Towards Better and More Inclusive Jobs in Jamaica

In the heart of the Caribbean, Jamaica is celebrating a historic milestone: the lowest unemployment rate ever recorded. This achievement highlights not only strong recovery from the pandemic, but also underscores a long-term trend in reducing structural unemployment. The data also tells a story of persistent challenges and untapped potential.

Imagine a Jamaica where every person, regardless of gender, age, or ability, has access to fulfilling work that is inclusive, pays well, and offers opportunities for growth. This vision is within reach, but there are still hurdles to overcome. A closer look reveals that Jamaica has a smaller proportion of steady jobs with regular paychecks compared to its peers (Figure 1), which is an indicator of job quality. The struggle for better employment is most acute among women, youth, and persons with disabilities, who often face barriers that prevent them from fully benefitting from labor market opportunities.

Figure 1. Distribution of Job Types (2019)

Quality and inclusive employment in Jamaica not only uplifts the local workforce but also contributes to more robust and equitable economic growth. When Jamaicans have access to better jobs, it improves individual livelihoods, strengthens communities and drives sustainable development. By ensuring that all working-age individuals, especially the most vulnerable, can benefit from the labor market, Jamaica is not just enhancing its own economic landscape but also setting an example for inclusive growth. 

Yet, job quality and inclusive employment in Jamaica are hindered by structural economic challenges, such as limited long-term growth, declining labor productivity, and a larger low-productivity segment compared to peer countries. From 1975 to 2019, Jamaica's GDP per capita grew by only 0.2 percent, while regional peers averaged 1.9 percent. Over the past three decades, Jamaica’s productive structure has remained largely unchanged, and while peer countries have experienced rising labor productivity, Jamaica’s has declined since 2000. Small firms, which are prevalent in Jamaica, tend to offer lower-productivity, less-skilled jobs and lower wages than larger firms. This is a reflection of the broader economic environment, where innovation and business dynamism remain constrained.

The Jamaica Jobs Diagnostic identifies the main jobs problems, analyzes their causes, and offers policy options to foster debate on how to improve job outcomes. The following priority areas were identified to enhance job prospects:

• Policy fundamentals: macroeconomic stability and rule of law. Jamaica has made outstanding progress in improving policy fundamentals recently. Government reforms reduced debt levels,improved credit ratings, and managed inflation, despite a tough global economic environment.However, the rule of law, particularly in reducing crime and violence, remains an area where Jamaica lags behind peers, hindering private sector development. Continued efforts to promotemacroeconomic stability and rule of law are necessary to create an enabling environment for economic growth, investment, and improved job outcomes. 

• Cost of production inputs, particularly energy and electricity. Jamaica has one of the highest electricity costs in the world and ranks above regional peers in electricity outages, which hampers profitability, limits growth and likely hinders investment. While the government has made substantial efforts, there is scope to expand private investment in renewable energy with targeted policy actions. Additionally, energy efficiency can be boosted through infrastructure upgrades and storage investments, along with provision of incentives for energy savings to end-users and retrofitting buildings.

•  Entrepreneurial knowhow. Jamaica’s survival rates of small and medium sized enterprises (SMEs) are among the lowest in the region, pointing to a need for enhanced entrepreneurial capacity. Despite government efforts to increase access to finance for SMEs, challenges persist, with emerging evidence suggesting the issue largely lies with entrepreneurs. Expanding support for firms with high growth potential, facilitating local and international business linkages, and improving the entrepreneurship ecosystem are recommended steps forward. 

• Skills. The share of Jamaica's working-age population with higher education is low, yet there is a strong market demand for such workers, as shown by higher economic returns, employment rates, and greater likelihood of securing high-skill jobs compared to peer countries. The Jobs Diagnostic identified student engagement and secondary education quality as key factors in the skills deficit, exacerbated by skilled worker migration. A multi-pronged strategy is essential: enhance secondary education to improve student engagement and readiness for further education (or work); strengthen training programs to upskill the current labor force; and design strategic immigration policies to fill immediate gaps.

• Inclusiveness. Facilitating economic inclusion is crucial for improving the labor market outcomes of vulnerable groups. While Jamaica has most legal and institutional arrangements in place to address exclusion, implementation is undermined by social norms, capacity constraints and weak institutional coordination. Reinforcing efforts to prevent teen pregnancy, reintegrate adolescent mothers into education, improving access to quality childcare, enhancing social assistance programs like PATH, and incentivizing the hiring of persons with disabilities are important steps to ensure job market inclusiveness. 

Jamaica’s labor market outcomes have improved, but more can be done for better and more inclusive jobs. Solid policy fundamentals, coupled with targeted policy actions, can contribute to overcome critical barriers and enhance job outcomes. 

Subscribe and receive a weekly article