MINISTRY OF HIGHER EDUCATION TOLO -E- AFTAB

INSTITUTE OF HIGHER EDUCATION FACULTY OF

ECONOMICS BBA DEPARTMENT

(Bachelor Degree Monograph)

Analysis of Labor Market Dynamics and Youth Unemployment in
Afghanistan (A Case Study of the Labor Market)

Supervisor: Rashid Mashkor

Prepared by: Sliman Rahim
Year: 1402
1
 APPROVAL SHEET

This thesis entitled “Labor Market Dynamics and Youth Unemployment

Solutions in Afghanistan “prepared and submitted by Sliman Rahim in partial
fulfillment of
requirement for degree of BACHELOR OF BUSINESS
ADMINISTRATION, has been examined and approved by the committee on
oral examination as PASSED with the grade of % on

Supervisor:

Advisor:

Head of department:

Chancellor:

2
 DECLARATION FORM

Sliman Rahim Registration No:

Student of bachelor of Business Administration at Tolo –e- Aftab Institute of

Higher Education

Kabul Afghanistan hereby declares that the project report title as:

Analysis of Labor Market Dynamics and Youth Unemployment Solutions

in Afghanistan

Result of my own work and all the information include has been obtain in
Accordance with academic

Rules and ethical policy specified by the Institute

Name: Sliman Rahim

Signature: S

Date:

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 FOREWORD
With utmost gratitude and reverence, I offer my praises and appreciation to the

supreme ALLAH, the ultimate wellspring of knowledge and sagacity bestowed

upon humanity. It is through His divine grace that the faculties of intellect and

learning have enabled me to contribute to the existing compendium of

knowledge. I hold in high esteem and veneration the eternal beacon of guidance

He represents for all of humanity.

I am compelled to express my sincere indebtedness to my thesis mentor, Mr.

Rashid Mashhour, whose consistent and invaluable guidance has been

instrumental throughout the composition of this thesis, culminating in its

successful completion. Furthermore, I extend my profound acknowledgment to

the distinguished department and erudite faculty of business administration at

TOLO-E-AFTAB. This institution has served as the primary bastion of

knowledge and enlightenment, affording me a platform to apply and refine my

skills over the course of four enriching years of education.

In the same breath, my heartfelt gratitude extends to my cherished family and

companions whose unwavering support has been a cornerstone in reaching this

juncture. Their ceaseless inspiration and encouragement have provided the

impetus for me to realize my academic aspirations. Lastly, I wish to express my

sincere thanks to all those who have lent profound insights and assistance to this

endeavor.

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 ABSTRACTION

This monograph is dedicated to conducting an in-depth exploration of the

complex and ever-changing labor market dynamics in Afghanistan, with a special
focus on the critical issue of youth unemployment. The economic landscape of
the nation has undergone substantial transformations in recent years, driven by a
confluence of factors ranging from shifts in population demographics to evolving
economic structures and changes in the political sphere. These influences
collectively shape the ebb and flow of employment opportunities available to the
youth population.
Central to the core of this study is an exhaustive investigation into the very roots
that contribute to the persistent challenge of youth unemployment. The
repercussions of this challenge extend far beyond economic statistics, permeating
various layers of Afghan society. From hindering individual career prospects and
financial independence to potentially fueling social tensions, youth
unemployment's ramifications are intricate and multifaceted.
Moreover, the significance of this monograph transcends the identification of
problems; it delves into the realm of devising practical and actionable solutions
to address the complexities of youth unemployment. Drawing inspiration from
both local context and international best practices, this study strives to present a
holistic framework of strategies. These strategies encompass not only policy
recommendations tailored to the Afghan setting but also delve into the prospects
of education reform, the promotion of entrepreneurial mindsets, and enhanced
collaboration with the private sector to foster meaningful youth employment.
In essence, this monograph seeks to provide a comprehensive understanding of
Afghanistan's shifting labor market dynamics, contextualized through the lens of
youth unemployment. By delving into the underlying causes and consequences
of this challenge and offering pragmatic pathways for its alleviation, this study
aspires to make a substantial contribution to the ongoing discourse surrounding
Afghanistan's economic growth and societal well-being.

5
 Table of Contents
Introduction

1. Research Question ....................................................................................................................................... 9

2. Research Hypothesis.................................................................................................................................... 9

3. Significance of the Research ....................................................................................................................... 9

4. Scope and Limitations ............................................................................................................................... 10

5. Research Methodology .............................................................................................................................. 10

6. Literature Review ...................................................................................................................................... 10

Chapter One
1. Definitions of Important Terms .............................................................................................................. 14
Unemployment …………………………………………………………………….……………....7
Underemployment …………………………………………………………………………7
Labor Force Participation Rate ……………………………………………………..……8
Skill Mismatch ……………………………………………………………………………. 8
Decent Work …………………………………………………………………………….... 8
Formal Sector ……………………………………………………..……………………… 8
Informal Sector……………………………………………………………………………. 8
2. General Aspect: Labor Market ............................................................................................................... 15
3. Labor market situation in Afghanistan .................................................................................................. 16
4. Labor force participation ........................................................................................................................ 17
5. Underemployment ................................................................................................................................... 19
6. Employment and Unemployment: controversial, ambiguous, and equivocal figures ………………11
7. Socio-professional network ..................................................................................................................... 21
8. Well-Known Microfinance Institutions in The World .......................................................................... 22
7.1 What positions do young employees occupy within your company? ........................................ 23

9. Women participation to the labour market ........................................................................................... 25

10. Child and Bonded Labour ...................................................................................................................... 30
11. Refugees, returnees, and internally displaced persons (IDPs) ............................................................. 30
1.Early waves of refugee return (2002‐2005) – ....................................................................... 30
2.Later waves of refugee return ............................................................................................... 30

12. Extremely Marginalized communities ................................................................................................ . 32

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 Chapter Two

1. Factors Contributing to Youth Unemployment: .................................................................... 36

2. Demographic Shifts and Population Growth: ........................................................................ 36
3. Conflict and Political Instability: ............................................................................................ 37
4. Economic Diversification and Job Creation: ......................................................................... 37
5. Gender Disparities and Societal Norms: ................................................................................ 38
6. Skill Mismatch and Education Challenges ............................................................................. 38
7. Socio-Economic Consequences of Youth Unemployment ...................................................... 38

Chapter Three
1. Macroeconomic Indicators .................................................................................................................. 40
2. Sectors of employment ......................................................................................................................... 42
3. Agriculture: below the poverty line… but not impacted by the transition ..................................... 43
4. Services: an artificial bubble, strongly impacted by the transition ................................................. 44
5. Mining: promising in theory, with many practical sine-qua-non ..................................................... 45
6. An Overview of Afghan Enterprises ................................................................................................... 46

Chapter Four Findings and Insight

1. Introduction .............................................................................................................................. 49
2. Findings .................................................................................................................................... 49

2.1 Labor market Dynamics and Structure ................................................................................. 50

2.2 Youth Unemployment: Causes and Implications: .................................................................. 50
2.3 Government Policies and Private Sector Engagement: ......................................................... 50
2.4 Skill Development and Education Reforms............................................................................ 50
2.5 Entrepreneurship and Start-up Ecosystem ............................................................................ 50
2.6 International Best Practices and Adaptation ........................................................................ 51

Chapter Five Conculsion and Recommandations

Recommendations for Sustainable Change ................................................................................................ 51

Recommendations ......................................................................................................................................... 53
LIST OF ABBRIVEATIONS : ..................................................................................................................... 55
BIBILOGRAPHY ......................................................................................................................................... 56
APPENDIX ……………………………………………………………………………………………. 51

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 Introduction of Labor Market Dynamics and Youth Unemployment in
Afghanistan
The Afghan labor market stands at a crossroads, shaped by a complex interplay
of socio-economic, demographic, and political factors. This monograph
undertakes a comprehensive exploration of the intricate landscape of labor market
dynamics and the vexing issue of youth unemployment within Afghanistan. With
a focus on shedding light on the root causes, implications, and potential solutions,
this study aims to provide a comprehensive understanding that serves as a
compass for policymakers, researchers, and stakeholders navigating the path
towards sustainable economic growth and social progress. In the heart of this
study lies a crucial question: how does Afghanistan's labor market respond to the
aspirations and challenges of its burgeoning youth population? As the nation's
demographics evolve, so too do the demands place on its economic infrastructure.
The critical nexus between labor market dynamics and youth unemployment
requires a nuanced understanding to pave the way for effective solutions.

The monograph unfolds through a structured exploration of key dimensions, each

chapter illuminating a distinct facet of this intricate issue. Beginning with an
introduction to the broader labor market context, the subsequent chapters dissect
the labyrinthine causes of youth unemployment, the effects of skill mismatch and
education disparities, and the ripple effects of a generation left unemployed.
Regional disparities, government policies, private sector engagement, skill
development, entrepreneurship, international best practices, and a comprehensive
set of recommendations all contribute to the holistic framework that emerges
from this study. Guided by a synthesis of research findings and insights from
various sources, including "The State of Employment in Afghanistan" by the
International Labor Organization (ILO) and the report "Economic Assessment
and Labor Market Survey of Balkh, Baghlan, Kandahar, and Kunduz" by Samuel
Hall, this monograph seeks to bridge the gap between theory and practice.

By aligning international perspectives with local realities, it endeavors to offer a

roadmap for action. The magnitude of youth unemployment in Afghanistan is not
only an economic challenge but also a societal concern that reverberates through
generations. It is our hope that this monograph, through its meticulous analysis
and multifaceted approach, will contribute to the ongoing discourse on labor
market dynamics and youth unemployment, sparking innovative strategies,
fostering collaboration, and propelling Afghanistan towards a brighter and more
inclusive future.

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Research Question
How can we better understand the reasons behind youth unemployment in
Afghanistan's and find effective solutions to help the country's young people
secure meaningful employment?

Research Hypothesis
The research hypothesis for the study on Labor Market Dynamics and Youth
Unemployment Solutions in Afghanistan posits that a comprehensive
understanding of the intricate labor market dynamics, coupled with targeted
interventions addressing socio-economic, educational, and policy-related factors,
will contribute to a reduction in youth unemployment rates. This hypothesis
assumes that by identifying key drivers of unemployment among young
individuals and implementing effective strategies, Afghanistan can create a more
conducive environment for youth to secure meaningful and sustainable
employment opportunities, thereby fostering economic growth and social
stability.

Research Objective
The research on Labor Market Dynamics and Youth Unemployment Solutions in
Afghanistan is driven by specific objectives aimed at comprehensively
understanding the complex issues at hand and formulating effective strategies for
positive change. The primary research objectives include:

• Analyzing Labor Market Trends

• Uncovering Underlying Causes
• Exploring Youth Experiences
• Evaluating Existing Interventions
• Proposing Sustainable Solutions

These research objectives collectively aim to analyze labor market trends,

uncover the root causes of youth unemployment, explore the experiences of
young individuals, evaluate existing interventions, and propose effective
solutions to address this pressing issue in current situation in Afghanistan.

Significance of the Research

The research on Labor Market Dynamics and Youth Unemployment Solutions in
Afghanistan holds great significance as it addresses a pressing issue with wide-
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ranging implications. By investigating the intricate dynamics of the labor market
and the challenges faced by the youth, this study aims to uncover the underlying
causes of high unemployment rates and explore potential remedies. Beyond its
academic value, this research has practical importance as it could inform policy
decisions, aid in designing targeted interventions, and contribute to sustainable
development efforts. Tackling youth unemployment is crucial for fostering
economic growth, social stability, and unlocking the untapped potential of
Afghanistan's young population. Additionally, the insights garnered from this
research may have applicability in other regions grappling with similar
challenges, making this study's findings valuable on both a local and global scale.

