Poverty and Unemployment in Oil Based Economy

Report No.
14382-TR
Trinidad and Tobago

Poverty And Unemployment In An
Oil Based Economy
October 27, 1995
Country Department III

Country Operations II
Latin America and the Caribbean Region
FOR OFFICIAL USE ONLY
Document of the World Bank
This document has a restricted distribution and may be used by

recipients only in the performance of their official duties. Its contents
may not otherwise be disclosed without World Bank authorization
Currency Equivalents
(As of December 31, 1994)
US$1 = TT$5.80
TT$1 = US$0.17
Fiscal Year
January 1 - December 31
Preface
This report was prepared as part of the World Bank’s assistance strategy for
Trinidad and Tobago. The focus of the report includes both poverty and unemployment,
given the close linkage of the two in the country. Unemployment rates have traditionally
been high in Trinidad and Tobago, even at the height of the oil boom. During the oil
boom, however, the link between poverty and unemployment was mitigated by high
social expenditures and transfers. With the decline in oil prices, reduced economic
activity and decreases in public revenues, poverty and unemployment have worsened,
requiring increasing attention within the context of the country’s overall development
strategy.
A team led by Judy L. Baker (task manager, LA3C2) worked on the preparation of
this report. It is based on the findings of missions to Trinidad and Tobago in November
1994 and March 1995 which benefited from collaboration with the Socio Economic
Policy Planning Division of the Ministry of Planning and Mobilization. Background
papers were prepared by Amit Dar (labor market characteristics), Jaikishan Desai (poverty
profile), Peter Gregory (labor market, institutional issues), Michael Lewin
(macroeconomics), Erica Rapier (non-governmental organizations), Jennifer
Sancho/Roger England (health), Jyoti Shukla (social safety net), and Kin Bing Wu
(education). Howard Isenstein provided editorial assistance, and Deborah R. Trent
assisted in the production of the report. The Director of LA3 is Paul Isenman, the Lead
Economist Norman Hicks, and the Division Chief Philippe Nouvel (LA3C2).
iii
Contents
Preface ...................................................................................................................................... iii
List Of Acronyms....................................................................................................................... ix
Executive Summary .................................................................................................................. xi
1 A profile of the poor.........................................................................................................1
Trends in poverty and unemployment ............................................................................ 1
Living standards today.................................................................................................... 2
The characteristics of the poor........................................................................................ 4
Geographical .............................................................................................................. 5
Gender and family composition.................................................................................. 7
Ethnicity..................................................................................................................... 7
Education ................................................................................................................... 8
Employment............................................................................................................... 8
Income and expenditure patterns.............................................................................. 10
Housing, water and sewage ...................................................................................... 11
Crime and violence .................................................................................................. 11
2 The labor market............................................................................................................13
Background.................................................................................................................. 13
Government policies and programs to reduce unemployment....................................... 14
Characteristics of the labor force .................................................................................. 15
Labor force participation .......................................................................................... 15
Employment............................................................................................................. 17
Wages ...................................................................................................................... 19
Unemployment and underemployment..................................................................... 21
The institutional setting governing employment practices and industrial relations......... 23
The industrial relations act........................................................................................ 24
The retrenchment and severance benefits act............................................................ 26
Legal minimum wages.............................................................................................. 28
Wage determination: Institutional forces and markets.................................................. 30
The industrial court.................................................................................................. 30
Trade unions ............................................................................................................ 31
Wage policy ............................................................................................................. 31
Recommendations ........................................................................................................ 32
3 Promoting broad-based growth ....................................................................................37
Reinforcing the macro agenda to promote broad-based, labor intensive growth ........... 37
Improving infrastructure services ................................................................................. 40
Refocusing and strengthening the core public sector..................................................... 40
External environment ................................................................................................... 41
Recommendations ........................................................................................................ 42
4 Human resource development: The education and health sectors ............................43
Introduction ................................................................................................................. 43
The education sector..................................................................................................... 43
The education system ............................................................................................... 44
Performance indicators............................................................................................. 46
v
Contents
Equity and quality issues in the education system......................................................47

Recommendations.........................................................................................................52
The health sector...........................................................................................................54
Health and nutrition status.........................................................................................54
Structure and composition of the health sector..........................................................55
Low quality services and inefficiencies in the provision of health care......................55
Equity in the financing and delivery of health services..............................................57
Health sector reform .................................................................................................58
5 The social safety net....................................................................................................... 63

Introduction..................................................................................................................63
Government social safety net programs.........................................................................64
The traditional safety net...........................................................................................64
Safety nets and the new poor ....................................................................................64
Expenditures on safety net programs.........................................................................66
Constraints affecting the impact and efficiency of programs .....................................66
Non-governmental organizations...................................................................................73
The role of NGOs in poverty reduction.....................................................................73
The operating environment.......................................................................................74
Assessing and monitoring NGO performance in poverty reduction...........................74
List of Boxes
Box 2.1 Women in the labor market..................................................................................17
Box 2.2 Characteristics of the unemployed .......................................................................20
Box 2.3 Retrenchment schemes ........................................................................................25
Box 3.1 The resource “curse” ...........................................................................................34
Box 4.1 The inefficiencies of the health care system .........................................................53
Box 5.1 Duplicates and disincentives in the social safety net: A case in point...................62
Box 5.2 The role of community participation in poverty reduction ...................................70
List of Tables
Table 1.1 Characteristics of poor households, 1992...............................................................5
Table 2.1 Characteristics of the labor force, 1992 ................................................................19
Table 4.1 The education system in Trinidad and Tobago.....................................................45
Table 4.2 School enrollment rates by age group and quintile...............................................49
Table 4.3 Comparison of CEE scores by school type and income level ...............................50
Table 4.4 Variation in teacher qualifications by secondary school type................................51
Table 4.5 Expenditures in the education sector by level.......................................................52
Table 4.6 Per capita health expenditures by county .............................................................59
Table 5.1 Major safety net programs ...................................................................................70
vi
List of Figures
Figure 1 Trends in per capita GDP and unemployment ....................................................... 3
Figure 2 Unemployment by expenditure group.................................................................. 10
Annexes ...................................................................................................................................73
I. Measuring living standards
II. FGT poverty measures
III. Basic food basket for a 2400 KCal nutritionally balanced food basket, May 1992
IV. Comments on the labor force statistics collected by the CSO
V. Characteristics of the labor market: An analysis of the SLC, 1992
VI. Background of the trade unions in Trinidad and Tobago
VII. Health expenditures, sector inefficiencies and health reform
VIII. Key issues in major safety net program
Statistical Appendix...............................................................................................................123
vii
List of Acronyms
CBG Community Based Groups
CCC Civilian Conservation Corps
CEE Common Entrance Examination
COLA Cost of Living Adjustments
CXC Caribbean Examination Council
ECCE Early Childhood Care and Education
EWMSC Eric Williams Medical Sciences Complex
FIAS Foreign Investment Advisory Service
GDP Gross Domestic Product
GNP Gross National Product
HSRP Health Sector Reform Program
IEA International Association for the Evaluation of Education Achievement
LAC Latin America and the Caribbean
LFS Labor Force Survey
MOF Ministry of Finance
NAFTA North American Free Trade Agreement
NAP National Apprenticeship Program
NIB National Insurance Board
NIS National Insurance System
NGO Non-Governmental Organizations
OAP Old Age Pensions Program
PA Public Assistance Program
PSC Public Service Commission
RHA Regional Health Authorities
SBDC Small Business Development Corporation
SHARE Feeding Program
SLC Survey of Living Conditions
URP Unemployment Relief Program
UWI University of West Indies
YTEPP Youth Training and Employment Partnership
ix
Executive Summary
i. Today, some two decades after the beginning of the prosperous oil boom years in
Trinidad and Tobago, per capita income has fallen to its pre-oil boom level while both
poverty and unemployment are steadily increasing. This report seeks to understand the
causes, characteristics, and linkages of poverty and unemployment in the country, and
presents a viable strategy for improving living conditions in the short to medium term.
Chapter 1 discusses trends in poverty and provides a profile of the poor. Chapter 2
analyzes trends in unemployment, the salient characteristics of the labor force, the
institutional and legislative aspects of the labor market that affect unemployment, and
provides recommendations for policy changes which will improve the functioning of the
labor market. Chapter 3 discusses a macroeconomic strategy to promote labor-intensive
growth. Chapter 4 focuses on the weaknesses in the delivery of basic education and
health care to the poor with recommendations for improving these services. And finally,
Chapter 5 analyzes the social safety net as well as the role of NGOs, with
recommendations on how to increase the impact and effectiveness of safety net
programs.
Why is there poverty and unemployment in Trinidad and Tobago?
ii. Since the early 1960’s Trinidad and Tobago’s economy has been characterized by
its heavy dependence on the production and export of petroleum and gas. Oil windfalls
between 1973 and 1982 brought rises in income, expansion of jobs in the public sector,
investments in physical infrastructure, and improvements in living conditions. The
investment expenditures during the boom years were heavily dependent on the flow of oil
reserves and in sectors that were not sustainable. Public spending and production
subsidies increased, particularly in areas of current expenditures such as public
employment and transfers that were expanded to alleviate the continued high rates of
unemployment attributed to the capital intensive nature of the oil sector. The high wages
in the public sector inflated labor costs throughout the economy, undermining
competitiveness in the non-oil sector. Only a small number of the jobs created were in
the more long-term goods producing sectors. Even at the height of the oil boom, the
unemployment rate did not fall substantially below 10 percent.
iii. As international prices declined during the 1980’s, the economy experienced a
sharp contraction, with an average annual decline of 4.5 percent between 1982 and 1989.
Per capita GDP dropped from US$6,600 in 1982 to US$3,700 in 1993 while
unemployment nearly doubled from approximately 10 percent to 20 percent of the labor
force. With the economic decline of the 1980s and lack of development in sustainable
growth areas, the government was no longer able to sustain its high level of expenditures.
This led to the retrenchment of some redundant workers, particularly in the public sector,
which was overstaffed and inefficiently run. The rising unemployment, decline in the real
xi
POVERTY AND UNEMPLOYMENT IN AN OIL BASED ECONOMY
value of social sector spending, and retrenchment of workers in both the public and
private sector have led to an increase in poverty.
iv. In addition to the structural problems in the economy, there are some
administrative interventions that potentially create distortions in the labor market and are
not conducive to promoting labor-demanding growth, thus indirectly contributing to
unemployment. Though labor legislation in Trinidad and Tobago is much simpler and less
intrusive than that of many other countries in Latin America, other administrative
interventions, such as minimum wage legislation, and the Retrenchment and Severance
Benefits Act merit some reform.
v. Higher standards of living during the 1980s have also created problems in the
labor market in that they raised expectations of job wages, and thus created a wide gap
between actual market wage rates and expected wages. Though it is difficult to quantify
the effect of these elements, it is thought that they do account for some portion of the
unemployment in the country.
What are the characteristics of poverty?
vi. The poor comprise approximately 21 percent of the population, with about half of
these individuals classified as extremely poor--those unable to afford the cost of a
minimum food basket. The subgroups among the poor include the unemployed, those
with low levels of education, and female-headed households. Programs targeted to these
groups would, therefore, have the biggest impact on poverty reduction. Poor households
are also more likely to be larger, have more children, and have a non-nuclear family
structure than non-poor households.
vii. By geographical area, poverty is evenly divided between urban and rural areas,
though the severity of poverty is worse in urban areas. Almost one-half of the total poor
live in St. George county, with the highest incidence of poverty found in St. Andrew/St.
David county where 35 percent of the population lives below the poverty line. In urban
areas, as is the case in many other Caribbean countries, the economic pressures of the
poor coupled with high youth unemployment, has contributed to growing problems of
crime and drug use. The problem is particularly acute among male youth. As crime and
violence continue to increase, they will have detrimental effects on the economy and
society as a whole.
Do the poor have access to basic services?
viii. Although access to primary education and basic health services by the poor is
high, the quality of these services is generally low. In addition, there are inequities that
put the poor at a further disadvantage. In the education sector, international performance
indicators reflect low educational standards. Inequities begin at an early age with limited
enrollment in preschool by the poor and continue throughout the system with vast
differences in quality by school type, and the tracking system at the secondary level. In
xii
Executive Summary
the health sector, the inequities are less pronounced though major inefficiencies in the
system divert important resources from the provision of quality care. Many health
facilities in the public sector are poorly-staffed or under-staffed and have inadequate
support services. Individuals must wait in long lines, receive prescriptions for drugs that
are not always available, and have few options for treatment of prevalent chronic illnesses.
In both education and health, the poor cannot afford the private costs of additional
important inputs, such as textbooks, medicine and specialized medical treatment, inputs
that ultimately have a positive impact on educational achievement and health status.
ix. In addition to basic social services, there are many safety net programs available to
the poor, though the potential gain from these programs is tempered. The safety net
suffers from the lack of an overall policy framework and lead agency, high administrative
costs, and significant duplication and gaps in coverage. The duplication in benefits gained
by some provides them with a strong disincentive to leave the welfare system, while the
absence of benefits for others leaves them destitute. The largest programs include public
assistance, old age pensions, feeding programs, employment programs, community
development programs and a range of training, and extension and business development
services for the economic rehabilitation of the unemployed.
What are the characteristics of the unemployed?
x. The unemployment rate in 1994 was 18.2 percent of the labor force including a
large proportion of youth, women, and those with low levels of education. When also
including the involuntarily underemployed, the number of those seeking employment
would rise to approximately 25 percent of the labor force. Some of the unemployment,
especially among men, originates in sectors of easy entry (e.g. construction) that also tend
to hire a lot of casual or temporary workers. This is reflected in the relatively short
duration of unemployment for many workers who are in between jobs or are collecting
severance payments.
xi. Though long-term unemployment is not the dominant characteristic of the jobless,
it is a serious problem, particularly among women. There is also some gender
discrimination in the labor market, reflected in differential wages and higher
unemployment rates among women. Gender discrimination is of concern not only in
terms of social equity, but also because it can have serious economic costs for society.
What can be done to address the problems of poverty and unemployment?
xii. A strategy to reduce poverty and unemployment in Trinidad and Tobago will
require several important elements and is largely based on broad evidence from other
developing countries that have been able to achieve rapid and politically sustainable
progress in poverty reduction. The key elements include promoting labor intensive
economic growth and providing basic social services, such as education and health. In
xiii
addition, it is necessary to ensure a social safety net for the poorest individuals until
broad-based growth is realized. All of these elements are mutually reinforcing.
xiii. For Trinidad and Tobago, the five areas of highest priority for pursuing this
poverty reduction strategy include: (i) promoting broad-based, sustainable growth in non-
oil sectors; (ii) improving the functioning of the labor market by reforming specific
administrative interventions to reduce rigidities, distortions and gender discrimination; (iii)
improving both quality and equity in the education sector; (iv) fully supporting health
reform to reduce current inefficiencies while ensuring quality and maintaining equity; and
(v) reforming the safety net so that programs more adequately meet the needs of the poor
without wasting resources.
• Promoting Broad-Based Economic Growth. Overcoming the persistent

