Unemployment in Jordan: Causes and Possible Solutions

Batool Alshraiedeh

Master's thesis

Abstract:

This diploma thesis examines the unemployment situation in Jordan, delving into its root causes, demographic disparities, and the impact of both public and private sectors on employment rates. Central to this exploration is the construction and analysis of an econometric model aimed at identifying the primary determinants affecting Jordan's unemployment rates, focusing on variables such as real GDP growth, government education expenditure, new business registrations, refugee populations, and significant socio-political events. The findings reveal that new business registrations, the refugee population, and significant events significantly impact unemployment rates, underlining the importance of entrepreneurship and the complex challenges posed by socio-political dynamics and the refugee influx. Contrarily, real GDP growth and government education expenditure are not significant determinants, suggesting that economic growth alone does not guarantee employment creation, and that there is a mismatch between the education system's output and the labour market's needs. Predictions for 2023–2030 suggest a gradual decrease in unemployment rates, reflecting the potential effectiveness of economic recovery measures and job creation policies, yet underscoring the need for comprehensive and sustained policy-making to tackle the multifaceted nature of unemployment in Jordan. To combat these issues, the thesis proposes several practical recommendations, including fostering investments in labour-intensive sectors, reforming education and vocational training systems, supporting entrepreneurship, and enhancing public-private sector collaboration. These strategies aim for a multifaceted approach to reducing unemployment, enhancing economic growth, and ensuring a resilient labour market capable of absorbing the country's young and rapidly growing population. The thesis can serve policymakers in Jordan and other similar economies to devise effective strategies addressing unemployment and fostering economic development.

Keywords

unemployment, economic growth, GDP, Jordan

Language used: English

Date on which the thesis was submitted / produced: 2. 4. 2024

Thesis defence

• Date of defence: 27. 5. 2024
• Supervisor: prof. Ing. Mansoor Maitah, Ph.D. Ph.D.
• Reader: Jana Skřivánková, B.E., externi

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme:
Economics and Management