1. INDICATORS FOR MONITORING EMPLOYMENT POLICIES Skill training workshop to diagnose the extent of social protection and promoting employment Phnom Penh Hotel, 02-04 Nov. 2011 By Makiko Matsumoto, Employment Policy Department, ILO Geneva.

2. Outline  MDGs and employment indicators  Existing employment-related indicators (subset of decent work indicators)  ‘Targeting’ vs ‘monitoring’: some difficulties employment indicators as ‘targets’  Data sources and monitoring frequency  Some issues around definition + calculation  Monitored under what policy framework? (NSDP, NES, etc.)  Ideally, ‘key’ target indicators need to be monitored witin the national development framework.  Greater number of indicators can be monitored by NES.

3. MDGs and Employment Indicators  Goal 1, target 1b:  Achieve full and productive employment and decent work for all, including women and young people.  4 Employment Indicators: Employment-to-population ratio (%) Share of vulnerable employment in total employment (%) Working poverty rate (%) Growth in output per worker (%)  Goal 3, target 3a:  Promote gender equality and empower women Share of women in wage employment in the non-agricultural sector (%)

4. Employment Indicator 1  Employment-to-population ratio (EPR):  This ratio is very difficult to target.  If EPR = 100, then it means everybody in the working age population (15+) is working. It is a good thing if everybody earns more than what they need for the household to survive and survive well (i.e. all households are not poor, at least by the food poverty line). It may not be such a good thing if everybody is working for survival, but still earns too little to take him/her and his/her family out of poverty. Usually, EPR captures an average situation of the two elements mentioned above.  Monitoring this ratio over time can give insights to the labour market, particularly for youth (vis-à-vis education) and women (vis-à-vis work at home).

5. Employment indicator 1

6. Employment Indicator 2  Proportion of own-account and contributing family workers in total employment  The ratio is targetable, but prior assessment and research to carefully assess the existing situation would be needed.  This is not an all-encompassing indicator, because there are wage workers who are also ‘vulnerable’ – casual labourers, wage workers earning very low level of wages.  At the same time, the indicator may also include those who are not necessarily ‘vulnerable’ – own-account workers in professional occupation.

7. Employment Indicator 2  Proportion of own-account and contributing family workers in total employment

8. Employment Indicator 3  Working poverty rate (%): proportion of employed who is a member of poor household (nationally defined poverty line) in total employment  This indicator may be targetable; but depending on how it is calculated, the value added to monitoring poverty rate may not be so clear.  If the indicator is generated from the household level data, to fully understand the underlying changes in the indicator, households need to be followed over time. This (panel data) is very costly.  But monitoring this indicator over time may still be informative to NES and economic policymaking.

9. Employment Indicator 3 Working poverty ($1.25 a day) by education (ILO estimates) Working poverty ($1.25 a day) by status (ILO estimates)

10. Employment indicator 4  Growth in output per worker (%)  May be targetable, but in terms of target, it may be clearer to target its disaggregated parts.  For example, rather than “The average annual target growth rate of output per worker between 2011 and 2015 that Cambodia tries to achieve is X%”, it may be clearer to think “The average annual target growth rate of output per worker in agriculture is X%”, or even clearer: “The average annual target growth rate of output in agriculture is X% and employment growth in agriculture is Y%”.  However, ensuring overall consistency of the targets may become rather difficult with too much disaggregation, and would require a lot of analysis.

11. Employment indicator 4  Average annual growth rates of real value added per worker (%), 1994-2008 1994-19971998-20042005-2008Period avg 1994-2008 Total1.81.66.92.9 Agriculture-2.2-0.93.90.6 Manufacturing16.1-8.011.32.8 Mining0.06.510.57.2 Others8.9-3.45.20.9

12. Employment Indicator 5  The share of women in total non-agricultural wage employment  May be targetable, but the initial analysis has to be very clear on what these non-agricultural wage employment are in relation to other employment opportunities.  Not all non-agricultural wage employment are ‘decent’ employment, with respect to wages, conditions of work, and respect of workers’ rights.

13. Many other important indicators  Other Decent Work Indicators (DWIs) may be considered for monitoring. For example,  Time-related underemployment rate In the case of Cambodia, using CSES data, it is possible to also examine average difference between hours workers wish to work and actual hours worked last week.  Share of wage employment in non-agricultural employment  Low pay rate (% of workers earning less than 2/3 of median wage or wage income)  Average earnings (monthly/hourly) by occupation  Earnings inequality (e.g. Gini, Theil, p90/p10)  To integrate social protection and employment, some social protection indicators, such as public social security expenditure as % of GDP or share of population aged 65+ benefiting from pension should be monitored.

14. Targets, monitoring and analysis  All policy targets should be monitored: this affects the choice of targets in the first place.  To understand the labour market and its dynamics, monitoring indicators that are not ‘targets’ can still be very informative.  But such monitoring needs to involve some analysis on why some indicators go up and down and for whom.  The simplest way is to cross-relate (correlate) the changes across certain indicators. For example, hours of work and wage income.

15. Employment Indicators: Some resources  Guide to the new MDGs: Employment indicators  http://www.ilo.org/wcmsp5/groups/public/--- ed_emp/documents/publication/wcms_110511.pdf http://www.ilo.org/wcmsp5/groups/public/--- ed_emp/documents/publication/wcms_110511.pdf  Towards decent work in sub-Saharan Africa: Monitoring MDG employment indicators  http://www.ilo.org/wcmsp5/groups/public/---dgreports/-- -dcomm/---publ/documents/publication/wcms_157989.pdf http://www.ilo.org/wcmsp5/groups/public/---dgreports/-- -dcomm/---publ/documents/publication/wcms_157989.pdf  Decent Work Indicaors for Asia and the Pacific: A guidebook for policy-makers and researchers  http://www.ilo.org/wcmsp5/groups/public/---asia/---ro- bangkok/documents/publication/wcms_099163.pdf http://www.ilo.org/wcmsp5/groups/public/---asia/---ro- bangkok/documents/publication/wcms_099163.pdf

16. Data sources  The main source: labour force surveys (LFS)  It allows for direct calculation of almost all the indicators mentioned above (and disaggregated by sex, regions, education, sectors, household characteristics, etc.), except for working poverty rate.  Alternative source, mainly for working poverty, but also potentially usable for other employment indicators: CSES  Poverty is a household concept.  An employed person who is a member of poor household is classified as working poor.  Integrated household surveys  Establishment surveys  Sometimes used e.g. for wage bills, estimation of informal economy  Population censuses: for the key employment indicators, and particularly for migration

17. Choice of data sources  What is available, how often.  Mixing different sources to understand the movements in the labour market may become a source of confusion.  Ideally, LFS should be the main source.  It is tailored to the LM, and collects information, not only to calculate the indicators, but to analyze and give guidance on LM policies for the specifics of the LM (e.g. job search behaviour and duration, distance/time from home to workplaces, etc.).

18. Monitoring: Linking outcomes and policies  What should be monitored by who?  What would be considered “important” targets should be monitored under the macro level monitoring system (CMDGs, NSDP).  Greater LM details that add further guidance to the NES in Cambodia should be monitored under NES.  From the point of view of NES and labour market policies (LMPs) therein, it would be useful to have the labour market policies/institutions-related information that can (indirectly) assess/evaluate these LMPs and institutions in the medium- to long-run.  For example: information on  whether the individuals found jobs through employment services  whether households sampled in the LFS is a recipient of conditional cash transfer or other social protection measures; or  whether workers participate in the social security schemes.

19. Thank you! Makiko Matsumoto, Research Economist, Employment Policy Department, ILO Geneva, masumoto@ilo.org