Labour Market and Unemployment in Sudan

This paper examines the structure of the labour market and unemployment in Sudan. One advantage of our analysis in this paper is that we explain several stylized facts on labour market using new secondary data on population, employment and unemployment based on Sudan Central Bureau of Statistics (2010) the Fifth Sudan Population and Housing Census (2008). An interesting element in our analysis is that we explain several stylized facts on the relation between structure of the labour market and demographic structure, labour force, participation rates, economic activities, low skill level and high unemployment rate defined by gender, mode of living and main geographic areas in Sudan. Different from the findings in the empirical literature in support of the Phillips curve on the negative correlation between inflation and unemployment rates, we find positive and significant correlation between unemployment and inflation rates in Sudan during the period (2000-2008). Moreover, different from the analysis in the Sudanese literature we present a more comprehensive analysis of four stylized facts on the unemployment problem in Sudan, these include distinction of several types of unemployment; interpretation of unemployment problem from two different endogenous and exogenous perspectives due to endogenous and exogenous causes; analysis of high incidence of unemployment among youth population and high mismatch between educational qualifications -supply- and labour market requirements- demand. The major policy implication from our findings indicate that since unemployment problem is related to these endogenous and exogenous causes, therefore, policies intervention for reducing unemployment should deal with these endogenous and exogenous causes. Notably, improvement of job creation and quality of educational policies and consistency between educational qualifications (output) and labour market requirements. Another major policy implication from our result on the significant positive correlation between increase in unemployment and inflation rates (2000-2008), implies that macroeconomic policies aimed at or targeting reducing inflation rates would also contribute to reduce unemployment rates in Sudan.