Scope and Limitations

Undertaking research on Labor Market Dynamics and Youth Unemployment in
Afghanistan faces challenges, particularly in the context of ongoing security
concerns, limited access to current information, and the absence of reliable online
resources. The volatile environment hampers on-the-ground investigations, while
the sensitive data nature limits comprehensive insights. Efforts were made
through interviews and consultations, primarily drawing from secondary sources.
Despite these challenges, a blend of qualitative and quantitative data ensures
robustness in the research. This study remains committed to delivering insightful
findings despite hurdles, substantiating its hypothesis on Labor Market Dynamics
and Youth Unemployment in Afghanistan.

Research Methodology
In summative unity, this library-based research methodology is a harmonious
symphony orchestrated to uncover the intricate tapestry of Afghanistan's labor
market dynamics. Through the lens of qualitative analysis, secondary data
synthesis, cross-referencing, and ethical citation practices, this methodology
empowers the study to paint a vivid and well-informed portrait of the youth
unemployment challenge. Grounded in the robustness of existing knowledge, this
approach propels the study towards proposing pragmatic solutions rooted in
credibility and substantiated insights.

Literature Review
Embedded within this study is a library research methodology, meticulously
crafted to navigate the intricate landscape of Afghanistan's labor market dynamics
while concurrently proposing practical solutions to counteract the burgeoning
issue of youth unemployment. This methodology finds its essence in the
qualitative analysis of existing literature, which serves as the cornerstone of
understanding the multifaceted challenges at play. By delving into a myriad of
scholarly articles, reports, case studies, and pertinent publications, a
comprehensive comprehension of youth unemployment's underlying
complexities is harnessed.
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In lieu of traditional primary data collection, this methodology leverages a
synthesis of secondary data from reputable sources, forming the bedrock upon
which this study's insights are constructed. The extensive repertoire of reliable
sources such as government reports, publications by international organizations,
esteemed academic journals, and outputs from reputable research institutions is
consulted. The resulting amalgamation of information from diverse and credible
sources engenders a holistic depiction of the factors driving youth unemployment
and the potential avenues to alleviate it.

Critical to the methodology is the art of cross-referencing and data triangulation,

a process that meticulously cross-validates information from various sources.
This meticulous approach ensures the coherence and robustness of findings, thus
safeguarding against potential biases or inaccuracies that may arise from a single-
source perspective.

Ethical considerations form a guiding principle throughout this methodology. A

steadfast commitment to proper citation guidelines is upheld, paying due homage
to the original authors and researchers whose work enriches this study. Every
piece of information, whether derived from scholarly articles, official reports, or
credible publications, is impeccably cited, fostering transparency, integrity, and
the establishment of a reputable foundation.

The literature review presented in this chapter provides an in-depth exploration

of the prevailing discourse on labor market dynamics and youth unemployment
in Afghanistan. Drawing upon a wide range of scholarly works, reports, and
research publications, this section aims to establish a comprehensive
understanding of the multifaceted factors contributing to youth unemployment
and its far-reaching implications.

Labor Market Structure and Evolution

A foundational aspect of this literature review revolves around the examination

of Afghanistan's labor market structure and its evolution over recent years.
Scholars such as Samuel Hall have highlighted the dominance of agriculture and
extractive industries in the country's employment landscape, underscoring the
need for economic diversification to foster job creation and absorption of the
burgeoning youth population. Additionally, Shah Mahmood Khan notes the
impact of political and economic transitions on the labor market's ability to adapt
to changing conditions, shaping the challenges faced by the younger workforce.

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Root Causes of Youth Unemployment

The literature review delves into the root causes of youth unemployment in
Afghanistan. Samuel Hall underscores the role of demographic shifts, with a
youth bulge exerting pressure on the labor market. These demographic changes,
coupled with the ongoing conflict and political instability, have been identified
by his as exacerbating factors, limiting the creation of new employment
opportunities and stifling economic growth.

Education and Skill Mismatch

Scholarly works such as Pravin Sinha emphasize the importance of addressing

education and skill mismatch as a critical contributor to youth unemployment.
The review highlights the insights provided by Organization for Economic Co-
operation and Development International Labour Organization who stresses the
need for an education system that aligns with the demands of the evolving labor
market, enhancing the employability of graduates. This alignment is particularly
vital in addressing the observations made by Pravin Sinha regarding the
disconnect between formal education and practical skills required by employers.

Socio-Economic Consequences

The socio-economic consequences of youth unemployment are addressed in

depth within this literature review. Samuel Hall draws attention to the potential
for social unrest and instability resulting from high youth unemployment rates.
Moreover, the research of Samuel Hall underscores the economic ramifications,
pointing out the loss of human capital and productivity as a result of untapped
youth potential.

In summation, this literature review draws from a diverse array of scholarly

sources to provide a comprehensive overview of the labor market dynamics and
youth unemployment challenges in Afghanistan. By examining the labor market
structure, root causes of youth unemployment, education-related issues, socio-
economic consequences, government policies, and private sector engagement,
this section sets the stage for the subsequent chapters, which delve deeper into
specific aspects of the issue and propose potential solutions based on this well-
rounded understanding.

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 Chapter one a comprehensive Overview of Labor Market

The labor market landscape in Afghanistan is characterized by unique challenges and

opportunities, shaped by its socio-economic context and historical factors. With a
population of over 37 million, Afghanistan boasts a substantial workforce, of which a
significant portion falls within the youth age bracket, between 15 to 29 years old. This
demographic bulge underscores the importance of addressing youth unemployment as a
critical element for the nation's development and stability. However, despite this
demographic advantage, Afghanistan's labor market faces formidable hurdles. The
majority of the workforce is engaged in the informal sector, encompassing activities such
as agriculture, small-scale trading, and day labor. This informal sector, while providing
a livelihood for many, often lacks job security, social protection, and access to adequate
working conditions. Formal employment opportunities are concentrated in sectors such
as government, education, and public administration, with limited openings in industries
that require advanced skills or specialized training. This structural imbalance between
labor demand and supply contributes to higher rates of unemployment, particularly
among the youth population.

A critical factor exacerbating the labor market challenges is the persistent conflict and
insecurity within Afghanistan. The ongoing instability has not only hindered economic
growth and investment but also disrupted the education system, limiting access to quality
education and skill development opportunities. These circumstances have contributed to
a mismatch between the skills possessed by the workforce and those demanded by the
evolving labor market. Efforts to address these challenges have been undertaken through
various youth employment initiatives and vocational training programs. While such
interventions have demonstrated pockets of success, they often struggle to scale up due
to funding constraints, limited institutional capacity, and the complex security
environment. To effectively address labor market dynamics and youth unemployment, it
is crucial to recognize the intersectionality of factors at play. This includes
acknowledging the interconnections between education, vocational training,
entrepreneurship, and the broader economic landscape. A comprehensive approach that
encompasses policy reforms, investment in education and skill development, and
sustainable job creation across various sectors holds the potential to transform
Afghanistan's labor market, unlock its youth potential, and contribute to long-term socio-
economic stability.

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1. Definitions of Important Terms

Unemployment: Unemployment refers to the condition where individuals of working age

who are actively seeking employment are unable to find jobs. In the context of
Afghanistan, this term signifies the challenge of individuals who are without work and
seeking employment opportunities1.

Underemployment: Underemployment occurs when individuals are employed in jobs

that are inadequate in terms of hours, income, or skill utilization. In Afghanistan,
underemployment is particularly prominent due to the prevalence of informal and casual
labor, often characterized by low productivity and uncertain work arrangements2.

Labor Force Participation Rate: The labor force participation rate represents the
proportion of the working-age population that is either employed or actively seeking
employment. This rate provides insight into the availability of the labor supply within a
country's economy. Afghanistan's labor force participation rate is influenced by factors
such as repatriation, reintegration efforts, and the absence of social security3.

Skill Mismatch: Skill mismatch occurs when an individual's skills do not align with the
demands of available jobs. In Afghanistan, skill mismatch is a significant issue
contributing to unemployment and underemployment, as there is a gap between the skills
possessed by job seekers and the skills required by employers.

Decent Work: The concept of decent work emphasizes the need for productive, secure,
and fulfilling employment opportunities that provide fair wages, safe working
conditions, and respect for workers' rights. Achieving decent work is a key goal for
addressing labor market challenges in Afghanistan.

Formal Sector: The formal sector encompasses legal and regulated employment
arrangements that adhere to labor laws and regulations. This sector often offers benefits
such as social security, minimum wages, and job protections. In Afghanistan, the formal
sector is smaller compared to the informal sector.

Informal Sector: The informal sector comprises unregulated and often undocumented
economic activities, including self-employment, family-based work, and casual labor.
Many individuals in Afghanistan engage in informal sector activities due to the lack of
formal job opportunities.

1 Source: Bureau of Labor Statistics, U.S. Department of Labor

2
Source: Vansteenkiste and De Mel, UNDP/ILO, 2008
3
Source: Marc Vansteenkiste and Sajith de Mel, UNDP/ILO, 2008

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2. General Aspect: Labor Market

The labor market in Afghanistan is marked by a complex interplay of factors that shape
employment opportunities, underemployment, and unemployment rates. This intricate
landscape reflects a nation grappling with a history of conflict, demographic shifts,
economic transitions, and the ongoing process of reconstruction4. As Afghanistan seeks
to establish stable economic foundations and improve the livelihoods of its citizens,
understanding the nuances of its labor market becomes paramount. One of the foremost
challenges is the issue of youth unemployment, which remains a critical concern.
Afghanistan's youth represent a significant demographic segment with substantial
potential to contribute to the nation's development. However, barriers to employment,
including skill mismatches, limited access to education, and insufficient job
opportunities, hinder their integration into the labor market. The repercussions of high
youth unemployment are not only economic but also social, potentially contributing to
discontent and instability.
Moreover, the labor force participation rate serves as a barometer of the nation's
economic vitality. The rate's fluctuation over the years underscores the impact of factors
like repatriation of migrants, ex-combatant reintegration efforts, and the absence of a
comprehensive social security system.The high participation rate can be both a sign of
resilience, as individuals seek employment despite challenging circumstances, and a
reflection of the necessity to support extended families in a context of limited resources.
Underemployment emerges as a prevailing characteristic of Afghanistan's labor market.
With informal and casual labor often constituting the majority of available work,
underemployment transcends simplistic unemployment metrics. The absence of secure,
long-term employment opportunities compels individuals to engage in whatever work is
accessible, often leading to time-related underemployment. This phenomenon is
exacerbated by declining aid levels, which impact short-term job opportunities and
further intensify the challenge. Nevertheless, interpreting labor market statistics is not
straightforward.

