Structure of labour market and unemployment in Sudan

This paper examines the structure of the labour market and unemployment in Sudan. One advantage of our analysis is that we explain several stylized facts on the labour market using new secondary data on population, employment and unemployment based on Sudan Central Bureau of Statistics (2010) the Fifth Sudan Population and Housing Census (2008). We explain several stylized facts on the relation between the structure of the labour market and demographic structure, labour force, participation rates, economic activities, low skill level and high unemployment rate defined by gender and mode of living in Sudan. Different from the findings in the empirical literature in support of the Phillips curve on the negative correlation between inflation and unemployment rates, we find a positive and significant correlation between unemployment and inflation rates in Sudan during the period 2000-2008. Moreover, different from the analysis in Sudanese literature, we present a more comprehensive analysis of four stylized facts on the unemployment problem in Sudan, including identifying several types of unemployment; interpretation of unemployment problems from due to endogenous and exogenous causes; analysis of the high incidence of unemployment among youth population and a high mismatch between educational qualifications (supply) and labour market requirements (demand). The major policy implication from our findings is that the unemployment problem is related to endogenous and exogenous causes; therefore policy interventions for reducing unemployment should deal with these endogenous and exogenous causes. Notably, improvement of job creation and quality of educational policies and consistency between educational qualifications (output) and labour market requirements. Another major policy implication from our results on the significant positive correlation between increase in unemployment and inflation rates (2000-2008), implies that macroeconomic policies aimed at or targeting reducing inflation rates would also help to reduce unemployment rates in Sudan.

Keywords: Labour market, employment, unemployment, Sudan.

JEL classification: E24, J10, J11, J20, J21, J23, J24, J64