Amenia Blog carries an ArmenPress story on unemployment in Armenia which is rather misleading given the true state of the local economy. Sure, there is economic growth, but it’s registered only in a few select areas of the economy, and we still have the perennial problem of the distribution of any wealth that is generated. However, the level of unemployment in Armenia is definitely not 7.2 percent.

By the end of 2006 December unemployment level in Armenia dropped to 7.2 percent from 7.7 percent 12 months before. However, it rose in some provinces, particularly in the southernmost Syunik and Lori in the northeast.

[…]

The unemployment allowance has risen from 3,900 drams [$10.60] in 2003 to 12,000 Drams. [$32.70]

Anyway, I made a few comments on that post saying that the official statistics only represent those people registered as unemployed and that the real rate is considered to be around 30 percent. For example, the official rate of unemployment in Azerbaijan in 2005 was apparently 1.1 percent according to the CIA Factbook, something which I find hard to believe as well. The situation in Armenia is explained more by Yerkir.

Just a superficial analysis of those numbers indicates that the official statistics does not show the real picture of the unemployment rate in the country. The studies carried out among households reveal that the real unemployment rate in Armenia is 4 times bigger than the numbers shown by the official statistics. Despite a decrease trend, the actual unemployment rate in Armenia stood at 31.3 percent in 2005. For comparison, it was 31.6 percent in 2004, 35.3 percent in 2002, 38.4 percent in 2001.

I started thinking more on why the statistics are so low, and not least because every single unemployed Armenian I know isn’t registered as such, and it’s a tough question to answer. However, the ArmenPress item seems to indicate that only those with a record of work for 12 months is eligible for benefits which does represent an obstacle because in lieu of official employment, many Armenians work in the shadow and are not going to reveal that to the authorities.

More research is definitely needed on this subject, so it was interesting to find two albeit very specific studies on unemployment in Armenia and Azerbajan on the CRRC Caucasus blog. The study on unemployment among women in Armenia details why many don’t register, for example.

Anahit Mkrtchyan’s main explanation for Armenian women’s high unemployment rate and political inactivity is the fact that women’s behavior is directed towards survival instead of development and self-expression in the public sphere.

Furthermore, Mkrtchyan found that a very small share of unemployed women applied for state or private employment agencies in Armenia (11% and 3.2% respectively). Mkrtchyan explained the latter as a result of the fact that a) Armenian women want to avoid having the stigma associated with the unemployed; b) they avoid boring bureaucratic procedures, c) “good” jobs are not publicly announced (the information is disseminated mainly through a network of friends/relatives).

Meanwhile, in Azerbaijan, the psychological impact of unemployment is investigated. Unfortunately, there is no similar research on Georgia made available on the site.

Unemployment following the collapse of the command economies in the Caucasus has had consequences far beyond the traditional questions of income. Unemployment affects people’s psychological condition and, on a more basic level, the very fabric of society.

Rufat Efendiyev conducted a quantitative survey among 492 individuals (proportionally selected in each district) who were registered as unemployed in Baku. In his research, Efendiyev found a steep increase in the number of physical and mental illnesses of the unemployed population. Additionally, 67% of respondents described their psychological condition as stressful because of financial difficulties.

Anyway, the full comments thread over at Armenia Blog is here, and if anyone at the CRRC Caucasus blog is reading this one, please note that if the “OneWorld — Engaged Armenian Commentary” link was meant to point to mine, the URL is wrong. At the moment, the link, http://www.oneworld.blogspot.com, goes to an empty page.

Anyway, I’d like to see more studies on the general employment picture in the South Caucasus and not least because both employment and unemployment is often hidden. Therefore, it’s difficult to get a clear picture of the situation. Certainly, official statistics should be treated with some caution.