阿曼劳动力市场动态：阿曼（英）

Labor Market Dynamics inOman Bilal Tabti and Haytem Troug SIP/2025/034 IMF Selected Issues Papers are prepared by IMF staff asbackground documentation for periodic consultations withmember countries.It is based on the information available atthe time it was completed onDecember 18, 2024. This paper isalso published separately as IMF Country Report No 25/14. 2025APR IMF Selected Issues Paper Middle East and Central Asia Department Labor Market Dynamics in OmanPrepared by Bilal Tabti and Haytem Troug Authorized for distribution by Cesar SerraApril2025 IMF Selected Issues Papersare prepared by IMF staff as background documentation for periodicconsultations with member countries.It is based on the information available at the time it wascompleted on December 18, 2024. This paper is also published separately as IMF Country Report No25/14. ABSTRACT:The prevalent strong preference for public sector employment among young Omanis, coupledwith demographic pressures and medium-term fiscal sustainability objectives amid economic diversificationaway from hydrocarbons, underscores the urgency to pivot towards a more dynamic private sector that attractsOmanis towards private sector jobs. This note delves into recent developments and structural idiosyncrasies inOman's labor market, highlighting distinct segmentation and limited mobility, which disincentivized upskillingand impeded sectoral labor reallocation. The analysis reveals that comprehensive reforms are needed tonarrow the public-private wage gap, boost private sector employment for nationals, and elevate overallproductivity. These include aligning wages with productivity, improving vocational training, fostering femalelabor market participation, and enhancing labor market mobility for expatriate workers. Implementing thesemeasures is pivotal for Oman to realize its Vision 2040 objectives, transitioning towards a knowledge-basedeconomy, and achieving sustainable nonhydrocarbon growth. RECOMMENDED CITATION:Tabti, Bilal and Troug, Haytem 2025. “Labor Market Dynamics in Oman” IMFSelected Issues Paper (SIP/2025/034). Washington, D.C.: International Monetary Fund. Labor Market Dynamics in OmanOman Prepared by Bilal Tabti and Haytem Troug A.Introduction 1.The Omani economy needs to createmore than 220 thousand jobs for nationalsover the next eight years. Approximately 550thousand Omanis will enter the working agepopulation by 2032. Taking into account theprevailing participation rate (67 percent) and thereplacement of retirees (approximately 10thousand annually), around 220 thousand newjobs will need to be created by 2032, against 103thousand newly created jobs for Omanis during2012-2019. While it continues to be a preferreddestination for young Omanis, using the publicsector as an employment vehicle is no longer afeasible option under current efforts to entrenchmedium-term fiscal sustainability while reducingreliance on hydrocarbon revenues. The private sector in Oman continues to depend heavily on expatriate workers.Access to low- 2.cost, low-skilled workersfrom South Asia, together with flexible contractual terms, enabled thenonhydrocarbon economy to expand while complying with quota (Omanization rates) requirements. The lowlabor costs associated with these expatriate contracts have increased the competitiveness of nonhydrocarbonsectors and boosted profit margins by driving wages downward, particularly in labor intensive sectors. As aresult, expatriate employment became more responsive to nonhydrocarbon growth than in other GCCeconomies, rendering expatriate workers the overwhelming majority in the private sector. Additionally, this hasfacilitated the nonhydrocarbon sector's rapid adaptation to terms of trade shocks under the fixed exchangerate regime, as detailed by Fasano and Goyal (2004). 3.Policymakers in Oman, like inother GCC countries, continue to heavilyrely on administrative measures, such asquota requirements, to enforceemployment of nationals in the privatesector.These quotas are unevenly enforcedacross countries in the region and tend to befirm-size and occupation specific. They areless stringent for small and medium-sizedenterprises (SMEs), as well as in occupationsthat are less attractive to nationals such aslower-skilled jobs. On the other hand, quotarequirements are higher for administrativeand managerial occupations. These quotarequirements complement wage-subsidymeasures, which, although used much lessextensively than in neighboring countries,aim to incentivize firms to favor theemployment of nationals by reducing costdifferentials with expatriates. Sources: Country authorities and IMF staff calculations. Note: Theelasticity is estimated from OLS regressions of the logarithm ofemployment on the logarithm of non-hydrocarbon GDP, for the years1990-2022, except for Oman where regression coefficients areestimated for the period 1990-2019. It represents the percentagechange in employment as a result of a one percent increase in non-hydro