Labor Market Issues in the Caribbean: Scope to Mobilize Employment Growth

Abstract

The paper examines the determinants of employment growth, drawing on data available across a sample of Caribbean countries. To that end, the paper analyzes estimates of the employment-output elasticity and the response of employment growth to major sources of labor market determinants, in the long and short run. The main determinants of employment include government investment and private sector credit, while the major determinants of external performance are real effective exchange rate, the price of major exporting commodities, the number of tourists, and growth in major trading partners. The paper concludes with a menu of policy recommendations and structural reforms towards sustaining high employment growth and higher living standards in the Caribbean.

Keywords: Employment, Labor market characteristics, Gross domestic product, Business cycles, Economic reforms, Economic growth, Economic indicators, Unemployment, Job creation, Exports, Caribbean, labor market, macro policies, structural reforms, employment growth, unemployment rate, labor force, high unemployment, effect on employment, average employment, rising unemployment, private employment, unemployed, unemployment rates, public employment, youth unemployment, high unemployment rate, labor force growth, employment adjustment, formal employment, aggregate unemployment, employment relation, high employment, growth of employment, informal employment, public sector employment, high youth unemploymen

JEL Classification: E24, E32, J21, J23, J31, J38