Unemployment and Job Satisfaction in the South Caucasus

The importance of the labour market for social and economic stability is unquestionable. An analysis of CB 2012 survey data for Armenia, Azerbaijan and Georgia shows a high level of social concern about work-related conditions such as unemployment. Even those who have a job are more likely to be dissatisfied with it in Armenia, compared to Georgia where more people are neutral about their job, and Azerbaijan in which the majority says they are satisfied with their job. This post provides information on the relative importance of labour market-related issues in Armenia, Azerbaijan and Georgia as perceived by respondents from these countries. This blog also presents levels of job satisfaction in the South Caucasus region.

This post uses data from CB 2012 questions about the most important issues facing the country, which includes two answer items pertaining to the labour market: unemployment and wages. These two items were collapsed into a single category which I shall call the “Labour market“ for the analytical purposes of this blog. Other general categories were the rule of law, social and economic issues (excluding labour market), international relations, tolerance and human rights, and political and territorial stability.

Labour market concerns top the list of important national issues in Georgia and Armenia. In Azerbaijan these concerns come second after the issue of political and territorial stability, mostly due to the high concern with unsolved territorial conflicts. Interestingly, other social and economic issues altogether (including poverty, pensions or inflation) do not outweigh the importance of employment for the three countries.  

The original answer options were collapsed into more general categories: Labour market (unemployment and low wages), Social and economic issues (unaffordability of healthcare, low pensions, poverty, low quality of education, rising prices/ inflation), Political and territorial stability (lack of peace, political instability, unsolved territorial conflicts), Rule of law (corruption, unfairness of courts, unfairness of elections, violation of property rights), Tolerance and human rights (violation of human rights, religious intolerance), and International relations (not having NATO membership, relations with Russia).

Further statistical analysis (logistic regression using country, years of education, settlement type, age and gender) show that both Armenians and Georgians are over 3 times more likely than Azerbaijanis to say these labour market concerns are central issues for their country. These answers mostly reflect concern about unemployment rates in these countries (19% in Armenia, 15.1% in Georgia and 5.4% in Azerbaijan in 2011 according to the World Bank and International Labour Organization). It is also worthwhile to mention here that Azerbaijan is a middle income country, which is not the case for Armenia or Georgia. Type of settlement also matters; across the three countries capital residents are least likely to put labour market-related issues first on the priority list, while inhabitants of rural areas do so significantly more often.

Disparities in unemployment rates and minimum wage across the region (for more detail see Country Reports on Human Rights Practices, United States Department of State, 2012) might be influential macro-level factors triggering cross-national differences in the assessment of the labour market importance. However, other indicators suggest that substantial differences also exist on an individual level – such as evaluations of job satisfaction which reflects personal experiences at work.

On average, Armenians are most dissatisfied with their work, while Azerbaijanis are the most satisfied. Interestingly, there are significant cross-sectorial differences in the level of satisfaction with work in Armenia and Georgia. In both countries people who work in construction, trade, or education are significantly less satisfied than people who work in agriculture, forestry or who are self-employed. Employment sector is not a significantly differentiating criterion in Azerbaijan. Lastly, the level of satisfaction with one‘s jobs is not related to the assessment of the labour market as an important issue facing the country. This, however, does not mean they cannot both reflect more general problems trapping labour force in the analysed markets, especially as the average level of job satisfaction is lower in countries with higher unemployment and lower minimum wage.

For more data on employment and perceptions of labour market issues please visit the CRRC website to download the complete CB 2012 dataset.