Cabo Verde Economy - Jobs and Employment

Jobs and Employment in Cape Verde

The labor market in Cape Verde reflects the archipelago's service-oriented economy and its ongoing recovery from recent global shocks. While recent data indicates a significant drop in unemployment rates, the country faces structural hurdles, particularly regarding the quality of jobs available, the prevalence of informal work, and the integration of young people into the workforce.

The Employment Situation: A Post-Pandemic Recovery

The employment landscape in Cape Verde has shown resilience and improvement following the severe contraction caused by the COVID-19 pandemic. Driven largely by the rebound in tourism, the unemployment rate has followed a downward trajectory.

• Current Figures: In 2024, the national unemployment rate dropped to 8.0%, a decrease of 2.3 percentage points compared to 2023. Preliminary data for the first quarter of 2025 indicates continued improvement, with the unemployed population reducing by 10% compared to the previous period.
• Regional Disparities: Employment opportunities are unevenly distributed across the islands. The tourism hubs of Sal and Boa Vista consistently record the highest employment rates (75.4% and 73.9% respectively in 2024), effectively acting as labor magnets. Conversely, rural municipalities often face higher rates of underemployment.
• Sector Dominance: The economy is heavily service-based. The service sector absorbs the vast majority of the workforce (approximately 68.8% in 2023), led by commerce, transport, and public administration. The private corporate sector is the largest employer (47%), followed by self-employment (19.9%) and public administration (17.4%).

Youth Employment Challenges: The "NEET" Phenomenon

Despite rising literacy rates, young people (aged 15–35) face significant barriers to entering the labor market. The challenge is not only unemployment but also inactivity.

• High Youth Unemployment: While the general unemployment rate is single-digit, youth unemployment remains stubbornly high. For the 15–24 age group, the unemployment rate was 20.1% in 2024.
• The NEET Issue: A critical concern is the high proportion of youth Not in Employment, Education, or Training (NEET). In 2023, approximately 26.4% of young people aged 15–35 fell into this category. This represents a significant segment of the population that is economically excluded, with women being disproportionately affected due to family responsibilities.
• Skills Mismatch: There is a persistent disconnect between the education system and market needs. While university enrollment has increased, employers frequently report a lack of specialized technical skills and soft skills, particularly for the tourism, construction, and digital sectors.

Informal vs. Formal Jobs

A defining characteristic of the Cape Verdean labor market is the high prevalence of informality. While the formal sector offers stability and benefits, a large portion of the population relies on informal activities for survival.

• The Scale of Informality: As of 2024, approximately 47.5% of employed people worked in the informal sector. This figure is even higher in rural areas, where informality can reach nearly 73%.
• Characteristics of Informal Work: Informal jobs are defined by a lack of social protection. These workers are not registered with the National Institute of Social Security (INPS) and generally lack paid annual leave or sick leave. They are often self-employed or work in micro-enterprises, agriculture, and small-scale commerce.
• The Formal Sector: Formal employment is concentrated in the public administration and larger private enterprises, particularly in tourism and telecommunications. These jobs offer social security coverage, which reached about 50% of the employed population in 2024.
• Transition Efforts: The government has implemented measures to encourage formalization, such as the REMPE (Special Regime for Micro and Small Enterprises), which simplifies taxation and social security payments for small businesses to encourage their integration into the formal economy.

summary

Cape Verde's labor market is expanding, with more people finding work in 2024 and 2025 than in previous years. However, the "quality" of employment remains a central issue. With nearly half the workforce in the informal sector and a quarter of young people disengaged from both work and education, the focus of policy is shifting from merely creating jobs to creating decent jobs—formal positions that provide social security and align with the skills of the country's youth.