Definitional differences and the ambiguity of terms like "unemployment" and

"underemployment" highlight the need for robust data collection methods. This becomes
crucial for policy formulation and informed decision-making. As Afghanistan navigates
its unique labor market landscape, policies and interventions must be tailored to the

4
Source: Ministry of Economy and the World Bank, Economic Policy and Poverty Sector, 2014

15
intricacies of its context, considering both formal and informal sectors, rural and urban
divides, and the imperative to create sustainable job opportunities

In light of these challenges, the quest to enhance the labor market's resilience and
inclusivity becomes a shared responsibility. Effective measures to address youth
unemployment, improve skill development, and create avenues for decent work can
contribute not only to economic growth but also to social cohesion and stability. By
understanding and addressing the complexities of Afghanistan's labor market, the nation
can strive towards a more prosperous and equitable future.

3. Labor market situation in Afghanistan

In January 2010, the deputy chairman of National Worker’s Union, Ghulam Ali Baryal,
bemoaned the fact that over the past ten years adequate efforts had not been made to
decrease the alarming unemployment rates: “Afghanistan’s labor laws do not meet
international standards, and the government has been unable to begin solving the
unemployment problems in the country”. Besides this criticism, the NUWA
representative added that around 70% of
Labor Market Situation in
the workforce in Afghanistan was
Afghanistan
currently unemployed, while the official
figure of unemployment is 7.9% (Poverty 5
Status) (7.1% in the original NRVA
2007/8 report). The problem of 3
unemployment is thus not only a social 2 2
and economic issue, but also a very
politicized and controversial issue, as
both data and definitions are still unclear 1980 1985 1990 1995 2000

to most of stakeholders.

Moreover, if unemployment is an important characteristic of the labor market in

Afghanistan, it is also important to stress that underemployment and working poverty
are

16
greater challenges because: i) 60% of the employed workforce are in agriculture

working in low-productivity and subsistence-type production; ii) the urban labor market
is characterized by skills mismatch and problems of job quality in both the informal and
the small formal sectors; and iii) most jobs that have been generated by the international
development assistance tend to be casual or temporary and are clearly not sustainable
without continuing aid inflows.

Last, it is worth keeping in mind that Unemployment rate (NRVA 2008) – Poverty Status
the exact definitions of “unemployed”
and “underemployed” in the context of Residence Male Female Total
Afghanistan are still unclear, and have
become highly politicized, given the Urban (9) (18) 10.5
lack of data. Such significant Rural (7) (7) 7
differences do not only come from
methodological or research limitations Total (7) (7) 7
but may also be due terminological
differences.

Table 1: Official unemployment rates

(NRVA 2008)

4. Labor force participation

The labor force participation rate is a measure of the proportion of a country’s working-
age population that engages actively in the labor market, either by working or looking
for work. It provides an indication of the relative size of the labour supply that is
available to engage in the production of goods and services. The labour force
participation rate has varied from 63.4% in 1980 to 64.6% in 2006, which is higher than
the usual rates in developed countries. According to the Poverty Status, in 2008, 66.5%
of the Afghan population falling in the official working age bracket of 16 years and over
were participating in the labour market. Such high rates may be attributable to: the
progressive return of the migrants from Pakistan and Iran after 2001; the reintegration of
ex-combatants by the joint efforts of the Afghan government and international
programmers; and

last but not least, by the absence of any social security system, which forces people to
take any type of job that is available on the market.

17
As suggested in the NRVA, lower working age population rates and higher labour force
participation is found in rural areas and among Kuchi population, as rural and nomadic
households:

1) have generally higher fertility rates and a correlative higher proportion of children;

2) “are compelled to find work for bare household survival” (NRVA).

Employment to population ratio (NRVA)

Residence Male Female Total

Urban 72 % 16% 44%

Rural 82% 50% 66%

% 80% 43% 63%

5. Employment and Unemployment: controversial, ambiguous, and equivocal

figures

According to the NRVA, the employment to-population ratio, which specifies the
proportion of a segment of the working-age population that is actually employed, was
fairly high at 62%. At the same time, there are significant differences between urban and
rural areas:

with 66% of employment-to-population ratio, it confirms that rural household members

cannot afford not to work (either through daily labor on local agricultural farms, or by
sending family members to the nearest economic center to find day-to-day unskilled
jobs); with an average gender gap of 37 points (56 points for urban areas and 32 points
for rural areas), the labor force participation of females is clearly lower. However, even
if women are more involved in basic unskilled pastoral and agricultural activities in rural
districts, it should be noted that the female employment-to-population rate in
Afghanistan is higher than the South Asian average50. Such relatively high rates,
especially in rural areas, are typical for low-income economies, where both male and
female household members need to work to provide additional income to the household.

18
Chart 1: Employment-to-population ratio (NRVA 2008)

Employment to population
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Urban Rural

male female

1. Underemployment

As suggested in the introduction, it is extremely difficult to delineate the notions of

employment and labor in Afghanistan. If labour laws are practically inapplicable, in a
country where most employers and employees only have verbal contracts and no other
agreement than moral, it is also difficult to distinguish paid from unpaid jobs, or long-
term from temporary jobs. Underemployment is thus the explanatory key to the current
state of the Afghan labour market as it faces time-related underemployment.
As for the terminology, the definition of ‘underemployment’ also raises a certain number
of questions. According to the original definition given in the NRVA, underemployment
figures are derived by adding individuals who work less than 8 hours a week to the
unemployed – the assumption being that those individuals “are available for more work
and are seeking or willing to work more hours”. But as NRVA recognizes: “This
assumption is particularly questionable in the case of many women and children-in-
education”. The NRVA, for instance, shows that the unemployment rate indeed increases
the most for urban females and individuals in rural areas. Moreover, as shown in the
NRVA, the percentage of poor is the highest for those who work between 20-39 hours.
In these regards, it is clear that 8 hours may not be the right cut-off to stress a line between
employment and underemployment.

19
Most recent studies agree that underemployment will necessarily increase with the
declining financial inflows in services or construction. According to the World Bank, as
roughly 6 to 10% of the working population has benefited from aid-financed short-term
job opportunities, declining aid levels are expected to significantly increase
underemployment throughout the country. A sharp drop in cash-for-work projects
(promoted by WFP, UNDP, USAID programs, but also many international NGOs), for
instance, will negatively impact casual labour opportunities. As stated by a World Bank
economic analyst in Kabul interviewed in December 2020, “the major impact of
declining aid will primarily be on underemployment rather than unemployment, as most
aid-financed jobs are ‘casual’ and last less than 6-months”.

Chart 2: Unemployment Rate in Afghanistan increased to 13.30 percent in 2021 from 11.70 percent in
2020.
Source: World Bank
As shown in the previous section, despite the international assistance to the Afghan
economy, the local labour market still suffers from a lack of sustainable and decent work.

20
However, the labour market situation also depends on the social and economic profile of
the considered community. This section lays the emphasis on social categories that are
more vulnerable and disadvantaged on the local labour market – and less likely than
other to access either work or decent work.

Provinces that receive funds from donors have less unemployment, but there is no
real impact on underemployment. More problematically, international aid has not
been able to create sustainable jobs: they only provide people with casual jobs.”
Bank Senior Analyst, Kabul, December 2021

6. Barriers to accessing the labor market

As shown in the previous section, despite the international assistance to the Afghan
economy, the local labor market still suffers from a lack of sustainable and decent work.
However, the labour market situation also depends on the social and economic profile of
the considered community. This section lays the emphasis on social categories that are
more vulnerable and disadvantaged on the local labour market – and less likely than
other to access either work or decent work.

7.1. Access to employment

Table 3: Formal and Informal employment channels

Socio-professional network KABUL BAGHLAN BALKH KANDAHAR KUNDUZ Total

Friends 70.7% 35.3% 53.7% 71.1% 76.2% 62.6%

Relatives 66.0% 49.7% 55.2% 59.9% 50.3% 57.9%

Through the bazaar 24.7% 44.4% 23.9% 24.3% 55.6% 32.3%

Friend of employees from the 21.3% 22.9% 30.3% 23.7% 27.2% 24.7%
company
Relatives of employees from the 19.8% 30.7% 23.9% 24.3% 23.2% 23.5%
company
Through the mosque 0.6% 2.6% 2.0% 7.2% 2.6% 2.5%

Job advertisement in a local 1.2% 0.7% 0.5% 0.0% 0.7% 0.7%

newspaper
Job advertisement in a local 1.2% 0.0% 0.0% 0.7% 0.0% 0.5%
radio/TV
Respondents 324 153 201 152 151 981

21
Figure 1: Formal and Informal employment channels

Formal and Informal employment

Friends

1% Relatives
10%0%
10% 35%
Through the bazaar
12%
Friend of employees from the
32% company
Relatives of employees from the
company

7.2. Well-Known Microfinance Institutions in The World

To gauge the existing employment channels and how people have access to job
opportunities, it is interesting to note that the data collected through an assessment of
Kabul, Baghlan, Balkh, Kandahar, and Kunduz labour markets confirmed the prevalence
of informal networks. When asked to explain how they hired their employees, most
employers said that they used the most traditional Afghan network system: friends
(62.6%) or relatives (57.9%) (Table 4). Likewise, informal networks (employees’
friends, employees’ relatives, and bazaar) are also key resources for local employers,
which confirms the key role played by the direct and indirect family network when it
comes to finding jobs. More significantly, for retailers, manufacturers, or livestock
owners (traditional or unskilled activities), it is a way to decrease salary costs by keeping
the money in the immediate family circle.

Similarly, when business owners from Badakhshan, Balkh, Kabul, Kunduz, and Takhar
were asked to specify if they had hired relatives of family members for full-time
positions, almost one-third (31%) answered positively, as shown in Table 11. Many
different reasons can explain this “nepotism”: 1) as diplomas have no practical value on
the labour market, most employers tend to favor interpersonal network as a professional
guarantee; 2) as labour regulations are almost non-existent (in practice) for small and
medium enterprises, it becomes a way to hire people at a lower cost and keep the money
in the family circle

22
Table 4: Percentage of relatives among full-time employees
Figure 2: relatives among full-time employees
Provinces Percentage Frequency
40.00% 1.2

35.00% Badakhshan 27.6% 173

1
30.00%

25.00%
0.8 Balkh 35.9% 201

20.00% 0.6
Kabul 28.4% 324
15.00%
0.4
10.00% Kunduz 34.1% 151
0.2
5.00%
Takhar 31.1% 101
0.00% 0

Total 31.0% 950

Source: Samuel Hall, Economic Assessment and Labour Market Survey of Balkh, Baghlan,
Kandahar, and Kunduz, 2011

7.3. Youth Labour Market

With the labour force increasing by more than 400,000 per year, Afghanistan has an
increasing need to generate employment opportunities for the new labour market
entrants. To better assess the role played by 15- to 24-year-old employees, male and
female employees working in Balkh, Baghlan, Kabul, Kandahar, and Kunduz provinces
(urban and peri-urban centers) were asked to specify the positions generally occupied by
young employees within the company. As shown in the table below, young employees
are generally bound to occupy temporary and precarious positions of “apprentices” or
“trainees” (63.8%) in a labour market with no contractual or regulatory obligation for
employers.

