An Assessment of the Present and Future Labor Market in the Kurdistan Region — Iraq

Implications for Policies to Increase Private-Sector Employment

by Howard J. Shatz, Louay Constant, Jill E. Luoto, Alexandria Smith, Shmuel Abramzon

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Research Questions

  1. How can the Kurdistan Regional Government (KRG) improve the private-sector labor market in the Kurdistan Region — Iraq (KRI)?
  2. What inputs will be needed to improve KRG labor-market policy and the matches between job-seekers and employers?
  3. What skills do employers in the KRI desire in their employees?
  4. How will the KRI labor supply evolve through 2020?
  5. What sectors and industries will likely see strong employment growth in the KRI in the next 10 to 15 years?

The study addresses the question of how the Kurdistan Regional Government can improve the private-sector labor market in the Kurdistan Region–Iraq (KRI). Doing so will involve creating mechanisms by which job-seekers can develop the right skills and find employers who will hire them, employers can find the employees they need, and the government can create an enabling environment in which the best matches between job-seekers and employers can be made. The study estimates the likely number and education levels of new job-seekers through 2020. It conducts an original, scientific survey to learn about employer perceptions of skill gaps in the KRI. Then, it investigates sectoral employment growth in comparison economies to identify promising growth sectors. Finally, it outlines policy steps for the government to take to improve the functioning of the private-sector labor market.

Key Findings

Certain Policy Actions Will Improve the Labor Market

  • New labor-market entrants will have much higher levels of education than people currently employed in the Kurdistan Region — Iraq.
  • Employers value potential employees with customer-handling and communications skills, willingness to work hard, numeracy, English language skills, and practical technical experience.
  • Employers depend mostly on local informal networks and connections to recruit employees, although large companies are more likely to use recruiting agencies and newspaper advertisements as well as hire from abroad to meet their employment needs.
  • A modest share of employers provide training to their employees, and those that do provide training in practical, technical, and workplace skills including vocational or trade skills.
  • The services sectors of construction; transport, storage, and communications; and wholesale and retail trade are likely to have above-average employment growth. Agriculture and selected manufacturing industries also show promise.
  • Policymakers can take a number of steps to improve the labor market for the benefit of the private sector.

Recommendations

  • Policymakers, secondary and postsecondary education officials, and other stakeholders involved in the school-to-work transition should help guide students and job-seekers to develop skills that employers need, both technical and soft skills.
  • Officials of postsecondary education institutions should build links with the private sector through private-sector advisory boards.
  • Policymakers, postsecondary education officials, and prospective employers should work together to help students understand their future employment possibilities through career centers and job fairs.
  • University career centers should take the lead in improving student work experience through expanded and improved internships.
  • Regular, systematic data-collection activities should be conducted to gather information about labor-market needs.
  • Policymakers should make sure that education and training include skills applicable to a broad range of sectors.
  • Policymakers should continue reforms of government hiring to limit the expansion of the public sector and make private-sector jobs relatively more desirable.
  • Policymakers should consider forming a labor-market information system (LMIS) but proceed carefully only after considering costs and benefits.
  • Establishing an LMIS should proceed through a series of steps including assembling data on labor supply and demand, boosting information-sharing across government, and developing analytical capacity.
  • A longer-term goal for a proposed LMIS would be to augment the capability for job seekers to search for employment opportunities and employers to search for candidates, either through or in addition to existing institutions such as the new Kurdistan Works, employment agencies, and university career centers.

The research described in this report was sponsored by the Kurdistan Regional Government and was conducted in RAND Labor and Population, a unit of the RAND Corporation.

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