The Vanuatu National Statistics Office (VNSO) implemented the National Sustainable Development Plan (NSDP) Survey between April 2019 and March 2020. This survey provides all major baseline data for the NSDP indicators, including those related to the Vanuatu labour market. Also, given period of time in which the survey was carried out, it constitutes the key source for the pre-disaster baseline information. Data from the National Census 2020 will serve as the post-disaster labour market information to understand the impact of COVID-19 on employment.
This document summarizes the key labour market indicators from the NSDP Baseline Survey providing concrete information on the structure of the labour market in Vanuatu. The full document of the Labour Force Monograph, developed with the support of the International Labour Organization, can be downloaded here.
The NSDP Survey depicts the composition of the labour market detailing the number of individuals in working-age population (WAP, age 15+), and within this category, the number of people under different labour status that, in general terms, can be employed, unemployed or out of the labour force.
Figure 1. Working-age population, labour force and employment. Vanuatu, 2019
- In 2019, the WAP (age 15+) was 183,460, which corresponded to 62.1 percent of the population.
- The number of individuals in the labour force (defined as those individuals working or looking for a job) was 92,177, so the Labour Force Participation Rate (LFPR) corresponded to 50.2 percent.
- In total, 84,859 individuals were in employment. This implies that the national unemployment rate in 2019 was 7.9 percent.
- For those out of the labour force (49.8 percent of the WAP), 9,042 individuals would work in case of finding the right job, while 84,242 would not join the labour force (because of different reasons including age and personal responsibilities as studies and family care).
- In yellow, it is highlighted the number of people available to work (or to work more) but not finding the corresponding job opportunities (around 30 thousand individuals). The rest of the document looks into more detail the demographic composition by labour status. Each of the following sections show how education, gender and geographic location are importantly correlated with employment status.
Labour Force Participation
The LFPR in urban areas was 61.2 percent, which is considerably higher than in rural areas (45.9 percent). In urban areas, 63.4 percent of men participated in labour force, comparing to 58.9 percent of women. In rural areas, 50.5 percent of men participated in labour force, while only 41.3 percent of women are active in the labour market (Panel a, Figure 2).
Also, there existed a clear positive correlation between educational attainment and participation in the labour force: LFPR was 79.2 percent for tertiary level, 58 percent for secondary level, 49.9 percent for primary level, and only 25.7 percent for less than primary level. The male participation rate was higher than female rate across all education levels (Panel b, Figure 2).
Figure 2. LFPR by geographic coverage, educational attainment, and sex. Vanuatu, 2019
Among the employed population in 2019 (84,859 individuals), 55 percent were men and 45 percent women, which implies a gender gap in employment by 10 percentage points.
In terms of the distribution of the employed population by economic activities, Figure 3 indicates that service sector accounted for half of the employed population, totaling 41,922 workers. Women are more likely to be employed in the service sector than men, especially in the wholesale and retail trade and in education. Agriculture, forestry, and finishing sector employed 31,617 persons, adding up to 37.3 percent of employed population, while industry sector provided 7,544 jobs (or 8.9 percent of all jobs). Figure 3 provides more detail presenting the distribution of employment by sector and sex.
Figure 3. Employment by economic sector and sex. Vanuatu, 2019
Youth unemployment has been an important concern in Vanuatu during at least twenty years. The Vanuatu’ Decent Work Country Programme in 2009, pointed out that the low absorption of school leavers into formal employment had contributed to a serious deterioration of law and order. Given the social implications of youth employment, it is important to analyse the level of unemployment in this segment of the population.
Individuals aged between 15 24 made up 15.1 percent of the employed population. The overall unemployment rate was 7.9 percent, with male unemployment rate 6.7 percent and 9.4 percent for women. In contrast, youth unemployment rate was 18.0 percent and it reached 20.1 percent for women in this age group (see Figure 4)..  Government of Vanuatu and International Labour Organization, 2009. International Labour Organization Decent Work Country Programme Vanuatu.  Unemployed persons refer to those of working age who are: a) without work during the reference period (seven days prior to the survey); b) currently available for work (for either paid employment or self-employment); and c) seeking work.  The unemployment rate shows spatial disparities. In the urban areas, 3.3 percent are reported unemployed, comparing to the 10.4 percent unemployment rate in rural areas, indicating a high level of labour underutilization in rural areas in Vanuatu.
Figure 4. Unemployed persons aged 15 years and above and unemployment rate (%). Vanuatu, 2019
The concept of informal employment is based on the job relationship between workers and employers. Employees are considered to have informal jobs if their employment relationship is, in law or in practice, not subject to national labour legislation, income taxation, social protection or entitlement to certain employment benefits. Informal employment can be carried out in formal sector enterprises, informal sector enterprises, or households.
Panel (a) of Figure 5 shows the total number of informally employed workers in Vanuatu by sex in 2019. Out of 84,859 employed persons in the country, 56,806 were informally employed (or 66.9 percent). By sex, informal employment among women is higher than that of males. Out of 38,223 employed women, 68.7 percent are in informal employment (or 26,242 persons), compared to 65.5 percent of men.
Panel (b) in Figure 5 shows that there exists a clear relationship between low educational attainment and employment in the informal sector. The informal employment rate among workers with tertiary education level is only 15.1 percent, while it is 95.3 percent among workers with less than primary education. In terms of economic sector, Panel (c) shows that informal employment incidence is the highest in the agriculture, forestry and fishery sector (95.1 percent), followed by