Table 5: Positions occupied by young employees (15-24)

What positions do young employees occupy within your company?
Positions KABUL BAGHLAN BALKH KANDAHAR KUNDUZ Total
Apprenticeship (on the 76.2% 66.0% 61.7% 48.7% 53.0% 63.8%
job training)
Day Labourers 15.4% 22.9% 18.9% 17.1% 15.9% 17.6%
None 8.0% 2.6% 1.0% 25.7% 21.9% 10.6%
Junior Management 0.3% 4.6% 3.0% 0.0% 0.0% 1.4%
Office Work 0.0% 0.7% 1.0% 0.7% 0.0% 0.4%

23
Figure 3: Positions occupied by young employees (15-24)

Office Work

Junior Management

None

Day Labourers

Apprenticeship (on the job training)

0% 20% 40% 60% 80% 100%

KABUL BAGHLAN BALKH KANDAHAR KUNDUZ Total

Source: Samuel Hall, Economic Assessment and Labour Market Survey of Balkh, Baghlan,
Kandahar, and Kunduz, 2011

Following the same logic, when asked to specify the problems faced by young employees
on the labour market, a significant majority of the surveyed employees prioritized the
lack of job opportunities on the local market (59.6%) and other labour market related
parameters (experience and skills at, respectively, 36.6% and 33.1% - but also the wage
gap with other workers, at 35.6%). More surprisingly, they also mentioned a socio-
cultural determining factor: family’s reluctance (at 55.5%) to let young adults – and
especially young women – work outside their house: “It’s good to teach [girls] English,
accounting, or tailoring; but if you do not convince their families to let them, find a job,
it is unfortunately useless. Training and capacity building program providers should
work with families and communities to change mentalities” (NGO Director, Herat).

24
 Figure 4: What are the main problems young employees have to face on the labour market

WHAT ARE THE MAIN PROBLEMS YOUNG

EMPLOYEES HAVE TO FACE ON THE LABOUR
MARKET?
Total KUNDUZ KANDAHAR BALKH BAGHLAN KABUL

Lack of contacts to find a job

Lack of qualifications (education)

Low salary

Lack of experience

Family’s hostility

Lack of opportunities

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

2. Women participation to the labour market

Women in Afghanistan have long suffered from a lack of education, skills, security and
cultural barriers, all of which put them in a disadvantaged position in the labour market.
Women earn on average 49% of the wages paid to men in non-farm occupations. 5
Another manifestation of the disadvantaged position of women is the strong gender
differentiation in employment status. Significantly, most unpaid family workers are

5
UNIFEM Afghanistan Fact Sheet 2008, available at http://afghanistan.unifem.org/media/pubs/08/factsheet.html

25
female (78 per cent) while day labourers, salaried workers, employers and own-account
workers are male. Because mobility outside the home is limited for cultural reasons,
women in provinces and rural areas are primarily involved in home-based income
generating activities like carpet weaving, sewing, tailoring, agricultural work and taking
care of livestock and selling dairy products.

Labour force participation is generally lower for females than for males. In the Afghan
economy this gender gap is more significant – albeit lower than in Sri Lanka, Pakistan,
and India (see subsection 2.3). Survey data confirms a relatively low female labour force
participation – especially in urban areas, where the gap between male and female
participants reaches 60 points according to the NRVA 2007/2008, and 80 points in the
four urban areas of the Mercy Corps survey. However, this gap tends to be smaller in
rural or Kuchi populations (respectively 34 and 28 points), due to the stronger female
engagement in agricultural and pastoral activities (see the section 2.3 on employment-
to-population ratio). Table 15 shows that the vast majority of workers are men,
particularly in Baghlan and Kandahar.

Table 6: Quantitative Sample Description of the Mercy Corps survey – November 2011 (by gender)

Positions KABUL BAGHLAN BALKH KANDAHAR KUNDUZ Total

Apprenticeships 70.7% 68.2% 72.1% 52.9% 58.4% 65.9%

(on the job
training)
Day Labourers 11.4% 23.6% 22.1% 18.6% 17.5% 17.6%
None 13.5% 2.7% 1.2% 27.9% 24.1% 12.0%

Junior 4.4% 4.7% 3.5% 0.0% 0.0% 2.9%

Management

Office Work 0.0% 0.7% 1.2% 0.7% 0.0% 0.4%

Respondents 297 148 172 140 137 894

26
 Figure 5: Quantitative Sample Description of the Mercy Corps survey – November 2011
(by gender)

Total

0%
3%
12%

Apprenticeships (on the job training)

Day Labourers
18% None
Junior Management
67% Office Work

As shown in the table 15 below, women do not only work less often than men, but those
who do also work for less hours and in less secure jobs: all women working in the
surveyed companies were occupying basic and unskilled positions of apprentice or day
labourers and only 2.7% of them had managerial positions.

Table 7: Positions occupied by women

Employers Employees Total

Provinces Female Male Female Male Female Male Frequency

BAGHLAN 6.5% 93.5% 6.7% 93.3% 6.6% 93.4% 303
BALKH 11.9% 88.1% 10.3% 89.7% 11.1% 88.9% 404
KANDAHAR 5.9% 94.1% 5.9% 94.1% 5.9% 94.1% 304

KUNDUZ 14.6% 85.4% 14.6% 85.4% 14.6% 85.4% 302

Total 9.9% 90.1% 9.5% 90.5% 9.7% 90.3% 1,313

Source: Samuel Hall, Economic Assessment and Labour Market Survey of Balkh, Baghlan,
Kandahar, and Kunduz, 2011

27
 Figure 6: Positions occupied by female employers

Employers
Female Male

100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
BAGHLAN BALKH KANDAHAR KUNDUZ Total

Figure 7: Positions occupied by female employers

Employees
Female Male

100.00%

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
BAGHLAN BALKH KANDAHAR KUNDUZ Total

Source: Samuel Hall, Economic Assessment and Labour Market Survey of Balkh, Baghlan,
Kandahar, and Kunduz, 2011

28
Underlying causes, as shown in the table 16 below, are of course cultural (role played by
women care-taking responsibility for children, elderly and the disabled), lack of job
opportunities (65%), lack of experience (57%), and low educational attainment (32%).
Last, a major obstacle seems underestimated by most quantitative surveys but is
systematically mentioned during focus groups – as highlighted in the box below: the
hostility of most families to the participation of their female members to the labour
market.

Table 9: The main problems female employees have to face on the labor market
What are the main problems female employees have to face on the labor market?
Main Problems KABUL BAGHLAN BALKH KANDAHAR KUNDUZ Total
Lack of opportunities 66.0% 66.0% 68.7% 57.2% 65.6% 65.1%
Lack of experience 48.1% 54.2% 59.2% 66.4% 67.5% 57.2%
Family’s hostility 60.2% 52.3% 50.2% 65.1% 36.4% 54.0%
Low Salary 45.7% 41.8% 35.3% 48.0% 35.8% 41.8%
Lack of qualifications (education) 34.6% 40.5% 34.3% 30.3% 13.9% 31.6%
Lack of contacts to find a job 12.3% 17.6% 16.4% 13.8% 22.5% 15.8%
Respondents 324 153 201 152 151 981

Source: Samuel Hall, Economic Assessment and Labour Market Survey of Balkh, Baghlan, Kandahar,
and Kunduz, 2011
Dialogue with women in Kunduz (October 2011) In Kunduz,
women are reported to work in manual or labouring work, which often involves cleaning and
cooking positions within businesses. No women were reported to be working on office work or junior
management. Opportunities for women in the districts, according to interviews and discussions in
Kunduz, are based primarily around agriculture and include fish farming, wool processing, beekeeping,
poultry farming and small dairy outputs, such as milk, butter and cream production. In both the districts
and Kunduz city, women are also very active in handicrafts, particularly clothes making, embroidery
and carpet making. Women face unique challenges, unlike other segments of the labour market, as
family permission is often required to leave the home as articulated by Hayderi, a focus group
participant in Kunduz City, ‘the big obstacle for women to work outdoors is the violent action of men
who do not let the women to work.’ Women not only face threats from within the home, but also by
anti-government actors, as described by Rana Jan, another participant, ‘the basic obstacle for women
who can not work is that the security situation is not good, there are threats and warnings from the
Taliban side that stick (notices) on people doors that any women who want to work will be killed.’ One
sixth of the 150 surveyed employers and one fifth of the 150 surveyed employees also stated that their
sector was not appropriate for women, which may be the result of the use of manual labour or a
traditionally male dominant environment. For the director of DoWA in Kunduz, however, ‘women are
able to do anything,’ from working in agriculture and livestock in rural areas to ‘carpentry, mobile and
TV repairing as well as photography’ in urban areas. Handicrafts, carpet making and embroidery,
therefore, represent an apparent compromise as the work is generally undertaken from home.
Approximately 18% of respondents also stated that their sector was ‘not appropriate’ for women, which
is traditionally associated with manual labour and trades or environments that are considered the
preserve of males only. Source: Samuel Hall, Labour Market Survey in Baghlan, Balkh, Kandahar, and
Kunduz (Mercy Corps, Nov. 2011)

29
3. Child and Bonded Labour

Buried in Bricks: Rapid Assessment of Bonded Labour in Afghan Brick Kilns, a recent
survey carried out between August and October 2011, aimed to provide an accurate
picture of bonded and child labour in brick kilns in two provinces of Afghanistan –
Nangarhar and Kabul. The survey found that 56 per cent of brick makers in the Afghan
kilns are children under the age of 18 (58 per cent boys and 42 per cent girls), and 47
per cent are 14 or younger (33 per cent boys and 14 per cent girls). Most children began
working between seven and eight years old, and by the age of nine almost 80 per cent
of children are working. Only 15 per cent of the children attended school, the main
reason for not doing so being the need to help their families. Consequently they do not
acquire the skills necessary to break out of bonded labour, and, with the intergenerational
transference of debt, children have no choice but to follow in the footsteps of their
parents. Both adult and child labourers work more than 70 hours a week, in very poor
conditions. Average daily wages are between 297 and 407 Afghanis (US$6.23-8.54) for
an adult and 170-278 Afghanis (US$3.57-5.82) for a child.

4. Refugees, returnees, and internally displaced persons (IDPs)

Since 2002, over 5 million Afghan refugees returned ‘home’ causing increased pressure
on local absorption capacities. Central to the migration experience of different migration
groups – whether refugees/returnees, IDPs or labour migrants – is the question of access
to employment. At a time of record lows in the repatriation of refugees, increased
internal displacement and irregular cross-border migration, access to the labour market
has become one of the central drivers of mobility.

1. Early waves of refugee return (2002‐2005) – Early returnees were motivated by a

high sense of longing but also a very practical sense of entrepreneurship among
returnees who expected that the presence of the aid community would create
favourable dynamics in the overall economic environment. They matched these
expectations with the transfer of savings from exile, to help them start up new
business activities. Most returnees expressed difficulties integrating in the Afghan
labour market6 but were able to find a job, albeit in less preferred jobs despite their
real skills, often acquired during exile in Iran and Pakistan. However, the vast
majority of returnees found themselves in jobless/casual labour positions and a
difficult reintegration process.
2. Later waves of refugee return – A research study conducted for NRC in 2009
highlighted the vulnerable economic situation of urban returnee households. The

6
ILO/UNHCR, Integration of Returnees in the Afghan Labour Market, 2006.
30
 survey results highlight various types of economic vulnerability: lack of savings
(80.5%), of access to loans (52.6%), of remittances (96.2%) or of multiple income
sources (37.2%). Overall, and in comparison, with their economic situation a year
earlier, 45.1% of respondents indicate their economic situation to have remained
stable (albeit precarious), while 38% consider their situation to have worsened and
26.9% improved. On average, family members each survive on less than $1 a day.
Last, it should be noted that one third of the active labour force surveyed falls under
the category of unstable and unskilled labour (seasonal daily labour in the agriculture
or construction sectors).
3. Internally Displaced Persons (IDPs) – A joint research study by the World Bank
and UNHCR7 illustrates the negative economic situation of IDPs compared to the
urban poor. IDP household heads have substantially lower literacy rates and levels of
education, directly impacting IDPs’ labor market outcomes. IDPs’ employment
opportunities are primarily in construction, and low quality and unsafe jobs. Focusing
on male respondents only, the study reveals that, unlike IDPs, the broader category
of urban poor work in all sectors of the economy. For example, 12.8% of male heads
of urban poor households work in the construction sector (compared with 50.6% of
IDPs). Among the urban poor, the majority work in retail trade (26.2%), other
services (14.4 %), and, most noticeably, in public sector jobs (11.9% versus 0.6% of
IDPs). Sectoral differences in employment between IDPs and the urban poor are
reflected also in the occupation structure. IDP male workers are mainly day laborer’s
(68 per cent), followed by self-employment and private sector salaried jobs (23 and
6 per cent, respectively). In comparison, for the urban poor, self-employment is the
most prevalent occupation (49 per cent) followed by daily labour (25 per cent) and
public sector salaried jobs (17 per cent). The study further suggests that such labour
market disadvantages increase IDPs’ vulnerability to poverty.