unemployment that has characterized the economy for several decades presents a great
challenge and will require diversification of the economic base away from oil/gas to
sectors, such as agriculture, tourism, and small-scale manufacturing. Promoting growth
will also require rebalancing the respective roles of the public and private sector. To
accomplish this development agenda, several priorities have been identified. The first is
reinforcing the macroeconomic environment through maintaining macroeconomic
stability, insulating the economy from oil price volatility, increasing savings and
investment, and promoting a policy agenda for economic diversification and private
sector development. The second priority is improving infrastructure services by gradually
increasing public sector investment in infrastructure, encouraging private sector
participation in the provision of infrastructure, and improving project implementation
capacity through public sector management reform. The third priority involves refocusing
the public sector and strengthening its institutional capacity to facilitate economic
development. These policy reforms must emphasize an export-orientated economy by
continuing trade reform to improve competitiveness and exploit increased world and
hemispheric trade liberalization. Sensitivity analysis indicates that if the economy
sustains an average annual growth rate of 2.5 percent per year from now until the end of
the century, poverty could be reduced from 21 percent to approximately 15 percent from
economic growth alone. Improved targeting of social services would result in further
decreases in poverty.
• Improving the Functioning of the Labor Market. To promote and

maintain the flexibility and competitiveness needed to foster labor-intensive growth while
ensuring adequate standards for the workforce, several aspects of the labor legislation and
administrative processes should be reformed. First, are several changes that would
accelerate and thereby improve the process of dispute settlement by the Ministry of Labor
and the Industrial Court. These changes include limiting the conciliation process to one
round, strengthening the staff in the Ministry of Labor, reducing the incidence of non-
meritorious disputes, establishing time limits for rendering decisions, and ensuring court
impartiality. Second, is the need to evaluate the replacement of the Retrenchment and
Severance Benefits Act with a system of individual savings to promote greater flexibility
xiv
Executive Summary
to the employer. As a result, employers should be more willing to assume risks

associated with production for export as well as to consider more labor-intensive
production techniques as affordable. Third, is the need to reform wage policies with a
single, economy-wide minimum wage equal to the market wage for unskilled labor.
Wage restraint will increase the competitiveness of Trinidadian goods in international
markets and encourage expansion of employment in their production.
Other changes, such as creating a new role for the trade unions and
promoting efforts to reduce gender discrimination, will also have a positive impact on the
functioning of the labor market. As the role of trade unions is changing, it will be
important to constructively channel their concerns through a consultative process to
develop support for policy reforms. Increasing labor force participation rates for women
through improved career counseling for girls, and evaluation of reform regarding the
conditions of maternity leave, will yield future benefits, such as improved social equity,
higher incomes, and an increase in national output.
• Improving Quality and Equity in Education. The recently approved

Education Policy Paper sets forth important recommendations for such improvements.
The successful implementation of these recommendations, however, presents a difficult
challenge. Therefore, full support of this process, including implementation of the Basic
Education Project is essential. Critical areas include: (i) increasing access to early
childhood care and education; (ii) promoting overall improvements in primary education
while reducing the wide gaps that now exist between schools; (iii) revising the selective
testing system to eliminate the distortions and tracking system it currently presents; (iv)
reforming the secondary education system to ensure a quality, basic education for all
through the junior secondary level; (v) introducing additional cost-sharing mechanisms to
reduce the strain that the more elite schools now put on the budget; and (vi) strengthening
the linkages between schools, communities, parents and students. These improvements
will help to ensure that those entering the labor market will have the necessary skills to
compete in an increasingly global economy.
• Promoting Health Reform. The current health sector reform appears to

offer the potential for significant improvements in quality and cost-effectiveness. Savings
from the current inefficient system can be redirected to the poor while more effective
sponsorship and regulation can simultaneously raise quality in the private sector. The
government must therefore provide full support to the reform program. A critical element
is the restructuring of existing institutions--significant resources and commitment must be
given to the restructuring of the Ministry of Health and the establishment of Regional
Health Authorities. The new administrative structure will require the transfer of some
services among sites, as well as a rationalization in the number of sites. This may be
sensitive, particularly through the difficult period of early implementation and thus an
ongoing public information campaign will be important to the success of the reform.
Other important components of health reform include the establishment of an
interministerial committee to initiate and coordinate actions for health promotion and the
xv
development of a comprehensive plan for health financing. Before any significant change
is made to sector financing, issues of equity and the effects on demand should be fully
evaluated.
• Reforming the Social Safety Net. As the characteristics of the poor have
changed over the past decade, the social safety net no longer adequately addresses their
needs. The system is now characterized by duplications and gaps in benefits,
inefficiencies in administration, and a large structural imbalance between the contributory
and non-contributory systems of old-age pensions. The need for comprehensive reform
is evident. This will first require the identification of a lead agency and development of an
overall policy framework to prioritize objectives, programs, and target groups. A policy
framework and clarification of objectives should also be used to rationalize the large
number of existing programs (which are often duplicative) as well as the administrative
structure overseeing these programs. The current fragmentation in administration affects
the efficiency of the system. Programs also need to be redesigned to provide more
rehabilitative services rather than grant transfers, to assist people in gaining new skills,
raising self-esteem and learning important coping skills. These inputs will assist
individuals in preparing for re-entry to the labor force. Through the establishment of a
monitoring system, a more coordinated effort can be made to ensure that benefits are
reaching the desired target groups and that there is equity in access to services.
As part of this reform, there is an increasing role for NGOs in the delivery
of services. Many NGOs have the advantage of being close to the communities and have
no large bureaucratic structure associated with inefficient delivery systems. Any
expansion in their role will, however, require strengthening the capacity of many NGOs to
implement poverty reduction programs. The most evident weaknesses lie in the area of
management, administration and organization. This could be addressed by creating a
networking organization to coordinate activity, and providing appropriate training for
NGO staff. To ensure the legitimacy and implementation capacity of NGOs in the
delivery of services, some accreditation process should be established and maintained
through periodic evaluation.
How can the poverty reduction efforts in Trinidad and Tobago be sustained?
xiv. Any programs and policies aimed at reducing poverty and unemployment will
require a strong commitment from the Government of Trinidad and Tobago, local
communities, NGOs, the private sector, and the international community. The
government must take a lead role in implementing a poverty reduction program through
ensuring that it maintains a macroeconomic and incentive framework conducive to private
sector-led growth, refocuses the role of the public sector, supports the improvement of
infrastructure, and supports the reforms in health, education, and the social safety net.
The gains in efficiency achieved through reform will ensure the financial sustainability of
these improvements.
xvi
Executive Summary
xv. NGOs, community groups, and individuals will need to participate more actively
in poverty reduction efforts as the role of the public sector shifts. Community
involvement is particularly important in that it builds commitment and leads to greater
sustainability. This participation can be fostered through information sharing,
consultation, and decision making at the local level.
xvi. International agencies can assist by continuing to work closely with government
on implementing their development strategy. Key areas that have been identified include
infrastructure development, public sector strengthening, human resource development,
and environmental sustainability.
xvii. Finally, implementing these policies will require a stronger information base to be
able to monitor and evaluate key poverty problems over time and formulate strategies to
address them. The shrinking resources provided to the Central Statistical Office has
meant both a decline in the amount of information collected, as well as a lag in analyzing
information that does exist. Ensuring the collection and analysis of data such as the
Survey of Living Conditions on a regular basis, will provide policy makers with an
important tool for decision making. This could be achieved through institutionalizing a
collaborative effort between agencies such as the Ministry of Planning and the Central
Statistical Office.
xvii
1
A profile of the poor
Trends in poverty and unemployment
1. Since the early 1960’s, Trinidad and Tobago’s economy has been characterized by
its heavy dependence on the production and export of petroleum and gas. Oil windfalls
between 1973 and 1982 brought rises in income, investments in physical infrastructure
and improvements in living conditions. Per capita GNP rose to US$6,600 per annum in
1982, placing Trinidad well into the ranks of the middle income countries. As
international oil prices declined during the 1980’s, the economy experienced a sharp
contraction with an average annual decline of 4.5 percent between 1982-1989. During this
period, per capita GNP dropped to US$3,160 in 1989, unemployment rose sharply, the
quality of services declined gradually, and there was a steady flow of emigration to North
America.
2. The available data indicate an increase in the levels of poverty during this period.1
Teekens (1990) estimated that absolute poverty increased from 3.5 percent of households
in 1981 to 14.8 percent of households in 1988.2 Those who had traditionally been
included among the poor--the old, persons with disabilities and female-headed
households, were joined by those who became unemployed during the mid-eighties. The
distribution of income widened slightly during this period with the Gini coefficient3
increasing from .45 in 1981/82 to .47 in 1988.4
3. In 1988, the Government of Trinidad and Tobago underwent an adjustment

program that focused on improving the fiscal situation by reducing public sector
expenditures (including a reduction in employment), introducing tax reform, restructuring
and divesting public enterprises, increasing public utilities’ tariffs, rescheduling debt
repayments, liberalizing exchange and trade controls, and improving the incentive
framework. Despite a slow start, the country has moved forward in its economic reform
1
The earliest estimate of poverty is from 1975. At that time, 25% of the population was classified as
poor, although the measure did not include housing. See Ralph Henry and Juliette Melville, 1989, “Poverty
Revisited.”
2
See Teekens, R. “Poverty data from Two Family Budget Surveys in Trinidad and Tobago, 1989. This
analysis was based on household expenditure data.
3
The Gini coefficient is an index representing inequality in the distribution of welfare. The Gini
coefficient which ranges from 0 to 1, increases as the distribution of income becomes more skewed.
4
See Henry, R. and Melville, J. 1989 and Teekens, 1989.
1
program though economic growth has been tempered due to the continued vulnerability
of the economy to world oil prices. Per capita GNP has risen only slightly to US$3,695 in
1994.
4. It is difficult to measure the impact of these macroeconomic changes on the

welfare of the population. However, particular policies, such as those affecting the labor
market, value of real wages, and decline in expenditures, have likely resulted in a decline
in living standards for some. One estimate of poverty indicates an increase from 18.5
percent of households in 1988 to 22.5 percent in 19925, with a further widening in the
distribution of income.
5. The increase in poverty in Trinidad and Tobago has been closely linked to an
increase in unemployment. In 1982, unemployment was estimated at 10 percent. In
1992, that figure had nearly doubled to 20 percent.6 Most of the jobs lost during this
period were in the construction, manufacturing and public sectors. Some of the
retrenched workers found employment, largely in the informal sector, in community and
personal services, wholesale and retail trade, tourism, and to a lesser extent, agriculture.
Many others, however, have remained unemployed and have given rise to a group of
“new poor,” individuals unable to find gainful employment to support themselves and
their families.
6. While it is impossible to precisely measure the increase in poverty over the past
decade in Trinidad and Tobago due to the lack of consistent data, the trend is clear: the
economic decline of the 1980’s, the resulting rise in unemployment, and the more recent
retrenchment of workers in both the public and private sector has resulted in an increase
in poverty in the country.
Living standards today
7. The most recently available household survey data (Survey of Living Conditions
SLC, 1992) was used to measure living standards among the population. The SLC was
carried out on a national basis incorporating information from approximately 1,450
households or 6200 individuals.7 The survey includes data on household composition,
employment, income, expenditure, education, and health. While the data are useful in
5
Henry and Melville, 1989.
6
Some of the sharp increase in unemployment in the late 1980s is due to the adoption of a broader
definition of unemployment in the Labor Force Survey, and an increase in the labor force. The increase in
unemployment also masks some of the year-to-year variations. In 1987, unemployment rose to a high of 22
percent. As economic activity recovered following a comprehensive adjustment program in 1988,
unemployment fell to 18.5 % in 1991 and then rose again to 19.8% in 1993. It should also be noted that
some countries use the job seeking rate to classify unemployment. In Trinidad and Tobago, the job seeking
rate was approximately 13% in 1993. See Annex IV for discussion.
7
The original sample included 1689 households although a total of 236 households were removed
from the sample because data were incomplete or inconsistent. The district representation of the final
sample, containing 1453 households has been compared with data from the census and was found to be
representative.
2
1 A profile for the poor
providing a snapshot of poverty, future data collection efforts are recommended to enable
ongoing monitoring and evaluation of poverty reduction programs and policies.
Figure 1: Trends in Per Capita GDP and Unemployment
150
Unemployment
Index 1985=100 130
110
90
70 Per Capita GDP
50
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
8. Household consumption8 provides a basis for measuring welfare. This, rather
than income, is widely accepted as a more appropriate measure.9 Mean household
consumption in Trinidad and Tobago is estimated at TT$24,800 (US$5,835), while average
per capita consumption was TT$5,790 (US$1,362) in 1992. These figures are somewhat
underestimated because the consumption aggregate does not include expenditures on
consumer durables, such as household appliances, furniture, vehicles, utensils, etc., which
are significant in Trinidad and Tobago. These items were excluded from the household
consumption variable because they provide a flow of services over a period of time. Due
to limitations in the data set, it is not possible to calculate a “use value” that would more
accurately measure true household consumption. (see Annex I). In addition,
expenditures on taxes, insurance, and some financial transactions were not included in the
household consumption variable because they do not directly contribute to economic
welfare.
9. The inequality in the distribution of welfare in Trinidad and Tobago is similar to

