Diana Thorburn | The Tantalising 211,000

Amid Jamaica’s record-low unemployment and a tightening labour market, the 411,000 working-age individuals currently classified as “outside the labour force” seem to represent a source of untapped productive potential.

CAPRI’s latest report, Outside In, examines the 35 per cent of the working-age population, aged 18 to 70, who are neither employed nor seeking work, exploring the factors that contribute to their disengagement from the labour market. While the temptation exists to view this large group of non-participants as a potential labour pool ready to be mobilised, the reality is not so straightforward.

The findings revealed some unexpected insights. While global labour force participation rates (LFPR) have been declining over the past two decades, Jamaica’s LFPR has risen from 62 to 65 per cent over the last 12 years. Despite the global push to increase labour force participation — an almost universal policy objective — the study found that effective interventions are limited. High-income countries have achieved some success by raising the retirement age and offering incentives for older workers to stay employed. Perhaps more applicable to Jamaica is the demonstrably effective policy of state-subsidised support for individuals with unpaid care responsibilities, which often acts as a barrier to joining the workforce.

CURRENTLY IN SCHOOL

Outside In found that nearly a quarter of the working-age population is currently in school while seven per cent are unable to work due to illness or disability. An additional six per cent are retired, and another six per cent already plan to seek employment in the near future. We also identified approximately 15,000 individuals who are not working or actively seeking work due to caregiving responsibilities. The majority of these caregivers (96 per cent) are women, who also have a lower labour force participation rate than men.

This group represents a viable opportunity for labour force expansion provided that their caregiving obligations can be adequately supported. Investing in solutions, such as vouchers for regulated care facilities, could yield returns. We estimate that this could potentially boost GDP by as much as two per cent, which will outweigh the fiscal cost. Moreover, such a policy could create additional benefits, including new formal-sector jobs and entrepreneurial opportunities through the formalisation of currently informal caregiving services.

At the report launch, however, attendees appeared troubled as to why a remaining 211,000 individuals explicitly indicated no interest in working. We wanted to learn more about this group and how they might be coaxed into the labour force, but STATIN’s dataset did not delve beyond the initial response of “don’t want to work” though the demographic data does tell us that most of these individuals are male.

Researching this group poses significant methodological challenges and costs. This population is difficult to reach, and obtaining reliable answers would necessitate a sample size large enough to ensure data validity. Such a study is not impossible, but it would be costly and logistically challenging.

FURTHER INSIGHTS

Rather than investing in a survey study of a group with little chance of responsive engagement, it may be worthwhile to glean further insights from countries similar to Jamaica that have improved their workforce participation rates.

Consider the ‘entitled to work’ hypothesis: people who live in informal communities — about 600,000 individuals in Jamaica, or over 20 per cent of the population — face a structural barrier to labour force participation simply because they cannot venture far from home to secure a job, formal or informal. Without legal tenure to their residences, these households do not benefit from the state protection of their landholdings and are at risk of being forced out if adults in the household are not physically present. We can see this phenomenon manifest itself in the proliferation of small shops attached to houses in informal communities and the conduct of entrepreneurial activities such as hairdressing occurring inside homes.

In our report Groundwork for Peace, we presented the experience of Peru and its national land titling campaign during the 1990s. An unexpected outcome of that policy was improved productivity and increased labour market participation, mostly among men. Research indicated a causal relationship between land titling and participation in the formal labour market, with a shift from home-based work to external employment and a substitution of adult for child labour. One study calculated that for every four titles issued, there was one additional member of the labour force. Doing a rough calculation, if Jamaica were to issue, say, half of the titles pertaining to the 350,000 unregistered parcels of land across the island, and the same equation were to apply, we could see an additional 43,750 persons entering the labour force — around 10 per cent of the current number outside the labour force.

Evidence-informed applied public policy research identifies the most effective levers for change based on reliable data and realistic assessments of costs and benefits. The idea of mobilising the 211,000 disengaged individuals is alluring, but the work we have done thus far suggests that if further research is to be conducted, it would be better directed at exploring how to effect mass land titling that has proven elsewhere to invigorate engagement in the labour force as well as reduce poverty, mitigate violence, and improve economic growth.

Diana Thorburn is the director of research at CAPRI. Send feedback to columns@gleanerjm.com and communications@capricaribbean.org.