Newly displaced households – besides possibly lacking skills to benefit from the
urban labour market – are less likely to have other income sources, such as loans and
credit, and hence are more vulnerable and in need of external assistance.

4. Labour migrants – Labour migration is unlikely to end, as it is a key livelihoods

strategy for Afghans. They perceive higher employment opportunities and more
advantageous wage differentials in Iran than in Afghanistan. Most of the migrants are
adult men traveling alone, either the heads of households or the sons of the household.
The main instigator for this migration, across different profiles, is the difficulty of
families to meet basic livelihood needs.

7
World Bank / UNHCR, Research Study on IDPs in urban settings – Afghanistan, 2011.
31
 Migration becomes a way to provide for immediate needs, to diversify and to ease
the strain put on family income. The main pull factors and incentives to migrate to
Iran are:

• The expected wage levels, on average four times higher in Iran,

• The opportunity to acquire new skills from migration,
• The high level of remittances,
• The demands for labour of the informal labour market in Iran.

Beyond the expected wage gains is the opportunity to acquire new marketable skills
from migration (case study below). These migrant workers benefit from a specific
training in skills that is not readily available for them in Afghanistan.

Case study of an Afghan labour migrant to Iran

Reza, a 26-year-old single man from Herat, spent 12 years living and working
in Iran – returning once voluntarily in 1999, then deported by the Iranian
authorities in 2008. “My wage greatly increased over time. I learned to work
as a mason and my daily wage went from 2,000 to 10,000 toman. I spent 30%
of my income and sent back the remaining 70% to my family in Afghanistan.”
He now works for about 2 weeks every month as a daily construction worker.
He never got married because he could not afford it. The experience of prison
and of the treatment by the Iranian authorities left a big mark on him. He now
says, “I will not go back to Iran, it has gotten too difficult. I prefer to stay
here, even if I have to beg for money. However, being in exile was positive
because it allowed my family to live more comfortably.”
Samuel Hall Consulting, Research conducted in Herat in December 2011 for the
ILO

5. Extremely Marginalized communities

If nomadic Kuchi communities, which account for 1.6 million people in the country
according to the NRVA, are often considered as socially and economically marginalized,
the Jogi, Jat, Gorbat and Chori Frosh communities are the invisible poor among the poor.
A rough estimate situates them at 30,000 – mostly in the cities of Jalalabad (Jat), Mazar-
e-Sharif (Jogi and Chori-Frosh), Kabul (Jogi and Jat), Kunduz (Jogi and Chori Frosh),
and Herat (Gorbat). A survey conducted in Mazar-e-Sharif and Kabu showed that these
communities suffer from barriers constraining access to education and employment. Jogi
and non-Jogi respondents were asked to identify their main sources of income, as listed
in Table 10.

32
Table 10: Income generating activities of extremely marginalized communities, 2011.

Source: Samuel Hall Consulting (2011), Jogi and Chori Frosh out-of-school children

Figure 8/9: Income generating activities of extremely marginalized communities

The specialization of Jogi JOGI AND CHORI FROSH

Begging
communities in begging is very Construction (daily labour)
clear as revenues from begging Street vending
contribute 38.4% to their wood sale
income. In contrast, begging is
not practiced by any of the 0% 5%

surveyed non-Jogi households.

Empirical observations showed 31%
that begging activities are almost 24%

exclusively performed by Jogi

women and children.
Interestingly, daily unskilled
labor in the construction sector 1%
1%
1%
appears as an important source of 2%
revenue both for Jogi and Chori 2%
3%
Frosh communities (27.6%) and 4% 22%
non-Jogi communities, for which 4%

it is the primary income-

33
generating activity (28.5%). This sector provides employment for Jogi and Chori Frosh
men and brings an important share of the household revenues. Jogi and Chori Frosh men
appear to have the same occupations than non-Jogi men living in the same areas, mostly
in the construction and wood sectors (respectively 4.4 and 11.5%). Finally, the main
income-generating activities to which Jogi and Chori Frosh have access are exclusively

NON-JOGI FROM NEIGHBORING COMMUNITIES

Begging Construction (daily labour) Street vending
wood sale huosehold workers car washing
transportaion, storage fortune telling administraion, governoment
Construction (skilled labour) Car repair sewing, tailoring
electicity, plumbing other

0%
14%

2%
31%
2%

3%

9%

7%

10%
0%

9%
0% 13%

unskilled occupations providing only low-income perspectives. More importantly, they

show that the Jogi and Chori Frosh are confined in an economic model of subsistence.
None of these income-generating activities is sufficient to offer perspectives of
development to the communities. In this context, they research other paths to break the
reproduction of the cycle of poverty from generation to generation. In their discourse,
education is the first of them.
34
The specialization of Jogi communities in begging is very clear as revenues from
begging contribute 38.4% to their income. In contrast, begging is not practiced by any
of the surveyed non-Jogi households. Empirical observations showed that begging
activities are almost exclusively performed by Jogi women and children. Interestingly,
daily unskilled labour in the construction sector appears as an important source of
revenue both for Jogi and Chori Frosh communities (27.6%) and non-Jogi communities,
for which it is the primary income-generating activity (28.5%). This sector provides
employment for Jogi and Chori Frosh men and brings an important share of the
household revenues. Jogi and Chori Frosh men appear to have the same occupations
than non-Jogi men living in the same areas, mostly in the construction and wood sectors
(respectively 4.4 and 11.5%). Finally, the main income-generating activities to which
Jogi and Chori Frosh have access are exclusively unskilled occupations providing only
low-income perspectives. More importantly, they show that the Jogi and Chori Frosh are
confined in an economic model of subsistence. None of these income-generating
activities is sufficient to offer perspectives of development to the communities. In this
context, they research other paths to break the reproduction of the cycle of poverty from
generation to generation. In their discourse, education is the first of them.

35
 Chapter 2 Youth Unemployment: Causes and Implications

This chapter delves deep into the pressing issue of youth unemployment in Afghanistan,
aiming to unravel the complex web of factors that contribute to this challenge and to
elucidate the wide-ranging socio-economic consequences it engenders. As Afghanistan's
youth population continues to grow and the labor market undergoes changes,
understanding the root causes and implications of youth unemployment becomes
paramount for effective policy-making and intervention.

1. Factors Contributing to Youth Unemployment:

The factors driving youth unemployment in Afghanistan are multifaceted and

interlinked. Firstly, the demographic shifts within the population are pivotal.
Afghanistan's youthful population is on the rise, with increasing numbers of young
individuals entering the labor market. This demographic surge escalates the competition
for limited job opportunities, intensifying the challenge of youth unemployment.

The persistent conflict and political instability within the country further compound this
issue. The turbulent environment discourages investment and disrupts economic
activities, leading to a lack of job creation and economic growth. As the economy
struggles to diversify beyond its heavy reliance on agriculture and extractive industries,
the inability to generate diverse employment options constrains the absorption of young
job seekers into various sectors.

Moreover, the gender disparities prevalent in Afghan society exacerbate the problem.
Gender-based restrictions and societal norms disproportionately affect young women's
access to education and employment opportunities, thereby contributing to their
unemployment and limiting the overall workforce participation of women.

6. Demographic Shifts and Population Growth:

Afghanistan's population structure has a significant influence on its youth

unemployment rate. With approximately 63% of the population below the age of 25, the
country is experiencing a substantial demographic youth bulge. This means that a large
number of young individuals are entering the labor market each year, creating a
heightened demand for jobs.

36
7. Conflict and Political Instability:
The ongoing conflict and political instability in Afghanistan have profound effects on its
economy and labor market. These conditions deter foreign investments, disrupt local
businesses, and hinder economic growth, subsequently reducing the number of available
job opportunities.

Statistical Data: The Global Peace Index ranks Afghanistan consistently as one of the least
peaceful countries, reflecting the pervasive nature of conflict within the nation.

Chart 2: Demographic Shifts and Population Growth in 2020

Population Growth in 2020

65+

25 - 64

14 -25

0 - 14

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%

According to the World Bank, the political instability and security concerns have
deterred foreign direct investment, with net FDI inflows remaining volatile over the
years.

8. Economic Diversification and Job Creation:

The reliance on agriculture and extractive industries in Afghanistan limits the scope of
job creation. The lack of diversification prevents the economy from generating a wide
range of employment opportunities, making it challenging to absorb the growing youth
population into various sectors.

Statistical Data: Agriculture accounts for a significant portion of Afghanistan's GDP, but
it employs a large share of the labor force in low-productivity subsistence farming.
37
The mining sector, though potentially lucrative, has faced obstacles due to security
concerns, lack of infrastructure, and regulatory issues.

9. Gender Disparities and Societal Norms:

Gender-based disparities and societal norms are key factors contributing to youth
unemployment, particularly among young women. Traditional views on women's roles
often limit their access to education and employment opportunities, constraining their
ability to participate in the labor force.

Statistical Data: According to the United Nations, Afghanistan has one of the lowest
female labor force participation rates globally, with only around 19% of women
participating in the workforce in 2020.

Cultural and social barriers, including early marriage and restricted mobility, contribute
to limiting women's engagement in economic activities.

10.Skill Mismatch and Education Challenges

The education system's role in exacerbating youth unemployment cannot be overlooked.

The disconnect between education and industry needs results in a skill mismatch that
leaves young graduates ill-prepared for the demands of the job market. Traditional
education methods emphasizing rote learning and outdated curricula fail to equip
students with practical skills that align with employers' expectations.

The lack of accessible technical and vocational training further compounds the
challenge. Many youths lack the opportunity to acquire specialized skills that are
increasingly in demand in various sectors. Additionally, the deficiency in soft skills, such
as effective communication and problem-solving abilities, impedes the transition from
education to employment.

11.Socio-Economic Consequences of Youth Unemployment

The ramifications of youth unemployment extend far beyond the individual level,
significantly impacting Afghan society as a whole. The social implications are profound,
with high youth unemployment rates potentially contributing to social unrest and
political instability. Disillusioned and frustrated youth, devoid of viable employment
opportunities, can become vulnerable to radicalization and extremist ideologies.
Economically, the country faces a loss of valuable human capital and productivity. Youth
unemployment results in untapped potential and suppressed economic growth. The
dependence on the informal economy, a consequence of limited formal job
opportunities, further hampers economic progress by lacking regulation and proper
38
social protection mechanisms.The phenomenon of brain drains, where skilled
individuals seek opportunities abroad, exacerbates the challenge. This not only leads to
a loss of expertise within the country but also perpetuates a cycle of limited progress and
development.

