Executive Summary

Myanmar’s economy has been affected by numerous internal and external shocks since 2020. Myanmar’s transition to an open market economy in 2011 propelled its GDP per capita by 52 percent between 2012 and 2019 and caused poverty to fall from 42.4 to 24.8 percent between 2010 and 2017. However, the Covid‐19 pandemic and subsequent military coup have now reversed these gains. Estimates of real GDP per capita grew by 2 percent in 2020 and fell by 18.4 percent in 2021, the year of military coup. Economic growth recovered to a tepid 3 percent in the following year, suggesting that output levels are still well below 2019 levels.

This report takes stock of the effect of these shocks on Myanmar’s workers and their well‐being using a reliable new source of household data. The report compares employment indicators from 2017 and 2022 to spotlight the extent of adversity faced by workers and households. Employment indicators for 2017 are based on official Myanmar Living Conditions Survey (MLCS) data. However, no official data exists after 2020. A new set ofsurveys —the Myanmar Subnational Phone Survey (MSPS) conducted by the World Bank—are now filling this knowledge gap. MSPS provides reliable employment indicators at the sub‐national level for 2022 that are comparable with baseline official data from 2017. MSPS provides reliable employment indicators at the sub‐ national level for 2022 that are comparable with baseline official data from 2017. MSPS’ large sample of 8500 households, covering approximately 95 percent of Myanmar’s population across all states and regions, ensures that almost every demographic group is proportionally represented in this study. While anchored in the MSPS, this report complements quantitative data with qualitative insights from the Community Welfare Monitoring Surveys, in particular the March 2023 round, conducted by the World Bank since 2020.

Labor force participation and employment rate in Myanmar fell by 1.6 and 4.8 percentage points, respectively, between 2017 and 20221 . Although 9 million people were added to Myanmar’s working age between 2017 and 2022 due to normal population growth, only 2.5 million males and 0.8 million females were added to its labor force. Female employment in Myanmar has particularly suffered in recent years. Compared to men, adult females are more likely to be out of the labor force, more likely to be unemployed, and more likely to be out of education or training.

Male workers were partially protected by their education and work experience. Employment ratesfor men with up to middle school level of education fell in the past half decade, but those with high school or college education either increased or held their employment rate at par with 2017 levels. Female workers with college or higher levels of education, in contrast, experienced a fall in the employment rate during this time. Incidence of “Not in Employment, Education or Training” (NEET) increased by 9.4 percentage points among college educated women during this time.
The quality of jobs and labor earnings deteriorated sharply. Employment in mining, construction and the retail sector have risen while agricultural employment has contracted between 2017 and 2022. Moreover, private sector salaried employment opportunities have diminished considerably while casual and self‐employed roles have flourished. Younger adults are more likely to be employed in retail services while older, more experienced workers have switched to agricultural activities in 2022 – pointing to a misallocation of human capital towards less productive sectors. Real wages of salaried workers have fallen by 15 percent during the same time.

Aggregate nationwide labor market trends, however, mask significant differences at the subnational level.
Employment rates have fallen by more than 15 percentage points between 2017 and 2022 in Kayah, Kayin and Tanintharyi – along the eastern border and Sagaing in the north. In comparison, states and regions on the western border and at the middle of the country experienced up to 5 and 10 percentage point decline in employment rate respectively. A greater share of households in eastern states and regions incurred income losses of more than 20 percent over the past 12 months, compared to other states and regions2 .

Agriculture was a buffer against falling employment opportunities in western parts of the country. Between 2017 and 2022, rural employment growth outpaced urban levels in western areas, while in eastern states and regions rural employment lagged growth in urban employment. Differential trends in rural and urban employment are likely due to differences in patterns of agricultural growth across locations. Agricultural activities expanded in the western parts of the country and shrank along the eastern border during 2022. States and regions in the middle of the country, comprising of Mandalay, Nay Pyi Daw, Magway and Ayeyarwady, experienced notable services sector growth but relatively smaller changes in other sectors. Private sector salaried employment has reduced in all states and regions.

Reductions in wage earnings were near universal but states and regions that had higher average wages in 2017 experienced larger cuts in the following half‐decade. The shrinking of private sector employment opportunities has meant that real wages in 2022 were lower than 2017 across all states and regions states. However, states and regions with higher average wages in 2017 experienced larger reductions in real earnings until 2022 – resulting in wage convergence across states. The universal drop in real wages and deep household income losses are associated with over 70 percent of households in every state and region having to either sell assets, deplete savings, or borrow.

Migration is rarely adopted as a coping strategy; when migration does occur, it is mostly within the country and towards urban and more well‐off areas. Thirty percent of households that resorted to migration as a coping strategy had a member that relocated to another rural area within Myanmar, while 56 percent of such households had a member migrate to urban regions. International migration was limited to a select number of households. Overall, 4.1 percent of the population changed their township of residence in the past 2 years (that is, since February 2021) and 2.5 percent of the population changed townships across state and regional boundaries (either voluntarily or due to conflict induced displacement). Compared to other households that have been residing in the same township for more than 2 years, immigrant households from other states and regions have fewer assets, less education, more precarious employment, and have experienced deeper income losses in the past year.

Increasingly, the place of residence within states and regions—not individual skills or endowments‐‐determines employment outcomes for Myanmar’s workers. In 2017, worker attributes explained 12.6 percent of the variation in wages, while 14 percent of its variation could be attributed to township level characteristics. But by 2022, the contribution of township level factors towards explaining wage variation doubled while that of individual characteristics increased only 4.1 percentage points. Thus, wages are increasingly more influenced by characteristics of where workers reside within states and regions, compared to abilities, skills, education levels and other individual level factors. This is perhaps not surprising given the nature of location‐specific, yet covariate, shocks that the country has faced. This report spotlights three township characteristics that have strongly influenced employment outcomes.

Employment has particularly suffered in townships with higher incidence of conflict events. Our analysis shows that a one percentage point increase in township share of conflict incidents between 2021 and 2023 is associated with an average 2.6 percentage point reduction in employment rate. These events contributed to adverse impacts on the employment status of higher educated male workers, between the ages of 25 to 35, and living in urban areas.

Employment in the mining sector has increased in townships that had a pre‐existing mine, leading to poorly diversified economic structures. Concentration of employment in mineral extraction industry could carry substantial longer‐term costs and environmental risks across Myanmar. The share of mining and construction jobs in townships with preexisting mines rose by 1.8 percentage points between 2017 and 2022 while agricultural share in employment contracted by 8.6 percentage points in these areas.

Townships that have higher likelihood of opium production experienced large increases in agricultural activities and a fall in mining and construction activities. According to the UN Office on Drugs and Crimes (UNODC), Myanmar experienced a historic growth in poppy cultivation in 2022. Poppy production in the country is concentrated in Shan, Kachin, Kayah and Chin states. Townships located at altitudes over 1000 meters above sea level in these four states are offer ideal conditions for poppy cultivation. The share of agricultural employment in these townships was 22.2 percentage points higher in 2022 than 2017, while mining and construction employment in these areas fell by 13.3 percentage points during the past half decade. Average agricultural wages in townships with high risk were also considerably higher during this time.

Faced with a multitude of shocks—electricity outages, escalating energy prices, conflict—Myanmar’s households have endured deep income losses. Of these three, conflict is inflicting the greatest impact. A one standard deviation increases in the incidence of conflict in a township increases the probability of households experiencing deep income losses (of more than 20 percent) over the past year by 4.7 percent – the highest among a range of individual and township level factors.

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