of workforce outside the government sector, but in the government
sector, they are limited to particular fields such as lecturing. Employers frequently ignore
legal obligations such as paid maternity leave and daycare which are sometimes used as
excuses for not hiring more women. Women are not free to choose the job they want like
men. They also do not have an access of transportation, so they had to use the public
transport to go to work. However, the public transport is not safe for them because they are
complaint of getting harassed and it’s not affordable. So, they had to keep away from the
work. Despite the many complaints made, the authorities still have not taken any action as
there is no law dealing with harassment in the workplace. So, what Jordanian government
should do is enforce new laws in the employment sector so that there is no more gender
discrimination. In addition, the government should also take any action to against any
individuals who harass women and also provide safe public transport so that women do not
feel threatened when going to work. When the government cares about the issues
6

happening in Jordan, the amount of unemployment happening in the country can be
reduced.
4.0 CONCLUSION
REFERENCES
1. Ahmed, A., Aziz, A., & Zaman, K. (2013). The long run effects between unemployment
and economic growth in selected SAARC countries. Economic Research Guardian,
Retrieved January 2, 2022, from
https://www.ecrg.ro/files/p2013.3(1)12y1.pdf
2. Al-Habees, M. A., & Rumman, M. A. (2012). The relationship between unemployment and
economic growth in Jordan and some Arab countries. World Applied Sciences Journal,
Retrieved January 2, 2022, from
http://ncys.ksu.edu.sa/sites/ncys.ksu.edu.sa/files/emp22_5.PDF
3. Al-Manaseer, D. S., & Al-Qudah, A. M. (2018).The impact of higher education output on
unemployment rates in Jordan. International Journal of Academic Research in Accounting,
Finance and Management Sciences, Retrieved January 2, 2022, from
https://m.merogostar.com/papers_submitted/4138/
The_Impact_of_Higher_Education_Output_on_Unemployment_Rates_in_Jordan.pdf
7

4. Amerah M, Khasawneh M (1993). Unemployment in Jordan: dimensions and prospects.
Centre for international studies, Retrieved January 2, 2022, from
https://library.fes.de/pdf-files/bueros/vifa-nahost/b93_00075.pdf
5. Group, world bank. (2021, June 15). Unemployment, total (% of total labor force)
(modeled ILO estimate) - Jordan. Data. Retrieved January 2, 2022, from
https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?
end=2020&locations=JO&start=2017
6. Hjazeen, H., Seraj, M., & amp; Ozdeser, H. (2021, December 26). The nexus between the
economic growth and unemployment in Jordan - Future Business Journal. SpringerLink.
Retrieved January 2, 2022, from
https://link.springer.com/article/10.1186/s43093-021-00088-3#Fig1
8