the pattern in other countries in the region. In 1992, the Gini coefficient was calculated at
.42.10 This corresponds closely to the ratio in Jamaica (.43) and Guyana (.42) and is
8
The household consumption variable includes the total value of household expenditures on various
foods and non-foods such as schooling, medicine, clothing, transportation, housing, etc. It also includes an
imputed value for foods consumed from “home production” and received as gifts or payments in-kind. See
Annex I for further discussion.
9
Consumption rather than income is used for several reasons. First, it is difficult to measure the
income of those working in the informal sector, self-employed workers, and those who receive in-kind
payments, such as food or housing. Second, survey respondents regard questions about consumption as less
sensitive than questions about income and thus are likely to be more accurate. Finally, consumption is
considered to more accurately represent long-term welfare because income may fluctuate over short periods.
(see Annex I)
10
This estimate is based on per capita consumption and thus is not comparable to the previous estimates
that were based on household income.
3
substantially lower than the regional average for Latin America and the Caribbean
(LAC).11 The total share of welfare for the bottom twenty percent of the population was
5.6 percent for Trinidad compared with the LAC regional average of 4.0 percent.
10. To calculate the extent of poverty in the country, there are several possible poverty
lines that can be constructed.12 In deriving the poverty line used in this report, the
intention was to identify a standard measure to compare levels of poverty across
subgroups of the population rather than to identify a single unequivocal number. A
commonly accepted methodology 13 was used that classified extreme poverty as the
average price of a minimum low-cost food basket for a 2400 calorie diet collected during
the time of the survey (TT$4.90, US$1.15 per person, per day).14 Poverty was defined at
TT$6.60 (US$1.56) per person, per day (or TT$2,420 per person, per year based on
May/June 1992 prices) by adding an allowance for basic non-food goods to the extreme
poverty line using information on the consumption patterns of the poor from the 1992
SLC.
11. Nationally, 21 percent of the population, or roughly 265,000 people fall below the
TT$2,420 poverty line. Eleven percent of the population would be classified as extremely
poor, with consumption levels below the minimum amount required to purchase the
nutritionally balanced low-cost food basket. The shortfall in per-capita expenditures from
the poverty line (poverty gap) is around 7 percent, and the severity of poverty as
measured by the P2 measure is 3.7 percent (see Annex II for explanation of poverty
measures).
The characteristics of the poor
12. The main characteristics of poor households are related to employment status,
educational achievement, size, gender and family structure. Levels of poverty are higher
than average in households where the head is either unemployed or has never worked,
where the head has a less than secondary school education, and in female headed
households. Poor households are more likely to be larger, have more children, and to
have a non-nuclear family structure than non-poor households. Other characteristics,
11
A regional average using available household survey data from 18 countries was estimated at .50 for
data circa 1989. See World Bank, 1993, Poverty and Income Distribution in Latin America: The Story of
the 1980’s.
12
Two poverty studies have been carried out by the GOTT; one by the Ministry of Planning and one by
the Ministry of Social Development. These studies have not yet been made available to the public and thus
comparisons with the poverty lines used are not possible.
13
The Orshansky method (Orshansky, 1965, “Counting the Poor: Another Look at the Poverty Profile,”
Social Security Bulletin Vol. 28, 1965, pp:3-29.), follows the technique used to measure poverty in the
USA. The main critique of the methodology is that the minimum cost of the reference food bundle at
prevailing prices may entail a diet which is unacceptable to palate and/or culture. In reviewing those items
selected in the CFNI food basket for Trinidad and Tobago, all are common to local preferences. This
methodology was also used to measure poverty in Jamaica and Guyana in two recent reports. See World
Bank, 1994, Guyana: Strategies for Reducing Poverty, Report No. 12861-GUA, and Jamaica: A Strategy
for Growth and Poverty Reduction, Report No. 12702-JM.
14
See Annex III for contents of the food basket. These measures refer to 1992 prices.
4
such as geographical location and ethnicity, are also important for further understanding
the nature of poverty in Trinidad and Tobago.
Table 1.1: Characteristics of poor households, 1992

Household (HH) Characteristics Per Capita Consumption Quintiles1
All Poorest
T&T Q1 Q2 Q3 Q4 Q5
Area
Urban (%) 44 49 37 44 39 47
Rural (%) 56 51 63 56 61 53
Female Headed HH (%) 27 36 27 28 22 22
Age of HH Head (mean) 49 47 49 49 49 49
HH Size (mean) 4.2 6.1 5.2 4.3 4.0 3.0
No. of Children (<16, m) 1.4 2.5 1.8 1.3 1.1 0.6
Highest Educational Level:
Primary 64 78 76 74 62 46
Junior Secondary 1 2 1 1 1 0.3
Trade/Vocational 5 6 3 3 6 5
Secondary 22 12 18 19 23 30
Post-Secondary 4 2 1 3 5 7
University 4 0.5 1 0.4 3 12
Total 100.0 100.0 100.0 100.0 100.0 100.0
Labor Force Participation
Rate 60.2 57.1 56.4 56.0 61.1 68.5
(for individuals)
Unemployment Rate
(for individuals) 20.8 36.2 32.6 21.8 16.3 10.3
Employment within the HH:
No. of Workers/HH 1.3 1.2 1.3 1.2 1.4 1.4
No. of Unemployed/HH 0.5 0.8 0.7 0.4 0.4 0.2
HH Expenditure TT$ (mean) 27,386 9,830 15,73 19,14 26,23 40,179
7 9 2
Source: 1992 Survey of Living Conditions, N=1450 households, 6220 individuals.
1
Quintiles were constructed using the per capita household consumption measure. Quintile 1 represents the
poorest 20% of the population while quintile 5 represents the wealthiest 20%.
Geographical
13. On the whole, the incidence of poverty is slightly higher in urban areas (24% vs.
20%) though the poor are roughly distributed evenly between the urban and rural sector.
This pattern is contrary to most developing countries where levels of poverty are generally
higher in rural areas. The small differences between areas in Trinidad and Tobago can be
attributed to (i) the fact that income differentials are not that great: rural areas in Trinidad
and Tobago are not highly agricultural and thus follow a similar employment pattern to
urban areas, and (ii) due to the classification system used within administrative areas by
the Central Statistical Office.15
15
For example Caroni county is classified as rural though with the development of the Pt. Lisas
Industrial Estate and other forms of commercialization, County Caroni has increasingly become urbanized.
5
14. The highest incidence of poverty is found in St. Andrew/St. David county where
35 percent of the population is poor. Almost one-half of the total poor (42 percent) live in
St. George county, the most populated county in the country. The severity of poverty is
worst in St. Andrew and St. George counties. While the levels of poverty in Port of Spain
are lower than the national average at 13.4 percent, all of these individuals are classified as
extremely poor.
15. Despite significant movement between urban and rural areas over the past decade,
the urban/rural ratio in the country has not changed substantially.16 Urban areas
incorporate the two largest cities, Port of Spain and San Fernando, as well as St. George
county surrounding Port of Spain.17 St. George county grew the most over the past
decade and now is largely urbanized. The most rural areas are found in the Eastern
Counties of Victoria, St. Patrick and parts of Caroni. The shifts in the population have
resulted from a migration from rural to urban areas because of the perceived harsher living
conditions in rural areas and hopes for employment in the cities. Some flows to rural
areas also occurred as there was a return to the land at the onset of the economic decline.
Many, however, did not succeed with agricultural activities due to the absence of
infrastructure, loss of technological know-how, and the spread of larceny.
16. In rural areas the poor are, on the whole, slightly less likely to be unemployed
than individuals in urban areas. Labor force participation rates for women are, however,
substantially lower, somewhat accounting for the average lower welfare levels in rural
areas. The largest proportion of the rural population are employed as workers in low skill
occupations, such as crafts, plant machine operators, agriculture and elementary
occupations. Access to higher level social services, such as secondary education and
tertiary health facilities, are slightly lower in rural areas (see Chapter 4).
17. The urban poor in Trinidad and Tobago primarily live in the Port of Spain area
and in San Fernando. Housing density is high and thus overcrowding is a problem in
some poor households. Many of the urban poor, particularly in Port of Spain, live as
squatters in the hillsides to the north and west of the city and eastward along the east-west
corridor. The hillside settlements are increasingly a matter of concern due to the problems
of erosion and rises in silting, pollution and flood damage in the south-flowing river
valley, and secondly, because of the costliness of providing infrastructure and services on
the steeply-sloping hillsides once these plots are regularized.18 Unemployment rates in
these areas are very high, leaving many, particularly male youth, with large amounts of
16
An urban/rural ratio using the 1990 classification of administrative areas was .47/.53 in 1980 and
.48/.52 in 1990. Another classification used five criteria to define rural: more than 10% of the labor force
engaged in agriculture; more than 50% of the population having only primary school education; less than
70% of the dwellings with electricity; low population density; and the absence of major public
administrative services. Using this classification, the urban/rural ratio was .64/.36 and .68/.32.
17
Many of the other administrative areas that are classified by the CSO as rural, do contain some
urbanized areas.
18
See Glenn, J. R. Labossiere and J. Wolfe, “Squatter Regularization: Problems and Prospect, A Case
Study from Trinidad” in TWPR, 15,3, 1993.
6
unoccupied time on their hands. This has led to increased drug use, crime and violence.
The number of reported serious crimes has more than doubled in the past decade with the
largest proportion in urban areas.19
Gender and family composition
18. The larger household size among the poor is closely related to higher numbers of
children, indicating that income-earners in poor families must support more people. Poor
households have approximately 6.1 persons compared with 3.9 persons in non-poor
households. A larger proportion of poor households also have a non-nuclear family
structure comprised of single parent families (mostly female-headed), or households with
non-family members.
19. Approximately one-quarter of households are headed by females with the

prevalence of female headship somewhat higher in urban areas (32 percent). Female-
headed households have, on average, 3.8 persons in the household which is slightly lower
than the national average of 4.2. The incidence of poverty among these households is
high, at 31 percent. This can be largely accounted for by the lower labor force
participation rates, high unemployment, and lower wages among women. In addition,
women in female headed households have child care responsibilities, which presents a
time constraint that limits their availability for income-generating activities.
20. In several other Caribbean countries20, the incidence of poverty among female-
headed households is actually the same or lower than the national average. This is,
among other factors, due to the high level of international remittances from abroad. In
Trinidad and Tobago, the level of remittances is generally lower. Only seven percent of
female-headed households receive some remittances from relatives overseas.
21. A final important finding regarding female-headed households (based on probit

models, see Annex V) is that the receipt of welfare does not appear to provide a
disincentive to labor force participation as was the case with males. This supports the
existing targeting criteria of several programs which are designed to benefit female-headed
households (see Chapter 5 for further discussion).
Ethnicity
22. The population in Trinidad and Tobago is ethnically mixed with approximately 40
percent each of African and East Indian descent, followed by those of mixed descent (18
percent).21 The Afro-Trinidadian population has traditionally lived in urban areas and are
employed in the public sector, while Indo-Trinidadians have been located in the sugar
19
In 1993 these crimes included 111 murders, 2,743 larcenies, and 8,419 break-ins, and 1,080 drug-
related crimes according to data collected by the Office of the Police.
20
For example, Jamaica and Guyana.
21
1990 Census of the Population, Central Statistical Office.
7
producing areas of rural southern and central Trinidad and are largely employed in
business and agriculture. The incidence of poverty is highest in households headed by
persons of mixed race (27.4), followed by households headed by Afro-Trinidadians
(24.8), and Indo-Trinidadians (17.4). Unemployment rates across ethnic groups also
follow a similar pattern.
Education
23. The educational attainment of heads of household differed enormously by

expenditure quintile. For example, only 22.4 percent of household heads in the poorest
quintile had post-primary education while 54 percent of those in the wealthiest quintile
continued on to complete higher levels of education (Table 1.1). As education has a
strong correlation with earnings and intergenerational mobility, this explains lower
income levels among the poor (see Chapter 2). It also explains, to some extent, why
educational attainment, on the whole, is lower for children from poor households. In
addition, some families may find it more cost-effective for their children to work (at either
informal or formal sector activities) rather than attend school. Jules (1994)22 shows that
the mean scores on the Common Entrance Exam (CEE, age 10) for students whose
parents were unemployed were approximately 55, whereas scores of students from
middle class families were in the range of 65, and for students from upper class families,
approximately 77.
Employment
24. While labor force participation rates are only slightly lower for the poor than the
non-poor, unemployment rates differ substantially.23 In comparison with a national
unemployment rate of 20.8 percent in 1992, among the poor that rate is as high as 36
percent. Within the household, the poor have more than twice the number of
unemployed members compared to non-poor households (0.81 to 0.38).
25. Of those in poor households who are employed, approximately half work in the
private formal sector, 30 percent work in the informal sector, and the remainder in the
public sector (see table 72). The employed poor tend to work as craftsmen, or in low
paying elementary occupations. When exploring the relationship between the human
capital base of households, the employment status of their members, and households’
demographic composition, poor households are found to have more persons in the
22
Jules, Vena, A Study of the Secondary School Population in Trinidad and Tobago: Placement
Patterns and Practices, A Research Report. The Center for Ethnic Studies, University of West Indies, St.
Augustine Campus, 1994. The income levels used in the study were self-reported.
23
The labor force participation rate is the ratio of the total labor force (employed and unemployed) over
the total non-institutional population 15 years and older. Unemployment is defined by labor force
participants who have not worked during the survey week but were looking for work and individuals who
did not look for work last week because they were discouraged or because they knew of no vacancies. Note
that this is substantially higher than the job seeking rate which is used in many countries to measure
unemployment. See Annexes IV and V for further definition of the SLC and characteristics of the labor
force, and Labor Force Report, Central Statistical Office, 1992 for definitions.
8
highest unemployment age group (19 to 24), more of their 25 to 54 old males not
working, more women in this age group out of the labor force, and somewhat lower
educational attainment among adults. These and other issues related to the characteristics
of the labor force are discussed in further detail in Chapter 2.
9
Figure 2: Unemployment by Expenditure Group
40
35
30
25
Unemployment
Rate 20
15
10
5
0
1 2 3 4 5 All T and T
Quintile
Income and expenditure patterns
26. In poor households, expenditures on food, housing, and education account for the
largest share of total expenditures. As a result, the share of expenditures on other items
such as transportation, recreation, clothing and medical expenses is much lower than in
wealthier households. Declines in the share of schooling expenses probably have more to
do with the age composition of households than income elasticities, while the higher
share of medical expenses for wealthier households is probably more closely related to
choice of health care facilities (public vs. private) rather than poorer health status or older
age composition.
27. The level of food consumption of meat and dairy products is high, even for the
poorest 20 percent of the population, indicating that nutrient inadequacy was not a major
issue in Trinidad and Tobago at that time. However, since the 1992 survey, it is thought
that there may have been some increases in malnutrition as food prices have increased.
Another interesting feature of poor households in Trinidad is the high level of ownership
of certain durable goods--among the poorest quintile, 29 percent own sewing machines,
46 percent own radios, and 73 percent own televisions. Some of these items may have
been purchased during the oil-boom years when levels of poverty were significantly
lower.
28. While a substantial proportion (54%) of households produce at least some of their
own food, the value relative to total food consumption is small. The average share of the
total food budget coming from home grown sources is approximately 5 percent. For the
poor, this share is much higher at 10 percent. Of the 45 percent of poor households
which do produce some of their own food, the imputed value accounts for roughly 18
percent of the total food budget. This would indicate that for some, home grown
production does help to provide for the household.
10
29. In many Caribbean countries remittances, usually from relatives living in other
countries, form a large proportion of household incomes. Because they are less
influenced by economic downturns in the national economy, they provide an important
buffer during difficult economic times. In the case of Trinidad and Tobago, the level of
remittances appears to be relatively low. Only 12 percent of households overall received
some type of remittance, though this number was twice as high for poor households.
There may be some under-estimation in these numbers due to the sensitive nature of the
question as perceived by respondents. The majority of remittances come from children
compared to other sources, such as relatives and friends.
Housing, water and sewage
30. The available information on access to housing, water and sewage indicates that
the poor in Trinidad and Tobago are more likely than the non-poor, to live in overcrowded
and unhealthy conditions. Poor households have a higher occupational density, are less
likely to have toilet facilities connected to the sewage system, more likely to draw water
from public standpipes, and obtain water on a less frequent basis.
31. On the whole, the water and sewerage sector in Trinidad and Tobago is in a state
of disrepair that affects service quality. The government is currently reforming the sector
with the assistance of the World Bank aimed at strengthening water resources
management, supporting the introduction of private sector management in WASA, and
preparing a drainage and flood control project. While overall improvements will
ultimately benefit the poor, every effort should be made to target poor areas to mitigate
any further environmental and health risks for these vulnerable groups.
Crime and violence
32. The increase in economic pressures on society have likely been a contributing
factor to the increase in crime and violence in Trinidad and Tobago. Other factors, such
as the rise in drug use and drug trafficking, high rates of youth unemployment, increased
exposure to violence through television, the breakdown of the traditional family structure
and communities have also contributed to the rise in violence.
33. The existence of crime can potentially be a deterrent to investment by imposing