Chapter two underscores the complex tapestry of factors driving youth unemployment
in Afghanistan and the far-reaching consequences it entails. By addressing the root
causes and understanding the implications, policymakers, researchers, and stakeholders
can devise targeted interventions that encompass education reform, skill development,
and policy initiatives. Effectively addressing youth unemployment holds the potential to
harness the energy and potential of Afghanistan's youth, steering the nation toward
sustainable economic and social development.

39
 Chapter Three Sectors, companies and employers

According to the NRVA, “Afghanistan’s labour market has the typical characteristics of
a less developed economy: it is dominated by the agricultural sector and performs poorly
in providing decent work, reflected in productive employment, secure income, gender
equality and social protection”8. Such a statement highlights a reality that is too often
set aside by policy makers and development actors: around 77% of Afghans live in rural
areas and rural poverty accounts for 84% of poverty nationwide – with household
income generated almost exclusively through agricultural, livestock, and agribusiness
activities. After a rapid overview of the key macroeconomic indicators, this section will
draw a broad picture of the local market by focusing on the demand side of the labour
market and capturing the perception of job providers on both labour and employment
markets.

1. Macroeconomic Indicators

Over the past decade, the Afghan economy has grown strongly, which has been driven
by “above-average agricultural production, strong growth in construction and
transportation, and security spending enabled by large aid flows, especially in
FY2009/10”. As shown in the Figure 1 below, the GDP has been multiplied by 4.2
between 2002/2003 and 2011/2012, frequently hitting double-digit annual growth rates
(+21% in FY2009/2010). According to the World Bank, the real GDP growth rate
reached a relatively more modest 8.4% in FY2010/2011.

Figure 11: Afghan GDP 2002-2012 (in thousand US$)

Source: WB -
Afghanistan
Economic
Update,
October 2011

8
NRVA 2007/8, p.25.
40
One of the main characteristics of the exceptional Afghan growth is the role played by
the services sector, which has increased from 38% of the Afghan GDP in 2002 to 51%
in 2011, as highlighted in the Figure 2 below. Such a significant increase is mainly due
to the growth of the communications, transport, and construction subsectors – which
have strongly benefited from the international inflows over the past decade. In the
meantime, the share of the agriculture in the GDP has progressively decreased from 38%
to 23%.

Chart 3: Afghan GDP 2002-2011 (breakdown per sector)

AFGHAN GDP 2002-2011 (BREAKDOWN PER

SECTOR)
service indusury agriculture

22% 23%
28% 27% 27% 27%
30%
38% 37%

30% 26%
26% 26%
28% 31%
29%

24% 24%

51%
48% 47% 47%
43% 41% 42%
38% 39%

2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2019/2010 2010/2011

41
12.Sectors of employment

The table below, extracted from the Poverty Status in Afghanistan, puts into perspective
the key sectors of employment at both national and provincial levels: overall, it clearly
confirms the predominant economic role played by the agricultural sector (59.1% of
employment), followed by services (24.6%), and manufacturing (12.5%) (Table 1) 9 .
According to the NRVA, 55% of households are engaged in farming and 68% have any
type of livestock, which clearly emphasizes that “agricultural activities are the main
livelihood strategies for the Afghan population”.

Table 11: Key sectors of employment in Afghanistan

22

Economic Data from the Poverty Status in Afghanistan (including urban and rural
districts)
National
Agriculture 59.1%
Manufacturing, construction, mining, and quarrying 12.5%
Services 24.6%
Public administration 3.9%

Source: Poverty Status 2010

As stated in the introduction, informal businesses dominate the economy. According to

a recent study conducted in Balkh, Kunduz, Badakhshan, and Takhar provinces, if 94%
of the surveyed companies know that a company has to be officially registered to
operate, only 10% of the surveyed companies were registered with the AISA, while 9%
reported being registered with the Ministries of Economy or Commerce.

In rural areas, the weight of agriculture is much higher than in urban centers; a key
explanation is that only 10% of urban households have access to land (almost 70% for
rural households). Symmetrically, in urban areas, the sectors of manufacture and
services are important job providers.

9
It should be noted that some economic sub-sectors (like “Construction”, which accounts for a significant proportion of casual and daily jobs) are
included either in the “Manufacturing” sector (Poverty Status) or under the label “Services” (Investment Climate Survey). As such, it is somewhat
difficult to draw any sectoral comparison from those different sources.
42
13.Agriculture: below the poverty line… but not impacted by the transition

More than 77% of Afghans live in rural areas, where agriculture continues to be the main
economic activity. At the national level, as almost 60% of the workforce is employed in
the agricultural sector and as about 80% of the Afghan households mostly or partly
depend on agriculture related income. Agriculture, agri-business, and livestock sectors,
therefore, play a major role in driving both the labour and economic markets. The formal
agriculture sector recovered from the previous year’s drought stabilizing at around 36%
of GDP (World Bank, World Development Indicators 2007). However, unaccounted for
in official statistics and larger in size than the formal agricultural sector, the illegal opium
sector accounted for an estimated additional 9% of GDP in 2011, according to the United
Nations Office on Drugs and Crime (UNODC.

The agricultural sector is extremely dependent on: 1) regional (Pakistan) and local
market price volatility, and; 2) weather conditions (drought, spring floods).
Consequently, as the network of local agricultural producers and retailers is strongly
affected by price and climatic variabilities, the sector is poorly resilient to shocks. It is,
therefore, difficult to develop and implement any long-term economic plan at both
national or local levels. However, paradoxically, if rural areas, which almost exclusively
rely on agriculture, are vulnerable to price and weather variables, they may be better
insulated from declines in international inflows (which often prioritize other sectors, like
services or construction). At the urban and peri-urban levels, “only” 11.6% of the
companies surveyed in the four peri-urban and urban areas of Badakhshan, Balkh,
Kunduz, and Takhar provinces traded either local or imported agricultural products; it
confirms the prevalence of other sectors in urban areas – manufacture and services.

“The illicit agricultural labour market offers an income that is 6

times higher than the licit agricultural labour: $3-4 a day versus $20
to 30. In economic terms, the weight of illicit labour is very
important in this sector and benefits many households (despite
other harmful effects)”.

FAO Representative, Kabul, January 2012

The average size of landholdings is small, however, and as a result, agriculture is rarely
the main source of food or household income. The main staple is wheat, which is grown
in both irrigated and rain‐fed areas. Dependency on weather conditions, especially
timely rainfall, accounts for the fluctuations in wheat production . The US Department
of Agriculture had forecasted a 2010–11 wheat production in Afghanistan of 3.7 million
43
tons, 13 % below 2009's record level, but 18 % above average. In the current year, the
harvest is down again, due to a drought effecting 14 provinces, and food shortages are
expected for the coming months.

More generally, a competitive agricultural and agribusiness development cannot take

place without the simultaneous development of supporting supply-chain services –
particularly transportation to avoid major post-harvest losses, logistics, electricity, and
irrigation services.

14.Services: an artificial bubble, strongly impacted by the transition

The recent Afghan economic growth has been largely driven by the services sector
(namely transport and communications), which have been propelled by the large aid
inflows. Overall, inflow-induced private consumption has fueled economic growth and
strongly contributed to increase the share of services in the GDP – from 38% in
FY2002/2003 to 51% in FY2010/2011, as shown in chart 2. According to the World
Bank, the services sector will continue to account for about half of economic growth in
2011/2012, mainly “fueled by the growth in the telecommunications sector. In addition,
donor funding and development projects will continue to drive the demand for
transportation and distribution services”. Mobile telephone subscriptions were
estimated to be about 13 million in 2010 and are projected to reach 19 million by 2012 .
Aside from telecommunications, the most dynamic services subsectors are transport,
wholesale, retail trade, as well as finance and insurance.

However, services will probably suffer the most from the progressive reduction of
international aid, as their growth is significantly and artificially led by international
financial inflows. More specifically, the transport sector, which has strongly benefitted
from the presence of international military troops, is expected to shrink, as the demand
for fuel, equipment, and food transportation by road will drastically decrease: “The
transport sector will be badly hit by the on-going transition. As for the other services
subsectors, the future is still uncertain, even if their heavy reliance on imports is likely
to negatively impact their activity and lead to mass layoff and worsening employment
situation, with more underemployment and lower wages”.

Since 2002, the growth of the construction sector has strongly benefited from
international contracts or sub-contracts: larger (and generally foreign-owned) firms have
been awarded public contracts, which have often been subcontracted to smaller Afghan
companies. With the progressive reduction of international aid, both large international
44
and small local construction companies are thus likely to be negatively impacted. By
contrast, and as suggested in the next sub-section, experts consider that the development
of the mining sector – and the huge infrastructure investments that will need to be
undertaken to support the mining industry – is likely to benefit the construction sector
(or allow a smooth redeployment of many construction workers). Such a positive
scenario, however, will of course depend on the development of the mining industry,
which is still unpredictable in today’s environment (see 1.2.4).

15.Mining: promising in theory, with many practical sine-qua-non

Most experts agree that the mining industry is today the most (if not the only) promising
driver of income growth and industrialization process in Afghanistan. In an optimistic
scenario, the vast deposits of iron ore, gas, oil, copper, gold, lithium and other minerals
may lure capital and technology from around the world (and recently from China and
Canada). Estimates by the Pentagon and U.S. geologists consider that the country
harbors as much as 1 trillion dollars in earth minerals; likewise, the government forecasts
mining will represent 25% of gross domestic product by 2016 and 50% by 2024.

The mining project at Hajigak is, by a wide margin, one of the largest investments in the
country’s history and will – together with the large copper mine located in Aynak - play
a leading role in the economy in years to come. Current projections estimate that the two
mines could generate up to US$342 million annually in government revenue until 2015,
and up to US$704 million annually in 2016 and beyond. In the medium term the mining
sector could contribute up to 5% of annual growth. However, large investments
(US$6US$15billion) in mining and infrastructure development are needed in the coming
years to exploit the sector’s potential.

Consequently, such investments have the potential to create both direct and indirect jobs,
which will depend on: 1) the continuation of high metal prices combined with the
relatively high sector taxes, and 2) large infrastructure needs (in rail, roads, and power),
as suggested in a recent World Bank report:

“The central quantitative result [of the study] is that the 2011-40 average annual direct impact
on national income would be about US$745 million (or 8.1 per cent of 2008 GNI), not including
linkage or multiplier effects. When procurement to local suppliers is included, this figure rises to
US$ 1.04 billion or 11.3 per cent of 2008 GNI. […] While annual direct employment in the mines
is calculated to only increase by 6,400, if the fiscal revenues are used judiciously to develop
infrastructure and linkage industries, this number could be several times higher due to indirect
and induced employment.”

45
However, for the mining industry to be a sustainable driver of growth and employment,
four sines qua non conditions should be met:

A security situation allowing mining companies and linkage industries to safely operate
in Anak, Hajigak, and the future extraction areas; Long-term political, commercial and
trade agreements with neighboring countries allowing mining companies to export the
minerals;

A fair and coordinated management of government expenditures as well as a

socioeconomic governance taking advantage of the several externalities generated by
the mining industry and benefitting not only to a few political or economic facilitators,
but first and foremost to the whole Afghan economy;

The provision of low-cost and competitive supply-chain services – particularly

transportation (e.g., railways), logistics, electricity and irrigation.

