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The Maltese economy recovered strongly after the financial crisis of 2009 and its labour market kept the pace with the rapid evolution of the economy since EU membership. This labour market resilience has to be seen in the context of important labour market reforms undertaken in recent years that have played an important role in raising the Maltese...
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... share of people working in industry stood at 15%, while the shares of construction and agriculture stood at 6% and 1%, respectively. Figure 2 shows that there is a considerable degree of heterogeneity in the skills required at the sectoral level. More than half the workers in other market services (which include ICT, finance and insurance, professional and technical activities and the remote gaming industry) and the public administration, including health and education, are employed in high skilled positions. ...
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... The sector comprising public administration, education & health also contributed positively, driven by increased employment within health & social work activities and, to a lesser extent, in education. The substantial employment growth registered in recent years was facilitated by an increase in the participation rate of Maltese nationals and inward migration (Grech, 2017;Micallef, 2017). Although the unemployment rate decreased to around 4% since 2017 (from 6.1% in 2013), reliance on foreign workers has increased. ...
... Apart from the construction sector, services sectors registered the largest increases in the share of foreign workers, namely the accommodation & food services sector, the arts, entertainment & recreation sector, professional, scientific & technical activities, the information & communication sector and, to a lesser extent, the sector relating to administrative & support service activities. This large inflow of expatriates helped address the labour and skill shortages brought about by the rapid development of new industries (Micallef, 2019). This section looks at sectoral trends in real productivity, employee compensation, and ULC in Malta during the two decades since 2000. ...
The economy of the Maltese islands has undergone significant structural change and diversification since the turn of the century. The aim of this study is to provide an overview of sectoral developments in output, employment, unit labour costs, and prices in Malta during the two decades to 2020. Analysis is conducted using the newly-available chain-linked sectoral national accounts data, which is a departure from previous studies. Furthermore, we complement our findings with a comparative analysis of structural developments in Malta and in the euro area. The results show that the Maltese economy underwent a significant shift towards the services sector between 2000 and 2020. Sectors such as finance & insurance, information & communication, professional, scientific & technical activities, administrative & support services, and arts, entertainment & recreational services saw large increases in their shares of both output and employment. On the other hand, more traditional sectors such as manufacturing, construction, and food & accommodation services saw a decline in their relative importance. An analysis of productivity and cost developments also suggests that services sectors were generally the most productive during the period under study, while recording the highest levels of compensation per employee and the lowest unit labour costs. Nonetheless, sectoral productivity levels in Malta generally remain below those observed in the euro area. Output prices rose significantly in Malta between 2000 and 2020, generally reflecting the higher pace of economic growth when compared with the euro area. Received: 2 May 2021 / Accepted: 15 June 2021 / Published: 8 July 2021