heavy costs and by increasing the risk of loss of life or injury to all who own, manage, or
work in enterprises that have a high incidence of robbery. The threat to personal freedom
could also motivate individuals with skills and capital to migrate, further exacerbating
economic problems.
34. Of particular concern is male youth, which is the most common perpetrator of
criminal activity. Programs targeted at this group could, therefore, have the most impact
on preventing future increases in crime and violence. Such interventions include: teaching
conflict resolution at school, strengthening community-school linkages, and youth
leadership programs.
11
2
The labor market
35. The principal cause of high unemployment in Trinidad and Tobago is related to
the economy’s heavy reliance on the capital-intensive petroleum sector. Along with the
economic decline of the 1980s, labor market conditions have deteriorated. A shrinking
economy in the face of an expanding labor force has led to slow growth of employment
in the formal sector and rising unemployment, especially among youth and new entrants
to the labor force. The more recent retrenchments of redundant workers in both the
public and private sector have also added to the ranks of the unemployed which are now
estimated at approximately 18.2 percent (the job seeking rate used to measure
unemployment in many countries is approximately 13 percent).24 The close linkage
between poverty and unemployment in Trinidad and Tobago was discussed in Chapter 1;
this chapter will focus on the salient characteristics of the labor force, as well as the
institutional and legislative aspects of the labor market which affect unemployment.
These issues are currently being reviewed in Trinidad and Tobago by a tripartite
consultative committee that seeks to set forth a set of viable recommendations.
Background
36. High unemployment is not a new phenomenon in Trinidad and Tobago. In 1973,
at the threshold of the oil bonanza, the unemployment rate stood at 15.4 percent of the
labor force, with youth unemployment as high as 28 percent for men and 36 percent for
women.25 Even during the height of the bonanza, the unemployment rate did not fall
substantially below 10 percent. More than half of the increase in employment between
1975 and 1982 was in the construction sector, reflecting expanding investment in the
energy sector and in infrastructure. Government employment also expanded substantially
during this period. Both of these sources of job gains were heavily dependent on the flow
of oil revenues and in sectors that were not sustainable. Much of the investment
expenditures of the boom years did not lead to the creation of significant numbers of
permanent employment in the goods-producing sectors. It is, therefore, not surprising
that the sharp decline in oil revenues which began in 1983 had a negative impact on
employment conditions.
24
This is for 1994, Central Statistical Office, Labor Force Survey. Note that the disaggregated analysis
in Chapters 1 and 2 uses the 1992 SLC, thus explaining the discrepency between the current unemployment
rate of 18.2 percent (LFS) and the 1992 unemployment rate of 20.8 percent (SLC).
25
Between the ages of 15-19.
13
37. Between 1982 and 1989, total measured net employment declined by more than
33,000 jobs. The construction sector alone lost 35,000 jobs, manufacturing suffered a
decline of close to 15,000 jobs, and the public sector contracted by 4,500 employees.
Significant increases in employment occurred only in the service sector (15,000 jobs) and
in agriculture (11,000). In view of the decline in government revenues, the public sector
was no longer in a position to continue the absorption of the growing labor force as it had
done during the boom years. Beginning in 1990, the decline in employment was reversed,
which has led to a modest reduction in the amount of measured unemployment. Figure
1.1 (Chapter 1) illustrates the trend in unemployment rates in Trinidad and Tobago.
38. The 1980s also saw a substantial redistribution of income to the organized sectors
of the economy. While 25 percent of industries26 reported increases in earnings of
production workers between 1982 and 1988, 20 percent report substantial declines in
excess of 30 percent (see Statistical Appendix, Table 82). By the end of the decade, the
deepening economic crisis began to be reflected in the course of wages in the organized
sector; in 1987 public sector Cost of Living Adjustments (COLA) were suspended, and in
1989, a 10 percent wage decrease was introduced (which lasted until 1991).27 The
restraint on wage increases resulted in a sharp decline in the rate of nominal wage increase
between 1988 and 1993. No industrial sector succeeded in maintaining or advancing the
real wages of its employees on average over this period, though these workers fared better
on the whole than those in the unorganized sectors of the economy.
Government policies and programs to reduce unemployment
39. The government has responded to the high unemployment through a number of
employment relief and training programs, such as YTEPP, the Civilian Conservation
Corps, National Apprenticeship Program, Business Skills, Entrepreneurial Development
Program, technical and vocational training, and the Unemployment Relief Program. The
effectiveness of these programs is discussed in more detail in Chapter 5. While the
programs provide trainees with some preparation for the labor market, postpone entry
into the labor market for youths, and provide an income transfer for the unemployed,
they will not reduce overall unemployment. Policies that promote the demand for labor
must simultaneously be implemented in order to absorb a larger proportion of the labor
force.
26
These include 35 establishments for which the Central Statistical Office collects data on earnings.
27
The freeze on COLAs was introduced in 1987 and then reversed by the Industrial court. In 1989 a 10
percent wage decrease was introduced but restored in 1991. A 2 percent general wage increase was granted
in 1992 and the COLA was reinstated in conformity with the Court’s ruling, though the accumulated areas
have yet to be paid. The size of the arrears is very substantial, approximately 7 percent of the 1991 GDP. In
the private sector, the almost universal COLA in collective bargaining agreements has been giving way to a
“buyout” by employers. That is, employers are successfully substituting a fixed cash wage supplement in
return for the abandonment of the COLA.
14
2 The labor market
40. On the policy side, the Government has adopted a number of measures that are
designed to address the longer-term need for employment creation. Tax exemptions are
offered to commercial banks of up to 50 percent of the interest earned on small
businesses and agricultural enterprises that lead to the creation of employment
opportunities. An incremental profits tax is also being put in place, where the tax on the
profits subject to taxes that exceed the level of “base year” profits will be at a lower rate.
Local investment in the tourism sector is being encouraged by allowing local investors to
claim 25 percent of their equity investment as a tax deductible expense. In the
construction sector, exemptions are granted from personal and corporate income taxes on
all rental incomes from properties constructed after January 1993. The Government has
also introduced measures to speed up the implementation of major public and private
sector construction projects.
41. A final initiative has been proposals to increase the number of labor exchanges
(now five) to provide entrants into the labor force with information on employment
opportunities in different economic sectors and occupational categories. In the current
environment of surplus labor, it does not appear that any expansion of this program
would be an effective use of resources. With the exception of a few skilled areas,
employers are currently swamped with applicants and have a large pool from which they
can find qualified workers. Less than two percent of the active job seekers report
registering with the labor exchange.28 During 1993, only 13.5 percent of the 4,394
registered job seekers were placed through the program.29
Characteristics of the labor force
Labor force participation
42. The overall labor force participation rate in Trinidad and Tobago is now just above
60 percent30, similar to the average for middle income countries.31 Though the aggregate
rate has been relatively constant, it represents a decline for men from a peak rate 83
percent in 1983 to 76 percent in 1993, and an increase for women from 38 to 45 percent.
28
Source: Central Statistical Office.
29
Source: Ministry of Labor, Manpower and Employment Division.
30
The estimate is based on both the most recent Labor Force Survey (1994), and data from the SLC.
The SLC was used for the analysis by subgroups, and the participation functions in this section. Some of the
breakdowns differ slightly from the LFS due to the small number of observations in the SLC. A labor force
participant refers to all persons over the age of 15 engaged in, or willing and able to be engaged in the
production of economic goods and services. These include employees, as well as employers and the self-
employed in the formal and informal sectors. Unemployment (using the SLC) refers to labor force
participants who have not worked during the survey week but were looking for work. Individuals who did
not look for work due to reasons of discouragement or because they knew of no vacancies were also
included. See Annex IV and V for further discussion.
31
The average for Labor Force Participation was 60 percent in middle income economies, World
Development Report, 1995, forthcoming, The World Bank, Washington, D.C..
15
While the increase in female participation follows a global trend32, the decrease for men is
of concern. The decline can be attributed to several factors: (i) some of those who
reported being non-participants actually did earn income from non-formal jobs and thus
do not perceive themselves as part of the labor force, (ii) male youth are staying in school
longer or entering training programs, and (iii) with the existence of high unemployment
rates workers become discouraged as they cannot find jobs easily and hence choose to
drop out of the labor force.
43. Lower female participation rates in Trinidad and Tobago can be attributed to
household responsibilities, low levels of education, difficulties in finding employment in
an economy that is not expanding, and socio-cultural factors. Many Indo-Trinidadian
women, particularly in rural areas, have maintained traditional roles and do not work
outside the home. The importance of these and other factors on a woman’s probability of
participating in the labor force in Trinidad and Tobago were analyzed.33 Among the
findings: women in rural areas, Indo-Trinidadian women, those with a greater number of
young children in the household, women with low levels of education, and those whose
spouse did not work were less likely to participate in the labor force (see Annex V for
discussion, statistical appendix for results).
44. Over 55 percent of the economically active population have not obtained any
secondary level educational qualifications.34 As participation rates generally tend to rise
by levels of education, it is not surprising that both males and females in Trinidad and
Tobago who have passed secondary school O-Levels (age 16) tend to participate at a
higher rate. These individuals are most likely to work in "middle" occupation categories35
for which there seems to be the most demand (see Annex V). Individuals with advanced
A-Levels (age 18) and diplomas also tend to have high labor force participation rates.
Higher participation rates at middle levels of education may also be related to the fact that
rates of return to education seem to be the highest for students with O-Level passes (see
wages section).
45. A large number of households, approximately 12 percent, have no labor force

participants. An even greater proportion of households, 22 percent, have no workers.36
Most households have one worker (57 percent), with 34 percent having at least two
32
As education levels have women have increased, the value of their time spent in employment has
increased relative to time spent in household activities and, thus, has spurred increased participation in
market activity.
33
A participation function was run using the individuals’ participation in the labor market as the
dependent variable, controlling for household characteristics (size, number of children, number of working
adults, if the spouse works, household non-labor income) and individual characteristics (years of education,
experience in the labor force, area of residence, race and whether the individual is head of the household), as
well as labor market variables that proxy for the conditions of the local labor market (regional
unemployment rates and labor incomes).
34
These refer to the secondary level CXC, O-level, and A-level exams.
35
These individuals are neither highly skilled nor totally unskilled.
36
Households with labor market participants and no workers have unemployed participants.
16
2 The labor market
workers. 37 In households with at least one informal sector worker, it is common to find
a worker employed in the formal sector. This is a pattern common to many developing
economies in households with multiple workers. There are significant advantages in that
households can augment their incomes with informal sector work, while the informal
sector workers have flexibility in hours of work and at the same time enjoy all the benefits
(health, housing, etc.) because of their formal sector links.
Employment
46. Over 75 percent of all workers are employed in the formal sector38 with 42 percent
of those individuals in the private formal sector and 33 percent in the public sector.39 The
remainder of the labor force is employed in the informal sector, with a significant portion
of these being own-account (self-employed) workers. By industrial group, the largest
proportion of the employed, 45 percent work in the service sector40, followed by 16
percent in construction. The occupational breakdown shows that approximately one-
third of the labor force is employed in elementary unskilled occupations, 16 percent as
craftspersons, and 13 percent as service workers.
47. In the private formal sector, two-thirds of males work as craftsmen, machine
operators or in elementary occupations. The majority of women (80%) are employed as
clerks, service workers, or in elementary occupations. In the public sector, approximately
one half of males are either employed in elementary occupations or service workers and
over 80 percent of females work as technicians, clerks, or as elementary workers.
Informal sector workers are involved in personal services, artisan and craft production
and small business. Only a very small proportion of the labor force, less than 5 percent, is
employed in the agriculture sector. As the country is not heavily based in agriculture,
occupations are not significantly different in urban and rural areas (Annex V).
48. Both men and women tend to work roughly uniform hours 41 with those who are
small scale employers in the informal sector working the longest hours (see Statistical
Appendix, Table 56). In many countries, individuals work more than one job, often in the
informal sector, to increase household income. In Trinidad and Tobago, though
“moonlighting” does exist, only a small number report having a second job; less than 3
37
22.5 percent of households had two workers, 7.1 percent had 3 workers and four percent of had more
than three workers.
38
Employment in the formal sector is 74% for men and 83% for women.
39
Public sector employment includes statutory bodies, government state enterprises, and central or local
government. Employees in the private formal sector belong to private enterprises while the informal sector
is defined as those classified as unpaid workers, learners/apprentices, own account workers and small-scale
employers.
40
This includes 28% in community, social and personal services, and 17% in wholesale and retail trade,
restaurants, and hotels.
41
These results are likely to be biased as the questionnaire categorizes hours worked per week. We have
converted this categorical ordering into actual hours worked by assuming that: 0= 0 hours, Under 1= 1
hours, 1-8=6 hours, 9-16=14 hours, 17-24=22 hours, 25-32=30 hours, 33-40=38 hours, 41-50=48 hours,
51-60=58 hours, 61-70=68 hours, and over 71=75 hours.
17
percent of men and close to zero percent of women. This may be due to the following: (i)
it is not permitted in the public sector; (ii) there is an under-representation in reporting of
the true extent of moonlighting; and iii) a reflection of the high unemployment rate in the
country.
18
2 The labor market
Wages
49. Data analysis indicate that on average wages in the public sector are higher than in
the private and informal sector42 (also see Table 57). The differences may be further
exacerbated as individuals in the public sector receive generous benefits and non-wage
compensation that are not fully captured by information on earnings. These wage
differentials do, however, vary considerably by level. At the lower levels, compensation
in the public sector is almost double the prevailing market wage in the private sector. At
the professional, technical and managerial level, compensation is actually lower (as much
as 50-70%) than in the private sector. A decompression of the wage structure aimed at
reducing these differentials is necessary to retain qualified staff at the higher skilled levels
and minimize the strain that wage expenditures now places on scarce fiscal resources.
50. By occupational groupings, individuals employed as professionals earn the highest

wages while agricultural workers, particularly women, fare worst. Earnings on the whole
are about 15 percent higher in urban areas compared to rural areas. This differential is not
as great as in many countries because labor market conditions between areas are not
vastly different. As would be expected, earnings are fairly elastic with respect to hours
worked. Incomes peak at around 35 years of experience for both men and women, after
which they start declining. The returns to education are positive, with the returns greater
with higher levels of education. Each additional year of education increases earnings by
approximately 14 percent for both men and women. The analysis also indicates that there
does not appear to be any wage discrimination by race (see Annex V).
Table 2.1: Characteristics of the labor force, 1992