Last, a good local supply of the basic and advanced skills, goods and services requested
by the mining industry contributing to the actual development and capacity building of
the Afghan skilled workforce.

16.An Overview of Afghan Enterprises

Despite attempts to simplify business development, the country was still ranked 167th
in the 2011 Ease of Doing Business rankings. In addition to the problems associated with
security and corruption, the obstacles confronting companies include expensive and
unreliable power, the absence of a proper land registration system, weak legal structures,
a lack of a pool of skilled labour, and inappropriate business development services. The
following subsection provides a rapid overview of Afghan firms and businesses.

In addition to the Doing Business Survey, the 2009 Integrated Business Enterprise
Survey draws a representative picture of the situation of local non-agricultural
enterprises and companies operating in Afghanistan. As reflected in the chart below, an
estimated 402,000 establishments were operating at the time of the survey in the services
and industry sector. Since some segments/areas were not covered, the actual number of
establishments is estimated to be nearly 530,000. Trade and repair were the most
dominant activity among the 12 non-agricultural activities categorized, with nearly
117,000 establishments (29%). Others include manufacturing (22%) accommodation
and food (10%), and ‘other’ services (27%).

46
Chart 4/5: Estimate number of establishments and Distribution

47
 Distribution
120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%

Distribution

The recent GIZ Commercial Law Needs Assessment (2011) and Mercy Corps Labour
Market Survey in Baghlan, Balkh, Kandahar, and Kunduz (2011) show that a large
majority (59%) of the surveyed urban and peri-urban companies has less than 5 full-time
employees – in Badakhshan, Baghlan, Balkh, Kabul, Kandahar, Kunduz, Takhar . Both
studies highlight the

fact that Afghan companies are mostly composed of small economic structures, with
basic pyramidal hierarchies and no HR, finance, or legal departments; they also suggest
that companies use temporary employees and daily labourer as recurrent resources.
Overall, micro- and small companies account for 92% of the sample – most of them
being family-owned companies with less than 5 employees and no real financial or
organizational structure. Symmetrically, companies with more than 20 employees
account for 8% (including less than 1% of large firms with more than 100 employees).
The World Bank construction survey confirmed the small size of many firms in the
construction sector: most of them had less than 50 employees and about one-quarter had
less than 10 employees.

A comparison with the Afghanistan Investment Climate Survey 2008 is not fully relevant
here, as methodological preference had been given to the larger companies from the
AISA database. However, as most surveys primarily target medium or large companies
and use quota in the sampling methodologies, it shows that most labour or business
surveys are not representative of the actual economic and employment market: the share
of micro- or small sized companies is of course higher than 74% and the proportion of
large companies is probably lower than 7% (World Bank).

48
 Chapter Four Findings and Analysis

1. Introduction

Amid the tapestry of Afghanistan's socio-economic landscape, the challenge of youth

unemployment emerges as a focal point demanding meticulous examination and
strategic intervention. This chapter stands as the culmination of an in-depth exploration
into the complex interplay of factors that underlie the youth unemployment crisis.
Through a comprehensive analysis of labor market dynamics, causal mechanisms,
policy landscapes, educational paradigms, entrepreneurship prospects, and international
best practices, this chapter aims to illuminate the myriad facets influencing the present
scenario. By distilling insights drawn from a rich array of scholarly resources, this
chapter presents a synthesized narrative that not only paints a vivid portrait of the issue
but also paves the way for informed decision-making, collaborative action, and
meaningful change. The intricate dance of variables that converge to shape youth
unemployment in Afghanistan serves as a canvas upon which the brushstrokes of
understanding and transformation are deftly applied, with the shared aspiration of
fostering economic empowerment and charting a trajectory toward a more
prosperous future.

2. Findings and Insights

This chapter serves as the culmination of an exhaustive library-based research endeavor,

amalgamating insights from a diverse range of sources to illuminate the intricate
landscape of youth unemployment in Afghanistan. Through an exploration of labor
market dynamics, causal factors influencing youth unemployment, governmental
interventions, educational reforms, entrepreneurship prospects, global best practices,
and a suite of recommendations, this chapter aims to present a comprehensive panorama
for comprehending and addressing this pivotal concern.

1. Labor Market Dynamics and Structure

• Afghanistan's economic foundation leans heavily on agriculture and extractive
industries, contributing to a scarcity of job variety and availability.
• Informal social networks wield substantial influence in shaping employment
opportunities, highlighting the role of personal relationships in navigating the
labor market.
• Demographic shifts, conflict, and gender inequalities weave a complex fabric of
dynamics that directly influence job availability and the broader labor landscape.

49
17.Youth Unemployment: Causes and Implications:
• A confluence of factors, including population dynamics and limited economic
openings, precipitates the prevalent issue of high youth unemployment rates.
• A disconnect between the skills imparted by educational systems and those
demanded by employers exacerbates the problem, leading to a mismatch in
expectations.
• The consequences span the socio-economic spectrum, encompassing social
unrest, a drag on productivity, and heightened reliance on informal economic
activities.

18.Government Policies and Private Sector Engagement:

• The efficacy of prevailing government strategies to tackle youth unemployment
displays considerable variability, necessitating continuous evaluation and
adaptive measures.
• The private sector emerges as a potential catalyst, with initiatives such as
corporate social responsibility and targeted youth employment programs
demonstrating promise.
• Collaborative initiatives involving government bodies and private enterprises
offer a viable avenue for sustainable job creation and the nurturing of
entrepreneurial ventures.

19.Skill Development and Education Reforms

• Skill enhancement and vocational training rise as linchpins for bridging the chasm
between education and employment, fostering smoother transitions.
• The harmonization of curricula with industry requisites assumes pivotal
importance, serving as a conduit for augmenting graduates' employability.
• Adopting a lifelong learning approach stands imperative to empower individuals
to adapt to the ever-evolving demands of the labor market.

20.Entrepreneurship and Start-up Ecosystem

• Entrepreneurship emerges as a promising route for addressing youth
unemployment, nurturing self-reliance and sparking innovation.
• The triumphs of youth-led start-ups underscore the potential of young individuals
to be architects of economic progress.
• Cultivating an ecosystem conducive to entrepreneurial pursuits calls for a
supportive framework encompassing access to capital, mentorship, and
infrastructure.

50
21.International Best Practices and Adaptation:
• Insights from international experiences emphasize the significance of customizing
global best practices to harmonize with Afghanistan's distinctive context.
• Cross-border cooperation provides a reservoir of insights into effective youth
employment models that can be localized and expanded within Afghanistan.
• By drawing inspiration from fruitful strategies abroad, Afghanistan can craft a
bespoke framework to wrestle with its unique youth unemployment challenge.

22.Recommendations for Sustainable Change

• A holistic suite of recommendations is delineated, spanning enhancements in
governmental policies, heightened involvement of the private sector, educational
reformation, and the stimulation of entrepreneurial culture.
• The orchestration of these multifaceted recommendations forms the crux of a
synchronized strategy aimed at sustainable youth employment.
• Collaboration across stakeholder tiers is accentuated, underlining the need for
harmonious execution of the proposed remedies.

This chapter distills the multifarious facets explored in the monograph, crystallizing
them into a succinct repository of insights that spotlight the interconnected tapestry of
elements molding Afghanistan's labor landscape and youth unemployment dilemma.
These findings stand as an illuminating compass for policymakers, researchers, and
stakeholders, uniting their efforts to drive positive transformation, kindle economic
advancement, and empower the youth in shaping a promising trajectory forward.

51
 Chapter Five Conclusion and Recommendation Conclusion

In navigating the complex labyrinth of youth unemployment in Afghanistan, this study

has unraveled a web of interconnected factors that underpin the intricate challenge
facing the nation. From the demographics of a burgeoning youthful population to the
persistent echoes of conflict and gender disparities, the tapestry of influences defies
simplicity. Through an in-depth analysis of labor market dynamics, an exploration of the
complex causal mechanisms, and an assessment of policy frameworks, this study has
shed light on the nuanced underpinnings of youth unemployment. Moreover, the inquiry
into education reforms, the promising realm of entrepreneurship, and the lessons drawn
from international contexts have illuminated potential avenues for transformation.

The demographic bulge that characterizes Afghanistan's population landscape has

conferred both a dividend and a challenge. While the influx of young individuals into
the labor market presents an opportunity for harnessing the demographic dividend, the
challenge lies in providing them with the tools and avenues for productive engagement.
The labor market's reliance on traditional sectors like agriculture and extractive
industries underscores the need for diversification. The consequences of unaddressed
youth unemployment ripple across the socio-economic spectrum, breeding
dissatisfaction, eroding productivity, and impeding the nation's overall progress. In
response to these intricate dynamics, a series of recommendations emerges as a
comprehensive framework for action. To begin with, policy reforms lie at the heart of
the endeavor. A dynamic and evolving policy landscape that responds to shifting labor
market demands is imperative. Policymakers must engage in a continuous dialogue with
stakeholders to calibrate policies effectively. Additionally, the private sector's active
engagement holds transformative potential. Corporations should align their social
responsibility initiatives with youth development and job creation, amplifying their
impact.

Education emerges as the cornerstone of change, and educational reforms should pivot
toward equipping students with practical skills and aligning curricula with industry
needs. Vocational training programs can offer youth the hands-on experience required
to bridge the gap between education and employment. Furthermore, the promotion of
entrepreneurship creates a conduit for self-employment, innovation, and economic
empowerment. Incubation centers, start-up accelerators, and targeted funding
mechanisms will nurture a culture of entrepreneurship among youth. Drawing
inspiration from international experiences amplifies the collective learning process.
Cross-border collaborations, knowledge-sharing platforms, and best practice exchanges
offer invaluable insights that can be adapted to Afghanistan's unique context. By
learning from successful strategies, Afghanistan can expedite its journey toward

52
addressing youth unemployment effectively. As these recommendations are
implemented, a comprehensive monitoring and evaluation mechanism should be
established. Regular assessments will enable course correction, ensuring that strategies
remain aligned with changing circumstances and aspirations. Collaboration between
governmental bodies, private enterprises, educational institutions, and civil society
actors will be pivotal in orchestrating a harmonious convergence toward sustainable
solutions.

In summation, the complexities of youth unemployment in Afghanistan necessitate a

multi-dimensional approach that spans policy, education, entrepreneurship, and
international collaboration. This study, by deciphering the intricate mosaic of influences,
offers not only insights into the nature of the challenge but also a roadmap for action.
By embarking on this journey, Afghanistan has the opportunity to empower its youth,
drive economic growth, and pave the way for a future that transcends the constraints of
unemployment. Through concerted efforts and the application of these
recommendations, the nation can unleash the latent potential of its youth, forging a path
toward prosperity and transformation.

Recommendations

In light of the insights drawn from a thorough analysis of Afghanistan's youth

unemployment landscape, a set of focused recommendations emerges:

Strategic Policy Framework: Prioritize employment creation as a developmental

cornerstone, positioning it alongside security concerns. Develop a National Employment
Policy that coordinates efforts, with guaranteed donor commitments to sustain public
spending and employment initiatives beyond 2014.

Private-Public Partnerships: Foster collaboration between the private sector, NGOs,

and governmental bodies. Leverage corporate social responsibility and public-private
partnerships to drive skill development and job creation. Establish common standards
for vocational training centers.

