Improving Labour Market Outcomes in the Pacific: Policy Challenges and Priorities

Abstract

Labour markets in the Pacific Island countries are characterized by underemployment, high levels of informality, gender disparities in employment outcomes, and a large and growing share of young people not in education, employment or training. Size and remoteness have hindered economic growth and limited positive labour market outcomes. A very young and growing population is both an opportunity and a concern: Pacific Island countries stand to benefit from a demographic dividend, but labour markets are simply not producing enough jobs to accommodate all the young women and men entering the workforce each year. Given the labour market challenges in the Pacific Islands, many workers have looked elsewhere for new opportunities. Emigration rates for skilled Pacific Islanders are among the world’s highest, leading to fears of a “brain drain” in many of the labour-sending countries. Meanwhile, many Pacific Islands are heavily reliant on foreign labour, driven in part by “skills shortages” at home. The challenge moving forward will be determining how to leverage the benefits of migration while mitigating its negative consequences. Looking ahead, the looming impacts of climate change and rapidly evolving technology also pose a major challenge to Pacific Island economies. This Report provides policy guidelines for improving labour market outcomes, focusing on five key areas: first, investing in underserved areas and tackling informality; second, strengthening labour market institutions to make growth more inclusive; third, adopting migration policy that works for all; fourth, addressing inequities between women and men while tackling youth unemployment; and lastly, preparing for the future of work in the Pacific, which will likely be shaped by climate change.