Characteristic All Male Female Poor Non-
T&T Poor
Labor Force Participation 60.2 74.8 44.7 56.4 61.1
Employed:
Formal Public Sector 34.4 34.1 34.6 20.6 36.6
Formal Private Sector 42.5 39.6 48.0 50.0 41.3
Informal Sector 23.1 26.2 17.6 29.4 22.1
Unemployed 20.8 19.0 23.4 36.0 17.1
Occupation
Professional/Sr. Manager 8.8 9.4 7.7 2.0 9.7
Tech/Associate Professional 9.5 6.6 14.9 3.2 10.5
Clerks/Service 25.4 16.9 49.1 19.2 26.4
Agriculture 4.5 5.7 2.4 7.2 3.9
Craft 15.9 21.5 5.4 21.7 14.8
Elementary 35.9 40.0 28.2 46.6 34.7
Mean Wages/month (TT$)
Formal Private 1500 1600 1300 700 1560
Formal Public 2300 2300 2300 1320 2360
Informal 900 1000 700 520 1170
42
Earnings functions were run using the 1992 SLC data to determine the effect of human capital
characteristics, race, local labor market conditions, region of residence and sector and occupation of work
and other characteristics on earnings. After controlling for individuals characteristics, earning functions can
be used to estimate the difference in earnings between sectors. See Annex V.
19
Source: 1992 Survey of Living Conditions, N=4006 individuals.
Box 2.1: Women in the Labor Market

Women in almost all societies have lower labor force participation rates than men due to gender
differences in human capital endowments, differences in women’s labor market experience, women pursuing
different and lower-paying occupations, and labor market discrimination. Women’s pay is also low; in Latin
America and the Caribbean they earn only about 70 percent of men’s average pay.
Gender discrimination in the labor market is widespread, stemming partially from cultural norms, and
partially from institutional and legal factors. These institutional and legal factors tend to reduce demand for women,
especially in formal jobs; for example, there are laws that directly discriminate against women by prohibiting their
employment in certain occupations and sectors, or preventing them from working at night. Other laws promote
discrimination indirectly by providing women with special benefits and thus raise the cost of female labor relative to
male labor for employers. Gender discrimination is of concern not only in terms of social equity but also because it
can have serious economic costs for society. Economic inefficiencies result from discrimination as: i) women are
arbitrarily restricted from high productivity, high paying jobs and thus are prevented from making their maximum
contribution to national output, ii) an employee subject to discrimination has an incentive to reduce her marginal
productivity to the level of her wage; and iii) the returns to investments in education are lowered.
In Trinidad and Tobago, female labor force participation rates (45 percent) are substantially lower than
men’s (76 percent), but still somewhat higher than the LAC average of 33 percent. Unemployment rates are about
30 percent higher for women than men, and women, on average, earn less than men with the unexplained differential
(associated with discrimination) estimated at 18 percent. While this indicates that there is some gender
discrimination in the labor market, it is somewhat less than in several other Latin American countries.
The labor legislation in Trinidad and Tobago has two notable references to women which would
contribute to discrimination in the labor market. To the extent that this legislation is enforced, it would be
discriminatory and therefore should be revised. It is however, more likely that discrimination in Trinidad and
Tobago is the result of social and cultural factors that can only be addressed through further education.
The Employment of Women Night Work Act prohibits the employment of women in manufacturing,
construction, mines and quarries during any portion of a period of eleven consecutive hours including the hours of
10:00 p.m.-5:00 am. The Ministry of Labor has also ruled that the provision of the ordinance also extends to the
employment of women in service related industries and occupations. This time period generally relates to shift work
that is associated with higher wages (thus barring women from attaining them) and refers to a time period when some
women with childcare responsibilities during the day would be available to work. The second reference is made by
the minimum wage commission which decrees that a pregnant worker shall be entitled to proceed on leave six weeks
prior to the probable delivery date stated on the medical certificate and shall not be required to return to work
sooner than seven weeks after the birth of the child. During the period of maternity leave, a worker shall be entitled
to payment calculated by computing the difference between her pay and any maternity benefits that she may be
entitled to under the National Insurance Act. The maximum benefits paid by the National Insurance Board (NIB)
vary from TT$24 to TT$138 per week depending on the earnings class of the individual and, thus, are substantially
below average weekly earnings. As the employer would have to pay the remaining portion of the salary, some may
be sensitive to hiring women in their childbearing years. Employers may hire women only on short-term contracts,
fire women once they are pregnant, or pay women lower wages to compensate for possible costs incurred by
maternity leave.
While maternity is an important social function accepted as worthy of protection and public support,
maternity laws can also work to counter women’s economic interests. The costs to employers raise the price of
women’s labor relative to men’s and thus can lead to discrimination. Some countries have addressed this by
ensuring that maternity benefits are entirely funded through social security systems rather than employers. A more
innovative approach used in several European countries is to broaden laws so a parent can qualify for maternity
leave and benefits. This helps to “blur” the distinction between male and female employee benefits reducing an
employers’ propensity to associate the costs of maternity benefits directly with women workers. A final option is to
shorten the period of maternity leave, thus reducing the cost to employers.
Source: Background information from Winter, C. 1994. Gender Discrimination in the Labor Market and the Role of
the Law: Experiences in Six Latin American Countries, World Bank, and Psacharopolous, G. and Z. Tzannatos, 1994,
Women’s Employment and Pay in Latin America, The World Bank, Washington, D.C.
20
2 The labor market
51. By gender, there are apparent wage differentials with males being paid, on
average, approximately 17 percent more than women. Men and women earn similar
salaries in all three branches of the public sector, with women earning substantially less
than men in the private formal sector (33 percent less) and in the informal sector (close to
25 percent less). While some of this pay gap may be explained by differences in personal
characteristics (men may be more educated than women or may have greater labor market
experience), and employment characteristics (relative to women, males predominate in
the higher paying formal sector and work in different industries and occupations than
women), a portion of the differential remains unexplained. This portion measures an
upperbound on wage discrimination against women.43
Unemployment and underemployment
52. The measured unemployment rate steadily increased during the decade of the
1980s and has since hovered around 20 percent. When also including the involuntarily
underemployed, the number of those seeking employment would rise to approximately
25 percent of the labor force. As in most countries, youth unemployment is quite high,
especially for those with low levels of education (less than upper secondary).
Unemployment rates are slightly higher for women than men, and similar in urban and
rural areas. In 1993, nearly 40 percent of the unemployed lived in St. George, while only
5 percent lived in Port of Spain.
53. Some of the unemployment, especially among men, originates in sectors of easy
entry that also tend to hire a lot of casual or temporary workers.44 In 1993, over 45
percent of the unemployed previously held positions in elementary occupations, 17
percent in crafts, and 15 percent in service positions. Among the unemployed few were
professionals, senior public officials, or managers. The Retrenchment and Severance
Benefits Act, as discussed below, also has the potential to contribute to frequent
alternation between employment and unemployment. To avoid an uncertain liability for
severance payments, some employers may be more likely to hire contract, temporary, or
casual workers. Thus the increased frequency of entry into the labor market in search of
jobs contributes somewhat to the unemployment rate.
54. High rates of youth45 unemployment exist for both genders. Unemployment rates
are 31.1 percent in the 15-20 age group and 27.4 percent in the 21-25 age group. For
males, high levels of unemployment (over 20 percent) persist until the age of 30 while
43
Decomposing the pay gap between men and women into its two components by using Oaxaca’s
(1973) technique measures the gap arising of different rewards to male and female characteristics. In the
case of Trinidad and Tobago, the male-female gap was around 18 percent. The non-discriminatory part of
the wage gap actually reduced wage differentials by 54 percent. However the discriminatory portion of the
gap increased differentials by 154 percent. This is the upper bound of discrimination. This implies that if
individuals were paid solely on the basis of their characteristics, women would earn more than men.
However, with discrimination against women, they end up earning less than their male counterparts.
44
For example, approximately half of the male unemployed with previous work experience specified
construction as the sector of their last job.
45
We refer to youth between the ages of 15-25.
21
women's unemployment rates remain above 20 percent until the 31-40 age group.46 The
declines with age can likely be explained by: (i) some of the unemployment among youth
may be of a voluntary nature, and (ii) the limited skills of new entrants to the labor force.
In some cases youths may be unwilling to accept available employment because their
aspirations lead them to wait for an “ideal” job. Because remuneration in the public
sector is, on average, above that available in the rest of the labor market, this may affect
the expectations of new entrants to the market and prolong the period of job search, thus
contributing to high (voluntary) youth unemployment. As long as they are part of a
household that can continue to support them during this period of a job search, they may
prolong it. With regard to experience levels, youths have few job skills and are uninitiated
in the culture of the workplace. The rotation in and out of jobs represents a process of
acquiring work experience and building human capital. As they acquire more job
experience, they become more attractive to employers and their eligibility for permanent
employment improves markedly, accounting for the substantial declines in the
unemployment rate beyond age 24.
55. The educational profile of the unemployed is similar to that in other countries.
Among men, those with only primary level education generally report lower
unemployment rates than most categories of those with secondary education. The
addition of training to formal schooling seems to have a mixed impact on the
unemployment rate. In some cases, it is associated with lower rates while in others,
higher rates. Among women, differences in unemployment rates between those with
primary and secondary school education appear to be narrower than for men. The
acquisition of training appears to have a positive effect only for those with advanced
secondary schooling. Among both sexes, university education, partial or complete, is
associated with the lowest unemployment rates.
56. The duration of unemployment for many workers has been relatively short.47
Among active job seekers with a history of previous employment, close to 60 percent had
held a job within the past six months. Even among the inactive unemployed with job
experience, the interval since the last job was surprisingly short. In 1993, 62.5 percent had
held a job within the previous six months, and fewer than 30 percent held their last job
more than a year ago. Much of the temporary unemployment is related to a change in
jobs, severance payments, period of job search and participation in the Unemployment
Relief Program (which is temporary in nature).
57. Though long-term unemployment is not the dominant characteristic of the

joblessness, it is a serious problem, particularly among women. Over 50 percent of
46
Our figures differ from those in the Labor Force Survey, especially for older individuals. Along with
the slightly different definition of unemployment and unweighted sampling, the sample sizes in the SLC data
set for age groups above 50 years are quite small, creating biases these tabulations.
47
The LFS does not provide a precise measure of the duration of unemployment, but determines the
interval since an individual began to seek work. Since the latter may be longer than the period of active job
search, the data will tend to overstate the duration of actual unemployment.
22
2 The labor market
women and 32 percent of men were unemployed for more than a year.48 A significant
portion of these individuals have unemployment durations exceeding two years. Long-
term unemployment reflects structural factors, such as slow economic growth and low
rates of job creation in the private formal sector, changes in the capital-to-labor
relationship, some mismatch of skills, and in some cases, individuals who are waiting to
obtain employment in high paying government jobs.
Box 2.2: Characteristics of the Unemployed, 1992
• Unemployment rates are 20.8 percent--19.0 percent for males and

