Job Trends, June 2014 Issue: Little Change in Unemployment Rates; Uneven GDP Growth in Developing Countries

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  • Number 10

Arne Hoel / World Bank

In the third quarter of 2013...
  • Employment growth improved, but remained below rates seen in 2011 and most of 2012
  • GDP growth rates remained around 3.5 percent
  • East Asia saw the most dynamic GDP growth, averaging 5.8 percent

Unemployment continued its slow downward trend, while gross domestic product (GDP) growth rates continued to hover around 3.5 percent during the third quarter of 2013. Real wage growth took a small hit, declining to about 3 percent—a rate onethird lower than that recorded in the third quarter of 2012.

Driven largely by the increase in Eastern Europe and Central Asia, employment growth showed improvement, but remained below the growth rates registered in 2011 and most of 2012. Overall, by the third quarter of 2013, GDP growth and employment outcomes showed few signs of returning to 2011 levels.


Note: Values represent the median value of growth rates estimated for 20 countries for which there were available data during the period Q3/2011 – Q3/2013: Armenia, Belarus, Brazil, Chile, China, Colombia, Ecuador, Kazakhstan, Kyrgyzstan, Lithuania, Mexico, Peru, the Philippines, Romania, the Russian Federation, South Africa, Thailand, Turkey, Ukraine, and the Bolivarian Republic of Venezuela.

Source: Author’s calculation using CEIC, IMF and National Statistical Offices data.

Regionally, the most dynamic region in terms of GDP growth was again East Asia and the Pacific, with an average of 5.8 percent. This was fueled by China’s increased GDP growth (7.8 percent); all other countries in the region had slower GDP growth compared to their third quarter 2012 performance. Employment growth declined in most East Asian countries and even became negative in Thailand. Throughout the region, the unemployment rate barely budged, and despite the increase in real wage growth in many countries, a substantial drop in Indonesia’s real wage growth halved this indicator from 6.4 to 3.3 percent for the region. 

Europe and Central Asia presented a mixed picture regarding GDP growth, showing an increase in countries such as Kyrgyzstan, Moldova, Romania, and Turkey, while decreasing in Armenia, Belarus, Lithuania, the Russian Federation, Tajikistan, and Ukraine. Compared with the third quarter of 2012, GDP growth for the region declined from 3.5 to 3.1 percent. Employment growth also declined, with a few exceptions, notably Moldova. The region’s unemployment rate improved slightly, falling from 6.2 to 6 percent between the third quarters of 2012 and 2013, and real wage growth dropped substantially, from 8.5 to 3.3 percent. 

Latin America and the Caribbean also revealed a mixed picture. When compared with the third quarter of 2012, average GDP growth across the region during the third quarter of 2013 declined from 4.4 to 3.4 percent, which can largely be attributed to a slowdown of GDP growth in Mexico, Peru, and the Bolivarian Republic of Venezuela. The regional average employment growth barely changed between the third quarter of 2012 and the third quarter of 2013, while the employment growth rate declined slightly from 2.4 to 2.3 percent and unemployment overall improved from 6.5 to 6.2 percent. 

Finally, the The South African economy continued to deteriorate: GDP growth decreased from 2.2 in the third quarter of 2012 to 1.7 in the same quarter of 2013. Small improvements were observed in employment. Employment grew from 2.5 to 2.8 percent, while unemployment slightly declined from 25.5 to 24.7 percent. Still, South Africa had the highest unemployment rate of all countries in the data set and recently experienced an important contraction of real wages. Real wage growth plummeted from 3 percent in the third quarter of 2012 to -0.6 percent in the third quarter of 2013.

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JobTrends is a regular series monitoring labor markets in developing countries. It is a collaborative effort between the Human Development Network (HDN) and the Poverty Reduction and Economic Management (PREM) Networks of the World Bank.