Publication site: National Directorate of Planning, Ministry of Finance
Date of publication: June 2021
Type of publication: Report
Decent work and economic growth
Cabo Verde is a country with a high level of inequalities and profound regional asymmetries. Reducing these inequalities depends to a large degree on sustained economic growth, but growth in and of itself is not sufficient – in other words, the way wealth is generated and distributed is important as well. Work is and always must be chosen as the link connecting growth and human development.
Between 2015 and 2020, real per capital GDP decreased on average 0.7% a year
Between 2015 and 2020, real per capital GDP decreased on average 0.7% a year, an average that comes due to the 15.8% drop registered last year after 3.4% average growth in the first 4 years of the period. The reduction in real per capita GDP came due to the 14.8% economic recession that took place in 2020, and this, at least in part, explains the increase in poverty in the population, which saw its income levels decrease. Over the course of the 5 years in question, real GDP per employed person grew on average just 1.3% a year due to the 5.8% decrease in the figure seen in 2020 as a result of the 9.6% decrease in the size of the employed population. This rate, however, was lower than that of the economic recession, and came after an average 3.1% growth per year in the first 4 pre-crisis years. The 4.7% average annual growth of the Cabo Verdean economy was, as such, insufficient to expand employment, but the country saw gains in productivity in the first four years of the cycle, gains that were, however, wiped out by the COVID-19 pandemic. One of the marked characteristics of the labor market in Cabo Verde is its informality, which is not dominated by agriculture, as in 2020, some 60% of informal jobs were non-agricultural in nature. Informal jobs represented 51.6% of total employment, with an average annual reduction of 1.9% since 2015. In general, women are at a disadvantage in the job market, as approximately 53.4% of NEET youth were female. Nevertheless, the population of NEET youth (57,605) dropped considerably – on average, 4.1% a year until the last pre-pandemic year. As with underemployment, informality is more expressive in rural municipalities, where it represents more than 70% of all jobs. In Sal and Boa Vista, the most tourism-intensive municipalities, informal employment stands at just 23% and 30.7%, respectively. A considerable number of informal workers saw a drastic reduction in income due to the quarantine and to the drop in global demand. Outside of the agricultural sector, informality affects more men than women, as last year some 67.5% of informal jobs among men were in non- agricultural sectors, against 51.8% for women. Both figures were below those registered in 2015, by 13.3 and 19.3 percentage points, respectively.
Men devote more time to paid labor than do women
Men devote more time to paid labor than do women. In 2020, some 31% of all employees worked fewer than 40 hours per week, with the figure standing at 28.1% for men and 35.3% for women. Indeed, in the 2020 IMC reference week, employed men worked on average 40.9 hours a week, approximately 3.6 hours more than employed women.
In 2019, the majority of the employed population was male (54.6%) and resided mostly in urban areas (70.2%). 36% belonged to the 35- to 64-year-old age bracket, 43% had gone through elementary schooling and 62.7% worked in the tertiary sector. Some 53.9% of the unemployed population was male, the vast majority of which (78.2%) lived in urban areas. 44 out of every 100 were between 15 and 34 years of age and the majority (52.4%) had a high school education. The underemployed population is divided almost evenly between males and females. About half of the underemployed population (50.7%) lived in urban areas, and 48 out of every 100 underemployed individuals were between 15 and 34 years of age. Most (52.5%) had an elementary school education and 40 out of every 100 worked in the primary sector. The inactive population was mostly (59.1%) female, 36 out of every 100 were between 15 and 34 years of age, 60 out of every 100 resided in urban areas and 44 out of every 100 had a high school education.
With the outbreak of COVID-19, the microeconomic framework deteriorated, with the economy entering recession with a 14.8% drop in GDP
In 2020, with the outbreak of COVID-19, the microeconomic framework deteriorated, with the economy entering recession with a 14.8% drop in GDP that affected mainly the service sector, namely transportation, tourism, trade and other services, and the industrial sector. Both sectors were widely conditioned by the global lockdown. The employed population fell to 186,267 people, representing a 9.6% reduction from the previous year, or, in absolute terms, the elimination of 19,718 jobs, mainly in urban areas (68.8%). The unemployed population grew 20.8%, with the unemployment rate reaching 14.5%, with the increase in unemployment affecting men more (14.8% against 10.7% in 2019) than women (14.2% against 12.1% in 2019), and young workers in the 15- to 24-year-old age range (32.5%) more than older workers. The increase also hit those with educations of up to high-school level (19.1%) more than those with other levels of learning.
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