23.4 percent for women. An additional 5 percent of the labor force
is involuntarily underemployed.
• Among the poor, unemployment rates are 36 percent.
• By age group, unemployment rates are highest among youth aged 15-
20 at 31.1 percent and 21-25 at 27.4 percent.
• Rural and urban unemployment rates do not differ significantly.
• Individuals with only a CXC basic-level education had the highest
levels of unemployment at 36.4 percent.
Source: Based on the 1992 SLC.
58. Underemployment is also prevalent in Trinidad and Tobago.49 Approximately 15

percent of employed individuals work less than 33 hours per week, and 11 percent work
less than 24 hours. It is somewhat surprising that the proportion of women
underemployed is not significantly different from men, given that women are more likely
to be involved in household production activities. Approximately half of these
individuals are involuntarily unemployed, i.e., there was no additional work available.
The rest worked fewer hours on their own volition and should, thus, not be strictly
classified as being underemployed. When combining the total unemployment rate with
the five percent of the population who are involuntary underemployed, the number of
those seeking employment rises to approximately one quarter of the labor force.
The institutional setting governing employment practices and industrial relations
59. In comparison with the labor legislation of Latin American and Caribbean
countries50, that of Trinidad and Tobago would stand out as far simpler and less intrusive.
48
All unemployed men and women reported the date at which they last worked. It is possible that these
individuals left the labor force for extended periods of time during this interval. In such cases, the actual
unemployment duration would be lower than the one calculated. We assume that individuals did not leave
the labor force in the time since they left their last job.
49
In the strictest sense, individuals are defined as underemployed if their marginal productivity is below
the wage. However as this is difficult to measure, we have assumed the more common definition of
underemployment--if the individual works less than 40 hours/week.
50
The Labor Codes of the Latin American countries tend to define the legal conditions of employment
in great detail leaving relatively little scope for their determination by the parties to an employment
relationship. In general, they provide for generous fringe benefits and sharply limit the flexibility employers
have in adjusting the size of their work force. As a result, in most countries, the laws are only partially
observed. Evasion has been widespread as the conditions defined by law can be met primarily by those firms
that are relatively capital-intensive and produce for protected markets. However, the sharp decline in real
23
However, what the Latin countries have imposed in detailed Labor Codes, Trinidad and
Tobago has defined through collective bargaining and administrative interventions; in
particular the Industrial Relations Act, the Retrenchment and Severance Benefits Act, and
the Minimum Wage law. In the organized sectors of the economy, collective bargaining
has secured generous fringe benefits for workers as well as wages that are above those
prevailing throughout the rest of the economy. The Labor Court has also played a role in
extending the terms negotiated in some firms to others by fiat. While the minimum wage
law simply provides for the establishment of minima, the minimum wage commissions
have gone far beyond this in defining a whole range of other working conditions. Though
some of these administrative interventions merit reform, none are the direct cause of large
scale unemployment in the country. Rather, the combined effect of these forces may
create some distortions in the labor market that have not been conducive to promoting
labor-intensive growth. This will be of increasing concern as the oil dependent, public
sector led economy shifts to an export-oriented, private sector orientation.
The industrial relations act
60. The Industrial Relations Act provides for the right of workers to organize in
unions and sets forth procedures to be followed in the settlement of disputes. All
disputes that cannot be resolved directly through negotiations must enter a process of
conciliation under the auspices of the Ministry of Labor. If conciliation fails to secure an
agreement, there are different procedures depending on whether the firm is a provider of
essential services.51 For essential services, the dispute is referred to the Industrial Court
for resolution, i.e., for compulsory arbitration. The law forbids strikes or lockouts in these
economic sectors. Unresolved disputes that arise in non-essential services must also
submit to conciliation. If conciliation fails to produce an agreement, the parties to the
dispute may jointly agree to submit to resolution by the Court. Alternatively, after
fruitless conciliation,52 the parties may resort to a lockout or strike. In disputes arising out
of the interpretation of an agreement or the application of the existing terms of
employment, (e.g. dismissal or suspension of a worker) a failure to resolve by
negotiations must be followed by submission to conciliation. If conciliation proves
fruitless, either party to the dispute may refer it to the Court for a resolution.
61. On the whole, the present system works reasonably well for Trinidad and Tobago.
It is generally thought that, in the absence of the Court, industrial relations would be more
conflictive than they have been in recent years. However, there are several key factors
wages that occurred throughout the region during the crisis years of the 1980s has rendered the legal
requirements less burdensome and following changes in the trade regime, have contributed to significant
increases in exports. For a discussion of how labor laws affect employers’ decisions and workers’ perceived
benefits and costs of complying with labor laws in Latin America see for example, A. Cox Edwards, 1993,
Labor Market Legislation in Latin America and the Caribbean, World Bank LAC technical Department
Report No. 31.
51
As specified under the Act.
52
The Ministry of Labor must also certify that the dispute is unresolved.
24
2 The labor market
affecting the way in which the procedures have functioned, potentially impacting on the
overall employment conditions in the country. Areas of concern include:
62. LARGE NUMBER OF CASES RESULTING IN LONG DELAYS. Under the current
system, there are long delays between the submission of a dispute to its final adjudication
by the Court.53 Among decisions taken by the Court in 1993, close to half of the
remaining cases had originated between 1985 and 1990. This is due to the large number
of cases, many of which are trivial disputes, or cases that have little or no merit and
should be resolved by the parties themselves or through the conciliation process. There
are many cases in which the appellant, usually the union, has no real grounds for filing a
grievance but is unwilling to accept responsibility for acceding to a disciplinary action
that offends one or more of its members. Allowing such cases to be resolved by the Court
thus absolves the appellants of responsibility for negative decisions. On the other hand,
it detracts from the Court’s capacity to process cases in a timely manner.
63. To reduce the Court’s load, an initial examination of the cases referred and
refusing to hear those that appear to have no merit would ultimately limit the burdens
facing the Court. Alternatively, the Court could rule that in cases which it considers to be
trivial, the costs of all parties to the proceedings, including the Court’s would have to be
paid by the loser. This would clearly provide a strong incentive to the parties to settle
more issues on their own. A precedent for this kind of a provision may be found in the
labor code of Costa Rica.54
64. In addition, time limits could be defined to assure a rapid resolution of issues and
encourage a greater responsibility on the part of both management and labor leaders.
Limits defined for intervals such as: the period between the referral of a case to the Court
and the holding of hearings, the time within which the Ministry of Labor must initiate the
conciliation process, and the interval for rendering a decision following the conclusion of
hearings would shorten the period of delays. Failure to adhere to the time requirements
should carry a penalty or allow for the removal of the case from the jurisdiction of the
Court. To the extent that delays are due to the failure of the parties to a dispute to
cooperate with the Court in timely fashion, the Court should be able to impose penalties.
Ideally, employers and unions should be willing to establish their own dispute settlement
process, e.g., by engaging the services of a private arbitrator.
65. PARTIALITY IN FAVOR OF LABOR. There is some concern from employers that the
Court fails to give full and fair consideration to employers' needs or interests and thus
53
Delays of up to 3 years were not unusual in the past. According to the President of the Court, this
backlog has recently been substantially reduced. Court staff informed us that the average time between the
submission of a dispute and its resolution has been reduced and is now estimated to be on the order of nine
months, though for contract disputes the interval is longer. One expert in the field observed that most
contract disputes do not get acted upon until some 18 months after their submission to the Court.
54
The Labor Code provides that workers' appeals from discharge that prove to be unjustified by the
courts will obligate the loser to pay the employer's and worker's own costs of litigation. In addition the
appellant is subject to a fine. Costa Rica, Codigo de Trabajo, Article 82.
25
appears to favor unions in its awards on grievances. This particularly arises in disputes
related to discharges or suspensions of employees. Given the scarcity of employment
opportunities, the Court seems to be reluctant to permit employers to discharge workers
even when they are caught in flagrant violations of rules and/or trust.
66. Though it is not possible to verify the extent of this bias, it could be related to the
current system of appointing judges. Judges are appointed for a term of three to five
years but may be reappointed by the Court’s president. To the extent that the process of
reappointment is subject to intervening pressures from unions or employers, judges may
be disposed to favor the side that is perceived to possess the greater political clout. This
could be reduced by amending the terms of Court judges either to life (or mandatory
retirement age) or to an extended term (e.g. 10 to 15 years without reappointment).
67. INFLEXIBILITY OF THE COURT. The Court has been characterized by some
employers as inflexible and dedicated to the preservation of the status quo. This stems
from the frame of reference adopted by the Court in rendering its judgments. It is largely
restricted to the conditions defined in collective bargaining agreements that have been
concluded voluntarily and that are on file with the Court. To the extent that existing
contracts "set the pattern" for the resolution of subsequent disputes by the Court, parties
entering into collective bargaining have little incentive to hold out for departures from "the
pattern" in the expectation that these would be "ratified" by the Court. It should be noted,
however, that more recently the Court appears to be more willing to depart from this
pattern. This issue is further discussed in the following section on wage determination.
68. LIMITED CAPACITY OF THE STAFF. The general performance of the staff at the
Ministry of Labor is low and thus affects the level of efficiency in the process of dispute
settlement. The positions appear to be unattractive to competent staff, resulting in a high
turnover rate. Many of the qualified professionals have left to work in private sector
industrial relations departments.
The retrenchment and severance benefits act
69. This Act was established in 1985 to provide for severance payments to workers
dismissed for reasons of redundancy. The Act primarily affects large employers because
it takes effect only in cases where five or more workers are terminated within a specified
time interval. Severance payments are granted as a function of the length of uninterrupted
service.55 The law does not grant employers full discretion to lay off workers upon
payment of the severance allowance, resulting in a grievance being filed by the unions
with the Ministry of Labor. Before the employer can reduce their work force, they must
be able to justify the need to retrench to the satisfaction of the industrial relations dispute
settlement. If the dispute cannot be resolved at the Ministry level it can become a trade
55
For each complete year of service up to four years, the separated employee is entitled to two weeks
basic pay for each year. For the fifth and subsequent years of service, the employee is entitled to three weeks
basic salary. Workers with less than a year's service receive a prorated payment.
26
2 The labor market
dispute, which is referred to the Industrial Court for adjudication, either on appeal by one
of the parties, usually the union, or by the Minister of Labor. Employers perceive the Act
as restrictive. As it now functions, it imposes potentially heavy and unpredictable costs,
and limits employer flexibility in adjusting employment levels to changing conditions of
demand for their output. The Act can also be expected to reduce job security of many
workers as employers seek to avoid liability under its provisions by increasingly resorting
to temporary or contract labor, which would not be eligible for severance allowances.
70. AMBIGUITY IN THE LAW. It is not entirely clear from the wording of the Act
precisely what the definition of redundancy is or what the payment of a severance
allowance is intended to achieve. In addition, the law may actually reduce stability for
workers. Under the Act, “redundancy” is defined as "the existence of surplus labor in an
undertaking for whatever cause," and "retrenchment” refers to "the termination of
employment of a worker at the initiative of an employer for the reason of redundancy."56
These terms do not distinguish between a redundancy that may be deemed to be
permanent and one that arises from fluctuations in demand for an employers' products
and which, therefore, may give rise to only temporary layoffs. As a result, reductions in
force, whether stemming from temporary or permanent conditions of redundancy are
treated similarly.
71. The law also fails to provide a time interval within which an appeal from an
employer's action must be resolved at the Ministerial level or by the Court. If
interventions and decisions are subject to the same delays as have been evidenced in
other disputes referred to the disputes settlement process, the consequences for the
economic health of enterprises can be significant.
72. POSSIBLE CONSEQUENCES FOR EMPLOYMENT. Because the Act can create a large
liability for an employer, it has the potential to encourage them to minimize the number of
workers they hire and to substitute machinery wherever possible. Particularly in the more
open trading environment that Trinidad and Tobago is creating, changes in economic
activity abroad may result in greater variations in demand for domestic firms' products
than in the highly protected environment of the past. This indicates a greater need for
flexibility in adjusting the size of the work force in response to variations in demand. The
law, however, makes flexibility very costly. As noted above, it makes no explicit
provision even for temporary layoffs that may be required to maintain the economic
health of a firm.
73. As a result, some employers seek options that permit them to evade the severance
pay provisions. In some cases, workers are hired as casual workers, contract workers, or
as independent contractors wherever possible, and therefore do not benefit from fringe
benefits that are available to regular employees and are subject to intermittent patterns of
employment even less secure than they would have in the absence of the law. Or,
workers with four years seniority may be dismissed to avoid the escalated cost of
56
Article 2.
27
separating longer-term employees; such a response would more heavily affect workers in
low-skill positions that require little investment in training. Thus, the paradoxical result of
a law intended to increase the stability of employment may have the unintended effect of
reducing it for many workers.
Box 2.3 Retrenchment and Severance Schemes

It is worthy to note that other countries with legislation or practices similar to those defined by
Trinidad and Tobago's Retrenchment and Severance Benefits Act are reconsidering its effectiveness. There is
a growing recognition of the desirability of increasing the degree of flexibility in employment relations to
promote greater mobility of labor and efficiency in labor market operations and to permit a faster and less
costly response of employers to shifts in demand for their products. The greater internationalization of
markets has increased the costs of inflexibility. This review of unemployment legislation can be seen not
only in parts of the developing world but in Europe and Japan, which have long sought to endow workers
with a high degree of job security.
Some countries have changed the legislation on dismissals, transforming the severance payment
into deferred compensation (e.g. Brazil and Peru). Employers make a monthly contribution to a fund in the
worker’s name. While the employee will receive the severance some time in the future, the employer treats
the deposited amount as an expense for tax purposes. At the time of separation, the amount paid is equal to
the accumulated fund plus interest and workers have borrowing rights over the accumulated fund. The
systems based on funds have many advantages over the traditional method: (i) all dismissals qualify for the
base severance--the accumulated fund; (ii) the fund is portable to a new job; (iii) it minimizes the cases in
which firms have no funds to make the severance payments required by law; (iv) it is transparent in that
employers see their contributions as part of the current cost of labor and employees see it as a deferred
payment because it is portable and does not distinguish in a fundamental way between quitting and layoff. In
most cases, workers are allowed to borrow from the fund for housing and similar expenses. Moreover,
severance payments based on an accumulation of funds do not affect employers decisions with respect to
age-earnings profiles and do not discourage investments in training on the job. (Edwards, 1993)
The 1995 World Development Report sets forth a few basic principles for guiding retrenchment
schemes. The less developed the economy, the simpler and more transparent the mechanisms should be.
Thus a special severance scheme that tops up nationwide severance schemes is better than extending
unemployment benefits, because it is administratively simpler. To avoid introducing biases against labor,
demand schemes ought not to be financed through payroll taxes. For reasons of fairness and efficiency,
employees to be laid off should be offered a choice among several exit options. To reduce the danger that
the best workers will leave, wage structures should tighten the link between performance and pay. Finally,
rules requiring advance notice of layoffs may help workers adjust. But since requirements of advance notice
can slow voluntary exits and cause workers to wait for retrenchment packages, it may be appropriate to
accompany advance notice measures with lower remuneration for workers who remain.
Source: Cox Edwards, Alejandra, 1993, Labor Market Legislation in Latin America, LAC Technical Department
Report No. 31, The World Bank, Washington, D.C. and The World Development Report, 1995, forthcoming, The
World Bank, Washington, D.C.
Legal minimum wages
74. The minimum wage legislation provides for the setting of minimum wages by
industries, though no guidelines or criteria are given by the law for the determinations of
the Minimum Wages Commission. The Commission sets wages for workers at the
bottom of the wage structure as well as for various occupational groups within each
covered industry. The wages are set according to job titles, however, do not account for
28
2 The labor market
differences in job content or in the quality of labor across firms. The Commission also
mandates non-wage terms of employment, such as vacations, sick and maternity leaves,
etc.
75. LEVEL OF WAGES AND BENEFITS. By and large, the wage rates set do not seem to
introduce gross distortions in the price of labor. Wages range (according to the 1991
decree) from TT$150 per week for household assistants to TT$285 for a head cook, head
waiter or supervisor working in the catering industry. On the other hand, the addition of
costly fringe benefits can raise the price of labor in covered employment well above its
market price and beyond the ability of many small firms to pay. Typically, in economies
where wages are market determined or where collective bargaining takes place without the
intervention of other institutional forces, most of the cost of fringe benefits is shifted back
to the workers themselves in the form of a lower cash wage than they would otherwise
receive. Where the wage and the benefits are simultaneously determined by an arbitrary
authority, this shift may or may not be realized. If not, the wage setting authorities run
the risk that the total wage cost of labor will exceed the market price by so much that
employers will economize on the use of labor by substituting machinery for labor or to
migrate to the informal sector, i.e., evading legal provisions. Indeed, it is generally
recognized that workers currently are willing to work for less than the legal minima and
that evasion exists. One would expect that the greater the gap between the market wage
and the legal minima, the greater is the tendency for informal sector activity to increase
relative to the formal sector. If enforcement were to become more effective under current
economic conditions, the consequences for employment could be significant.
76. NUMBER OF MINIMUM WAGES. Currently, the industry-by-industry detailed

