Migration and the labour market

A growing number of Cambodians, especially young people, are moving abroad to find jobs with higher wages in the region. How is the reduction of labour at both national and household levels affecting wage levels, unemployment and labour supply? Is it constraining productivity and development? Do remittances affect household labour decisions or allow them start up a small business? This section attempts to answer some of the questions by exploring the interrelationships between migration and the labour market in Cambodia.

In 2014, Cambodia's labour force participation rate1 was 83%: 88% for men and 77% for women. labour force participation rates in rural areas are higher (84%) than in Phnom Penh (78%) and other urban areas (79%). unemployment is low, attributable mainly to the fact that most Cambodians are primarily self-employed. The National Institute of Statistics reported an employment rate of 82% in 2014, a 2-percentage point drop from 2009. Since 2008 Cambodia has benefitted from a young labour force, the “demographic bonus”, which is expected to last until 2038 (NIS, 2015). The labour force participation rate of young workers (15-24) was 72% in 2014 compared to 74% five years ago.

Despite the growing importance of industry and services, agriculture remains the most important contributor to employment, accounting for 45% of the total employed population (aged 15-64), compared to services (30%) and industry (24%). However, agriculture's share in employment dropped 12 percentage points between 2009 and 2014, while industry's employment share increased by 8 points and services by 4 points (NIS, 2015). While employment in agriculture is common among both men and women, women are engaged in the sector more than men. There has been an increase in waged employment over the last five years although self-employment remains the dominant form of employment. This increase reflects the increase in wage employment in industry and services. Wage employment is expected to increase further as the economy diversifies more intensively into industry and services.

The IPPMD survey data echo these national patterns. For instance, the labour force participation rate among the survey sample (for people aged 15-64) was about 80%: 85% for men and 75% for women. The rate is higher in rural areas (82%) than in urban areas (72%). The employment rate is 79%: 84% among men and 75% among women, and is higher in rural areas mainly because of the prevalence of self-employment. Self-employment remains dominant, accounting for 59% of the surveyed working population (aged 15-64), followed by employment in the private sector (21%) and in the public sector (6%). Around 20% of the working population surveyed claimed not to be engaged in paid employment or to be looking for work. The rate is higher (24%) for all individuals aged 15 and above as this includes retired people.

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