The Structure and Evolution of Employment in Jordan

In this paper we use a new and original data set, the Jordan Labor Market Panel Survey of 2010 (JLMPS 2010) to study changes in the structure and evolution of employment in Jordan over the past quarter century. Although, this is only the first wave of what is to be a longitudinal survey, it is possible to ascertain dynamic trends through detailed retrospective questions that allow us to reconstruct the employment trajectories of individuals who have ever been employed. Because this data can portray flows into the labor market and then follow the new entrants several years into their careers, they are able to highlight changes in trends much more precisely than regular quarterly labor force survey data that simply look at stocks of workers in different segments of the labor market at different points in time. The data also offer additional important advantages over the regular quarterly surveys in their ability to identify informal employment in its various guises, including wage and salary employment without contracts or social insurance and self-employment and unpaid family employment. Some of the main findings of the JLMPS 2010 is that the private sector is increasingly taking over from the public sector as the main engine of employment growth in Jordan but that formal employment, while growing rapidly, is becoming more precarious over time as employers attempt to gain flexibility by providing workers with social insurance but either temporary contracts or no contracts. Besides the initial bout of informality that new entrants to the formal sector experience, there seems to be a sharp divide between informal and formal employment, with few workers being able to cross from one to the other. Informal wage workers may become self-employed or even employers, but are much less likely to move into formal jobs. While hiring in the government sector appears to have slowed significantly since the 1970s, there appears to be a recovery in public sector employment in recent years with many workers moving into public sector employment after an initial spell in formal private sector employment. This is a major change from the past when most educated workers got government jobs as a first job. Self-employment is a relatively low but stable part of employment in Jordan. Workers seem to get such employment after spending some time as either informal wage workers or unpaid family workers.