regulation of minimum wages is complex. The more complex the system, the greater the
opportunity for the introduction of distortions that militate against the interests of workers
as a whole.57
77. ROLE OF THE MINIMUM WAGE. Minimum wage legislation is a widely debated
topic in many countries. For example, some advocate a minimum wage set at a level that
provides an income above the poverty line for some specified size household. However,
since minimum wages are not adjustable for differences in the productivity of labor, such
a wage may render workers with limited endowments of human capital unemployable. It
may particularly affect youth entering the labor force, whose productivity is likely to be
considered low.
78. It is too much to expect a minimum wage to serve as an effective measure against
poverty. Because poverty is not a function of the wage of a single individual, but rather a
57
While more generous terms of employment clearly are consistent with the interests of those who are
employed, they may not be so with the interests of workers excluded from employment or consigned to
inferior jobs as a result of limitations placed on the size of the industry or of substitutions of capital for
labor. Too often, public regulation of economic variables takes little account of the negative impact of its
actions. This may be explained by the fact that the benefits to those who hold affected jobs are visible and
measurable, whereas the costs to those who are excluded are difficult to trace and measure.
29
number of wage earners contributing to household welfare, any minimum wage may
either be inadequate to lift some households out of poverty while, in other cases, provides
an extra bonus to households with income levels well above the poverty line. A more
effective strategy to combat poverty and unemployment is setting a wage that will
maximize employment and then provide for income transfers to those whose productivity
is inadequate to yield sufficient income to escape poverty. An expansion of employment
opportunities and the reduced surplus of workers will increase wages in response to
market pressures.
Wage determination: Institutional forces and markets
79. Institutional forces play a prominent role in the determination of wages in a

significant part of the labor market. The trade union movement of Trinidad and Tobago
has long been characterized as powerful and aggressive. Its membership is concentrated
in energy-related industries, capital-intensive manufacturing, and in the public sector.
Over the years, most trade unions appear to have secured terms of employment
considerably more favorable than those available to non-union wage earners. Industrial
relations legislation also plays a role in wage determination. In the settlement of
unresolved contract disputes between employers and organized labor by conciliation, the
Industrial Court determines the rate at which wages are to be adjusted.
The industrial court
80. The current system of wage determination has tended to show bias toward
employees in the organized formal sector. The references placed before the court are
collected by the Research Department in the Court and are drawn almost entirely from
unionized firms whose collective bargaining agreements are on file with the Court. These
firms are both publicly and privately owned, largely involved in energy-related industries
or in other highly protected sectors of the economy. Because these industries employ no
more than 20 percent of the labor force, they do not accurately represent market
conditions.58 As a result, wages in the organized sector have moved further away from
those in the rest of the economy where many workers have seen both real and nominal
wages decline. Because terms of employment are fixed in advance for three years,
reference to the existing body of contracts implies that court decisions can begin to reflect
changing labor market realities only with a lag as long-term contracts are renegotiated and
managements succeed in securing union agreement to more modest terms of settlement.
81. The Industrial Relations Act does enable the government to intervene in the
deliberations of the Court on matters affecting the public. Generally, the government has
not intervened on wage questions before the Court. On the other hand, to the extent that
the public sector as a whole is a major employer, the government has an opportunity to
signal its views via the positions it adopts in contract negotiations with public sector
58
Market determined wages reflect the opportunity cost of labor.
30
2 The labor market
unions. As a major employer, this can put the government in a difficult position, for the
stance it adopts in labor negotiations or disputes carries with it political as well as
economic implications. Furthermore, the Government is the employer in many of the
"essential" industries where the costs of an aggravated dispute with the unions can be
high, in the form of widespread interruptions in productive activity and/or lost revenues to
the state.59 Nor can the government overlook the possibility of incurring political costs
from a confrontation with the unions.
Trade unions
82. The present state of industrial relations in Trinidad and Tobago can be
characterized as strained and uncertain. This is understandable considering the previous
strength and substantial improvements gained by the unions during the oil boom years
(see Annex VI). The past decade of decline has resulted in falling wages and substantial
reductions in much of the public sector and parts of the private sector. For some of the
unions, these retrenchments have greatly reduced the size of their organizations and as a
result, they find their bargaining power sharply reduced. They have shifted their focus
away from the aggressive pursuit of higher wages to the preservation of existing jobs.
83. The unions voice no optimism regarding the future and feel alienated from the
present government. They are concerned with the structural economic changes that are
likely to increase the competitiveness of markets, lead to more job losses in non-
competitive firms, and constrain future wage increases. With these changes, it is likely
that bargaining with the privatized firms in the future economic environment will be more
difficult than was experienced via the government in the past.
Wage policy
84. Given the substantial structural adjustments facing the economy of Trinidad and
Tobago, it would seem advisable to pursue a cautious, restrained policy on wage changes.
As trade barriers are relaxed, domestic producers will be challenged to become and
remain competitive with foreign sources of supply. Beyond the problem facing existing
producers is the need to develop new sources of foreign exchange earnings. Both of
these objectives will become more difficult to attain if the organized sector or the
government pursue expansive wage policies. The interests of the country as a whole will
be better served if increases in productivity were to be shared in the form of price declines
rather than in higher returns to the factors of production. Not only would all consumers
realize increases in their real incomes as prices decline, but the increasing competitiveness
of Trinidadian goods in international markets would encourage expansion of employment
in their production. Furthermore, wage restraint will also serve to postpone some
59
While strikes in essential industries are prohibited, they have occurred with no retaliatory
consequence for the unions. Generally, however, union displeasure is evinced by "working to rule" or
otherwise slowing down the execution of work activities.
31
substitutions of capital for labor, thus stemming one source of erosion of employment
opportunities.
85. This could affect the motivation of increased productivity among employees. To
the extent that such increases in individual enterprises are not soon reflected in wage
increases, workers will be little disposed to cooperate in efforts to increase productivity.
One response to this is encouraging mechanisms to share in productivity gains, such as
profit-sharing. This would not affect the price of labor relative to input substitutes, while
encouraging firms to adopt a longer-term horizon in pursuit of an improved competitive
position in markets.60 Alternatively, wage payment systems could be adopted that more
directly relate earnings to the quantity produced.
86. Clearly, if the government's economic policy were to move in this direction, it
would face a formidable task of mobilizing broad public support for it. Furthermore, it
would require that the Industrial Court approach its task of conflict resolution with a new
set of criteria -- the broader public interest as redefined by public policy. By placing an
emphasis on the broad sharing of gains throughout the society in the form of lower prices
and increased employment (and declining unemployment), it may become possible to
engender enough support to permit the government to resist opposing pressures.
Recommendations
87. The government of Trinidad and Tobago faces a great challenge in overcoming the
persistent unemployment that has characterized the economy for several decades. Of
primary importance is the creation and maintenance of conditions that favor accelerated
rates of investment, particularly in areas that are more labor intensive than the traditional
energy-related sectors. With the positive growth in GDP in 1994, it is likely that the worst
of the unemployment has been experienced and that the employment situation will
improve. Some of the prospective investments in the energy and tourism industries will
provide a considerable number of temporary jobs in the construction industry and
substantial numbers of permanent jobs in tourism. In addition, there is a large backlog of
necessary infrastructure improvements and repairs which will be carried out as the fiscal
situation improves. The decline in resources destined for external debt service over the
next couple of years should permit the government to undertake more such projects with
favorable consequences for employment.
88. The lower level of real wages in comparison with the past decade should render
Trinidad and Tobago more competitive, particularly in the production of goods and
services that require an educated labor force. The less aggressive stance of the trade
unions is likely to encourage more investors than in the past. Finally, the labor legislation
60
Some may argue that there is no reason to believe that firms would reduce their prices in response to
productivity increases. This overlooks the implications of the reductions in trade barriers. Local producers
who have thrived in protected markets will now be subjected to severe competitive pressures from lower-
priced goods from abroad. Unless they respond by reducing prices, their survival will hang in the balance.
32
2 The labor market
is relatively simple and non-intrusive. As a result, the administrative and judicial

instruments that are the principal instruments governing the conditions of employment
can more easily introduce modifications that promote and maintain a more favorable
environment for new investment.
89. Still, there are several recommendations that will help to promote the flexibility
and competitiveness needed to foster broad-based growth, while ensuring adequate
standards for the workforce:
• Facilitate the process of dispute settlement. There are some changes that
would accelerate and, thereby, improve the process of dispute settlement by the Ministry
of Labor and the Industrial Court. The promotion and maintenance of a healthy industrial
relations system and climate depends on the timely settlement of disputes. The
recommendations include:
(i) Limiting the conciliation process to one round;

(ii) Strengthening the staff in the Ministry of Labor through more extensive
training of conciliators and improved remuneration for key positions;
(iii) Reducing the incidence of non-meritorious disputes through selectivity in
cases being heard by the Court or cost recovery mechanisms for trivial
cases;
(iv) Limiting hearings to a single judge to reduce the lag between the reference
of a dispute to the Court and its disposition;
(v) Establishing time limits for rendering decisions with a penalty imposed for
failure to adhere to limits set;
(vi) Ensuring court impartiality by amending the terms of Court judges to
either life (or mandatory retirement age) or to an extended term without
reappointment.
• Evaluate replacement or reform of the retrenchment and severance

benefits act. In the more open economy of the future, the current Act will limit the
flexibility of employers in adjusting employment in response to global fluctuations in
demand and thus encourage the substitution of capital for labor. It may also provide an
incentive to shift to contract and temporary workers for a larger share of their work force.
A possible alternative for consideration is a system of individual savings accounts. This
would be based on a worker’s mandatory personal savings account. Under such an
arrangement, both the employer and employee would contribute to a fund to be drawn
upon by a worker who becomes unemployed. The accumulated savings would also be
available if a worker quits a job voluntarily or retires from the labor force. Since the
account is personal and portable, it would facilitate labor mobility in response to changing
patterns of demand in the labor market. These individual accounts could be opened in a
financial institution of the worker's choice, e.g., a commercial bank, insurance company,
or investment bank. This initiative would also have the advantage of promoting a higher
33
rate of savings in the economy and expanding the resources available for investment, thus
helping to finance a higher rate of growth of the national economy.
This system will potentially provide greater flexibility for the employers.
As a result, they should be more willing to assume the risks associated with production
for export as well as to consider more labor-intensive production techniques as
affordable. Potential foreign investors are also more likely to view Trinidad and Tobago
as attractive for investment. An additional consideration in favor of the provision of a
safety net of the type proposed here is that it is likely to reduce workers resistance to
desirable and efficient changes that may have temporary impacts on employment, e.g.,
trade liberalization or technological change.
If this is not deemed feasible, an amendment to the Act which would be

beneficial involves providing for a reduction in the advance notice required prior to
effecting layoffs and requiring that, if an employers action is appealed, the Court must
render a judgment prior to the expiration of the period of advance notice. Failure to
render a decision should empower the employer to proceed as proposed. In addition, the
Act should explicitly distinguish between temporary and permanent layoffs, limiting the
payment of severance allowances to only the latter.
• Revise wage comparisons within the industrial court. The Industrial