Responsive Skill Development: Rethink education to align with industry needs.

Combine formal education and vocational training, catering to varied skill requirements.
Invest in market-driven vocational training institutes and customized capacity-building
centers.

Agricultural Focus: Revitalize the agricultural sector as a driver of employment.

Channel resources through platforms like the National Solidarity Programme to enhance

53
productivity, market access, and value chain integration. Develop non-farm rural
employment and manufacturing.

Data-Driven Strategies: Address the dearth of labor market information through

comprehensive surveys and studies. Conduct sector and economic forecasts for timely
interventions. Implement policies based on evidence, ensuring effective labor market
functioning.

Inclusion and Equity: Embed gender-sensitive policies, offering targeted support for
women's workforce participation. Prioritize minority inclusion through tailored
education, credit schemes, and skill development programs.

Responsible Implementation: Adopt guiding principles for employment programs,

enhancing coherence and impact. Utilize Employment Service Centers as coordinators.
Focus on long-term sustainability, with rigorous evaluations underpinning interventions.

Adhering to these recommendations will empower Afghanistan to dismantle the barriers

of youth unemployment, driving the nation toward comprehensive growth and
prosperity. The path forward marries collaboration, data-driven strategies, and holistic
empowerment, reflecting the nation's commitment to harnessing its youth as architects
of a vibrant future. Guided by the synthesized insights, a series of recommendations
emerges as a compass to guide future endeavors. The symbiotic relationship between
policy reforms and private sector engagement surfaces as a cornerstone. Policymakers
should prioritize dynamic policies that adapt to evolving labor market demands while
harnessing the private sector's capacity for job creation. Education reforms that bridge
the gap between classroom learning and industry requirements stand indispensable,
highlighting the need for curricular updates and vocational training.

Furthermore, the blossoming realm of entrepreneurship beckons as a fertile terrain for

youth empowerment. Crafting a nurturing ecosystem complete with access to capital,
mentorship, and infrastructure will foster innovation and self-sufficiency. Building upon
international best practices, Afghan stakeholders can synthesize a bespoke framework
that encapsulates the nation's unique context while emulating successful strategies from
abroad.

Ultimately, a multi-pronged approach intertwined with stakeholder collaboration will be

the fulcrum upon which transformative change pivots. By engaging governmental
bodies, private enterprises, educational institutions, and civil society, a harmonious
convergence can be orchestrated to unlock the untapped potential of Afghanistan's
youth. In this holistic journey toward sustainable solutions, the chapter's findings

54
illuminate a pathway forward, fueled by the collective desire to alleviate youth
unemployment and uplift a generation as architects of a prosperous tomorrow.

List of Abbreviations:

1. LM: Labor Market

2. YU: Youth Unemployment
3. AF: Afghanistan
4. GDP: Gross Domestic Product
5. ED: Education
6. ES: Employment Situation
7. ULR: Unemployment Rate
8. LFPR: Labor Force Participation Rate
9. CSR: Corporate Social Responsibility
10.STEM: Science, Technology, Engineering, and Mathematics
11.VET: Vocational Education and Training
12.IDPs: Internally Displaced Persons
13.MSMEs: Micro, Small, and Medium Enterprises
14.ICT: Information and Communication Technology
15.UN: United Nations
16.ILO: International Labour Organization
17.NGO: Non-Governmental Organization
18.R&D: Research and Development
19.ECON: Economic
20.UNESCO: United Nations Educational, Scientific and Cultural Organization
words

55
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labor-social-affairs-martyrs-and-disabled.
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14.Forecast of Wireless Intelligence, based on data up to Q1 2010 (cited in the Afghanistan
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integrity_0.pdf p50-52
16.NRVA 2007/8, p.25.

57
 Appendix

**Appendix A: List of Sources and References**

• NRVA 2007/8
• Poverty Status in Afghanistan: A Profile Based on the National Risk Vulnerability Assessment (NRVA) 2007/8,
Ministry of Economy and the World Bank, Economic Policy and Poverty Sector, 2010: from 17% in Kabul
province to 96% in Badakhshan.

• NRVA 2007/8
• Afghanistan Economic Update, October 2011, The World Bank, Poverty Reduction, and Economic
Management, South Asia Region.
• In June 2010, Waheedullah Shahrani, the Afghan Minister of Mines, declared: "A very conservative estimate
has been one trillion. Our estimation is more than that... the idea is it could be up to three trillion dollars,"
before admitting that "developing mines [would] take a long time and [that] Afghanistan lacked the basic
infrastructure for major mining investments” (source: AFP, June 16, 2011).

• While there is a high regard for land ownership in Afghanistan, the contribution of income from land is and will
continue to be limited. Household income is derived from a diversity of sources, including services,
employment and remittances and does not depend on agriculture alone.
• Afghanistan. US Department of Agriculture, ‘Commodity Intelligence Report’, June 2009. 30 US Department
of Agriculture, ‘Afghanistan: Above‐ Average Wheat Outlook for 2010‐2011’,
• Afghanistan Economic Update, October the World Bank, Poverty Reduction, and Economic Management,
South Asia Region.
• Forecast of Wireless Intelligence, based on data up to Q1 2010 (cited in the Afghanistan Economic Update,
October 2011, The World Bank, Poverty Reduction, and Economic Management, South Asia Region, p.13).
• “Transition in Afghanistan: Looking Beyond 2014”, The World Bank, November 2011. 34 Interview with ADB
representative, December
• WB - Afghanistan Economic Update, October
• http://afghanistan.unifem.org/media/pubs/08/factsheet.html
• Source: Samuel Hall, Economic Assessment and Labour Market Survey of Balkh, Baghlan, Kandahar, and
Kunduz,
• ILO/UNHCR, Integration of Returnees in the Afghan Labour Market,
• N. Majidi, Research study on the Coping Strategies of Returned Refugees in Urban Setttings, for the
Norwegian Refugee Council (NRC)

• The World Bank, Transition in Afghanistan: Looking Beyond Executive Summary, 12

• National Risk Vulnerability Assessment (NRVA) Government of Afghanistan, Ministry of Economy, with the
assistance of the European Union
• Marc Vansteenkiste and Sajith de Mel, four years of Labor Force Data Collected by the Employment Service
Centers in Afghanistan, UNDP/ILO, 2008

• Bureau of Labor Statistics, U.S. Department of Labor

• Source: Vansteenkiste and De Mel, UNDP/ILO,
• Poverty Status in Afghanistan: A Profile Based on the National Risk Vulnerability Assessment (NRVA) 2007/8,
Ministry of Economy and the World Bank, Economic Policy and Poverty Sector, 2010: from 17% in Kabul
province to 96% in Badakhshan.
• Afghanistan Economic Update, October 2011, The World Bank, Poverty Reduction, and Economic
Management, South Asia Region.
 • World Bank / UNHCR, Research Study on IDPs in urban settings – Afghanistan, 2011.
https://documents1.worldbank.org/curated/en/458151468153539693/pdf/685390WP00PUBL0Ps0in0urban0
settings.pdf
• Samuel Hall Consulting Jogi and Chori Frosh out-of-school children: a story of marginalization, for UNICEF.
The sampling targeted 153 Jogi and Chori Frosh households, 164 Jogi and Chori Frosh children as well as
100 non-Jogi households and 143 non-jogi children.

• MoLSAMD, National Priority Program, Facilitation of Sustainable Decent Work through Skills Development
and Market-Friendly Labor Regulations, Revised First Draft,
UNIFEM Afghanistan Fact Sheet
Samuel Hall, Economic Assessment and Labour Market Survey of Balkh, Baghlan, Kandahar, and Kunduz, 2011
• Samuel Hall, Economic Assessment and Labour Market Survey of Balkh, Baghlan, Kandahar, and Kunduz,
2011
•

**Appendix B: Key Data Visuals**

Figure 8/9: Income generating activities of extremely marginalized communities

Economic Data from the Poverty Status in Afghanistan (including urban and rural
districts)
National
Agriculture 59.1%
Manufacturing, construction, mining, and quarrying 12.5%
Services 24.6%
Public administration 3.9%

Source: Poverty Status 2010

 Unemployment rate (NRVA 2008) – Poverty Status

Residence Male Female Total

Urban (9) (18) 10.5

Rural (7) (7) 7

Total (7) (7) 7

Population Growth in 2020

65+

25 - 64

14 -25

0 - 14

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%

Table 10:
Income
generating
activities of
extremely
marginalized
communities,
2011.
**Appendix C: Comparative International Studies**

The conclusion excerpt from the National Bureau of Economic Research emphasizes the
effectiveness of expansionary aggregate demand policies in addressing youth unemployment.
This approach, though applicable in principle, requires adaptation when considering Afghanistan's
distinct challenges, including political instability and reliance on specific industries. While both
contexts recognize the importance of economic growth for job creation, Afghanistan's situation
demands a more nuanced strategy encompassing structural reforms, skill development, and
gender considerations to counter the complexities posed by conflict and limited diversification.

**Appendix D: Ethical Considerations**

This appendix outlines the ethical considerations that have guided the research process and the
dissemination of findings in this monograph. Recognizing the importance of maintaining rigorous
ethical standards, the following principles were upheld throughout the research:

1. **Informed Consent: ** All data sources, including research participants and secondary data,
have been treated in accordance with informed consent protocols. Whenever primary data
collection involved individuals or groups, their voluntary participation and understanding of the
research's purpose were paramount.

2. **Anonymity and Confidentiality: ** Privacy and confidentiality were strictly maintained. Data
collected from participants were de-identified and aggregated, ensuring that individual identities
remain protected. Sources referenced in this monograph are anonymized or pseudonymized
whenever required.

3. **Credible Sources: ** All data sources, including statistical information and previous research,
have been carefully vetted for credibility and relevance. Ensuring that accurate and reliable
information forms the foundation of this monograph maintains the integrity of the research.

4. **Balanced Presentation: ** In presenting findings and insights, an objective and balanced

approach was adopted. A comprehensive representation of perspectives, data, and viewpoints
was ensured, allowing readers to form well-informed conclusions.

5. **Avoidance of Bias: ** Every effort was made to minimize bias in the research process,
analysis, and interpretation of findings. Objective and impartial treatment of data and information
contributes to the scholarly rigor of this monograph.

6. **Attribution: ** Proper attribution was given to all sources referenced in this monograph,
whether primary data participants, published research, or institutional data sources. This
acknowledges the contributions of others and maintains academic integrity.

7. **Respect for Cultural Sensitivities: ** Given the diverse cultural and societal contexts that
impact youth unemployment, particular attention was paid to respecting cultural sensitivities and
avoiding any form of stereotyping or misrepresentation.
8. **Continuous Review: ** Ethical considerations were not limited to a single point in time but
were subject to ongoing review and reflection throughout the research process. This ensured that
evolving ethical concerns were addressed promptly and appropriately.

It is important to note that while every effort was made to adhere to these ethical considerations,
the dynamic nature of research and complex contexts could introduce unforeseen challenges. As
such, this appendix serves as a transparent declaration of the ethical principles that have guided
this monograph and the commitment to conducting research that respects individuals,
communities, and the pursuit of knowledge. **Appendix G: Glossary of Abbreviations**

This appendix provides a glossary of abbreviations and acronyms used throughout the
monograph to facilitate reader comprehension of specialized terms and references.

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