Court should adopt a broader frame of reference in considering wage comparisons to
include conditions in the labor market at large. Until the economy begins to approach full
employment and inter-sectoral wage differentials have narrowed, wage restraint would be
advisable. Subsequently, wage awards should be linked to productivity changes in the
economy as a whole, leaving it to individual enterprises to develop alternative ways of
sharing in internal productivity gains. An appropriate measure, for example, would be a
form of profit sharing that would provide an incentive to workers to join in a effort to
increase productivity. In some industries, output-related compensation schemes may
serve to stimulate productivity increases.
• Simplify minimum wage legislation. The current system of industry-by-

industry minimum wages could be replaced with a simpler, single economy-wide
minimum wage set equal to the market wage for unskilled labor. For those households in
which earned income is inadequate for an acceptable standard of living, income transfers
would provide a more efficient way of responding to poverty.
• Reestablish a consultative role for the trade unions. Though the role of
the trade unions has weakened over the past decade, the trade union movement is still
strong in key sectors. To constructively channel the concerns of the unions, a
consultative role for them should be reestablished. At the very least, discussions with the
unionists would provide the opportunity to advance the rationale of the policy initiatives
and to demonstrate why those initiatives hold more promise for the welfare of the society
as a whole than do the proposals of the unionists. Even if agreement on the desirability of
34
2 The labor market
some of the reforms cannot be reached, it may be possible to reach consensus on the way
in which their implementation will be undertaken.
If the government cannot count on the trade union movement to support

its reform agenda, then it clearly will need to develop and nurture an alternative
constituency for it. Currently, the private, large-firm sector appears to support the
government's program with the exception of some reservations concerning the trade
reforms that may render some firms non-competitive with imports. However, the
government should be eager to broaden the constituency in support of its program,
especially as it discusses particular aspects of reform with non-government groups.
• Review policy options for reducing gender discrimination. Two areas of

policy should be reviewed to reduce the existing gender discrimination in the labor
market. One area is related to the conditions of maternity leave which can provide some
disincentive to employers to hire women of childbearing age. This could be addressed by
increasing the benefits paid by the NIB to the full salary of the employee, or broadening
the laws so that either parent can qualify for paternity leave benefits. Another area is
improved career counseling and encouraging girls to follow non-traditional courses of
study. This will yield future benefits such as higher incomes, increased labor force
participation, and ultimately, an increase in national output.
• Revise Labor Force Survey (LFS). There are several problems with the
current measurement of labor force statistics affecting a more accurate analysis of the
status of the labor force. Detailed recommendations on strengthening the LFS are
included in Annex IV.
• Limit labor exchanges. Among the measures proposed to alleviate

unemployment is an increase in the number of labor exchanges. The justification for this
is to improve the matching of skills and jobs. However, in the current environment of
surplus labor, and given the limited use of this service, the low placement rates and
budgetary constraints, the establishment of new centers would not appear to represent a
very productive use of resources. Available resources would be more effectively spent on
increasing employment directly through expanded public works or other programs.
35
3
Promoting broad-based
growth
90. After a decade of declining real incomes and increasing levels of poverty and
unemployment, the foremost policy priority in Trinidad and Tobago today is the
resumption of broad based, sustainable economic growth through a fundamental change
in the economic structure. Economic diversification from the present dependence on
oil/gas is key to achieving this objective for several reasons:
• Known oil reserves are declining and the rise of natural gas and related
industries will only partially offset this decline. The development of alternative sources of
growth is, therefore, critical.
• Non-oil and gas based activities are also crucial for a more labor intensive
and equitable economic base. The oil/gas sector contributes little by way of direct job
creation and its preferential status in the past has stifled more labor intensive sectors.
• Excessive dependence on a single commodity with volatile prices has also
led to the boom and bust pattern of past years (see Box 3.1). Not only do the extreme
variations in incomes exacerbate economic costs of adjustment, they also contribute to
social problems as expectations of living standards are slow to adjust to income declines.
91. The policies needed to achieve broad-based growth focus on three areas: (i)
macroeconomic policies to promote savings and investment and encourage private sector
development; (ii) improving infrastructure services; and, (iii) re-focusing the public
sector. Many related initiatives are currently underway.
Reinforcing the macro agenda to promote broad-based, labor intensive growth
92. MAINTAINING MACROECONOMIC-STABILITY. Maintaining macroeconomic

stability is a prerequisite to promoting long-run growth. The essence of a sound macro
policy is to match instruments with objectives: there is a need to continue to build
reserves which will help maintain a competitive nominal exchange rate. The money
supply must be contained to keep down inflation and ensure that the real exchange rate
remains competitive. The tight monetary policy, however, may cause interest rates to rise
in the short run. (The prime rate is currently around 15 percent.) To combat this, the
fiscal balances must be strengthened to reduce government debt and relieve pressure on
37
interest rates. By following this policy, the government will establish a track record of
sound economic management which will enhance the credibility of its program, dampen
inflationary expectations and boost investor confidence. This combination of factors will
contribute to lowering interest rates and stimulating investment.
Box 3.1: The Resource “Curse”

Trinidad and Tobago would probably have been better off today had it not been “blessed” by an
episode of oil windfalls. Two decades after the beginning of the oil boom, not only have per capita incomes
in Trinidad and Tobago fallen back to pre-1973 levels, but the oil boom has also left a legacy of structural
rigidities that have undermined the growth and development of the economy. Such a legacy of a boom
based on mineral resources is not unique to Trinidad and Tobago. Mineral rich countries, on average,
experienced lower rates of growth during the past two decades than less well-endowed countries61 due to
the way mineral revenues are absorbed and transmitted to the rest of the economy. Mineral-based industries,
and especially oil, are highly capital intensive and have few direct linkages to the rest of the economy, except
through a fiscal link. Hence, mineral-based wealth tends to lead to an over extension of the public sector, a
crowding out of the private sector and to a reduction of the competitive pressures on economic management
and domestic industry. The competitiveness of the non-mineral sector is usually further eroded by the real
appreciation of the exchange rate brought about by the mineral-export boom.
Thus, in Trinidad and Tobago the non-oil tradable sector was virtually decimated. By 1982, oil
revenues accounted for more than 90 percent of total exports and the resultant real appreciation of the
exchange rate eliminated other exports. The production structure became inefficient and non-competitive as
production subsidies, import barriers and labor market regulations were put in place to protect floundering
domestic enterprises. The public sector expanded as oil revenues, which accounted for more than 50 percent
of Government revenues, enabled it to branch into commercial activities, crowding out the private sector.
Public expenditures also became skewed toward current expenditures while public employment and transfer
payments expanded to alleviate the continued high rates of unemployment caused by the decline of the
traditional sectors and the capital intensive nature of the oil sector. Oil revenues did enable a temporary
increase in living standards for many population groups. But this was accomplished by poorly designed
government programs. When oil revenues declined, a sustainable base for income growth had not been
established for these groups, creating a mismatch between their raised expectations and the feasibility of
maintaining their high living standards.
93. INSULATING THE ECONOMY FROM OIL PRICE VOLATILITY. Eliminating the
dependence of the economy on a single export commodity is key to reducing its
vulnerability to external shocks. Already, diversification within the hydrocarbon sector
into related industries has contributed to reducing the influence on the economy of oil
price fluctuations per se. Additionally, substantial progress has been made in reducing the
dependence of government revenues on oil/gas in recent years (from 35 percent of the
total in 1989 to 17 percent in 1994). The continued broadening of the tax base during the
recovery should consolidate this trend. Nevertheless, fuel exports still constitute around
40 percent of exports and so in the medium term, the economy remains vulnerable to
price shocks. While complete insulation from world price variability is impossible,
measures to minimize its disruptive effects on the economy should be adopted. In the
event of higher-than-expected prices and revenues the government needs to accelerate the
accumulation of reserves which, if sterilized, will help maintain a competitive real
61
See R. M. Auty, 1993, Sustaining Development in Developing Countries.
38
3 Promoting broad-based growth
exchange rate. The absorption of “windfalls” in this way will hasten the achievement of
the objectives of the macroeconomics program and help absorb the shock of any
subsequent price declines. Should oil prices fall, the Government will have to accelerate
the implementation of its adjustment program, particularly in such areas as trade reform,
the reduction in current expenditures and the divestment of public enterprises.
94. INCREASES IN SAVINGS AND INVESTMENTS. While maintaining prudent economic

management, the Government must also reinforce the growth orientation of the
macroeconomic agenda with progressive increases in public savings and investments.
Central government’s savings fell from 18.5 percent in 1981 to an average of 1 percent
over 1982-9162. This drastic fall in public savings shifted the burden of adjustment to
monetary policy thereby reducing private investment as well. As a result, total investment
in the economy has fallen to about 13 percent of GDP in recent years with central
government investment falling below maintenance levels to less than 2 percent of GDP.
Greater fiscal control as well as a reorientation from current to capital expenditures will be
critical for a greater growth orientation. Continued broadening of the tax base, reducing
interest payments by the reduction of public sector domestic and external debt and the
restructuring of the public sector including the planned divestments, will contribute to
achieving the necessary fiscal saving. Additionally, the continued strengthening and
deepening of the financial sector remains a key priority to improve mobilization of
domestic savings. There is still a need to improve oversight of the securities market,
company legislation and disclosure standards.
95. POLICY AGENDA FOR ECONOMIC DIVERSIFICATION AND PRIVATE SECTOR

DEVELOPMENT. While significant progress has been made in removing the policy
impediments to economic diversification, there is a need for the Government of Trinidad
and Tobago to continue implementing its reform program to secure a favorable outcome
for the non-oil/gas sectors. This involves ensuring the competitiveness of the non-oil
sectors, steady implementation of the trade reforms along the path announced, including
meeting the tariff reduction targets and the improvements to the duty rebate system for
exporters, continuation of the divestment of state enterprises and improvement of
infrastructure services (see below). The Government is currently revising the investment
regime to reduce red tape and improve the transparency of investment incentives and
regulations. The Foreign Investment Act is also being repealed on the basis of
recommendations contained in a 1994 FIAS diagnostic study. The combination of these
policies is bound to stimulate vigorous private sector activity (including foreign direct
investment) in the non-oil sectors.
96. A key issue remaining on the development agenda is the policy framework for the
agriculture sector, including land tenure and trade policy. Some policy reform is
underway (tariffication), and other areas are targeted for reform under the Agricultural
Sector Reform Program. Existing delays in addressing land tenure reforms, which are
62
While government savings were 18.5% of GDP in 1981, overall public sector surplus was only 3.5
percent of GDP as large investments in the oil and gas sector were undertaken in this year.
39
sensitive, have meant that approximately half of the country’s land base and 40 percent of
agricultural land remains within the public sector. Rationalization of Caroni, the major
sugar enterprise has lagged. These issues remain critical impediments to the
diversification of the export base in high value agricultural products and thus must be
prioritized. Agriculture also has the potential to create new jobs at the unskilled level, and
therefore reform of the agricultural sector has important implications for employment and
poverty reduction.
Improving infrastructure services
97. One of the most important aspects of promoting economic diversification will be
to improve essential infrastructure services in ports, electricity, transport and water.
Despite heavy investments in the oil boom years, infrastructure services have deteriorated
significantly due to lack of maintenance, poor management and absence of new
investment. Most public utilities have suffered from overstaffing, financially
unsustainable tariffs, low investment allocations and the virtual absence of management
accountability. The situation in water is particularly grave with unaccounted for water
running over 50 percent due to leaks and an almost complete absence of meters. This
imposes particular hardships on the poor. To attract capital investment and improve the
management efficiency in utilities, the government has decided to introduce private
participation in the key sectors of power, water, and ports. To put in place an appropriate
regulatory framework, it has already reconstituted the Public Utilities Commission and is
in the process of redefining its role and strengthening its institutional capacity. Moreover,
since the public sector is likely to maintain some participation in many of these utilities,
the government needs to revise the institutional framework to ensure that the utilities will
have the necessary management autonomy and accountability to provide efficient and
high standards of service.
98. In addition, many infrastructure services, such as roads, drainage and flood
control, health and education, face the additional issue of weak implementation capacity
within the public sector. The low levels of public investment in the past, coupled with
large increases in recurrent expenditures will require not only improved project
management but more importantly enhanced investments, scrutiny and planning, and a
reorientation in the way ministries and implementation agencies conduct business. Thus,
there is a critical need for institutional strengthening in key agencies and for contracting
out critical public investments. It should be noted that these investments will have a
positive impact on poverty reduction through the creation of short-term employment.
Refocusing and strengthening the core public sector
99. REFOCUSING THE PUBLIC SECTOR. While progress has been made in reducing
and redefining the scope of the public sector, an ambitious privatization program still
remains to be fully implemented. More importantly, the institutional capacity and the
regulatory framework to support the increasing role of the private sector has been slower
40
3 Promoting broad-based growth
to develop than policy reforms, and if not addressed immediately, could undermine their
effectiveness. The judicial system, for example, remains cumbersome and inefficient, and
long delays in the implementation of the legal framework pose a significant deterrent to
private investments. The development and strengthening of institutions to support the
increased role of the private sector will therefore remain a key priority in the years to
come.
100. STRENGTHENING PUBLIC SERVICE MANAGEMENT. Public services in the economy

have yet to adapt from the largely welfare role of the government during the oil boom to a
more proactive and facilitative role. Derived from a Westminster tradition, public service
management continues to be highly centralized, control-oriented and lacking a client or
results orientation. Centralization of management authority emanates from the highest
levels, with the Cabinet maintaining control on decisions of significance, leading to
delays, obscuring strategic issues and undermining staff initiative.63 The pattern of public
employment also remains bottom heavy despite recent attrition and there are concerns
that the policy of aggressive attrition may be depriving the Government of essential skills
at the technical and managerial levels.
External environment
101. Over the medium term, achieving broad-based growth will depend critically on the
economy’s ability to diversify its production and export base. This has been the main
objective of the structural adjustment program undertaken thus far. While the supply
response has been slow, there are signs of new investment in tourism and other non-
hydrocarbon activities and the external environment for Trinidad and Tobago may now
be potentially favorable for such an expansion to take place. The liberalization of world
trade after the Uruguay Round and the progress towards free hemispheric trade are
expected to lead to an increase in world trade, with even faster growth in service exports.
With its advantages of a well educated workforce, proximity to large markets, and
abundant natural beauty, Trinidad and Tobago is well positioned to expand into service
industries such as tourism, informatics, insurance, off-shore banking, shipping, light
manufacturing, specialized agricultural products and agro-business. Realizing gains from
these opportunities, however, will depend critically on the country’s ability to maintain
the competitiveness of its non-oil and gas-based industries on a sustained basis, to further
bilateral trade initiatives with neighboring Latin American economies such as Venezuela
and Colombia, and to access regional trading blocs like the North American Free Trade
Agreement (NAFTA).
102. Access to NAFTA is an important policy goal for Trinidad and Tobago. Even
though oil, its major export to North America, is not subject to tariffs, the strategic
advantage of accessing NAFTA will be a significant enhancement of its economic profile
and ability to attract foreign investment. The country has already established a track
63
The Cabinet in Trinidad and Tobago, for example, considered 3,717 matters in 1993, one hundred times
more than in the UK (36 Cabinet matters) and nine times as much as in Jamaica (419 items).
41
record of direct foreign investment with a six-fold increase between 1988 and 1994, from
$63 million to $415 million. However, this investment has been largely concentrated in
the oil and gas sectors, leaving the challenge for the future in increasing the volume of
foreign investments in non-traditional export sectors and support infrastructure, which is
where investment will have the greatest impact on employment and poverty alleviation.
Recommendations
103. Among the policies discussed to encourage broad based growth are the need to:
• Maintain macroeconomic stability through prudent monetary and fiscal

policies to ensure a competitive real exchange rate and lower real interest rates.
• Insulate the economy, as far as possible, from oil price volatility. This can
be done by saving and investing higher than expected oil revenues and by adjusting
quickly to an unexpected fall.
• Encourage increased saving and investment by increasing public sector
saving and reorienting public expenditure from current to capital expenditures.
• Encourage private sector development in non-oil sectors through
improvements to the investment regime and the Foreign Investment Act, continuing trade
reform along the announced path, deepening the privatization program, and improving
infrastructure services.
• Extend structural adjustment to agriculture by agricultural trade policy
liberalization and land tenure reform.
• Improve infrastructure services by gradually increasing public sector
investment in infrastructure, encouraging private sector participation in the provision of
infrastructure and improving the project implementation capacity of the public sector by
public sector management reform.
• Refocus the public sector to increase its capacity to facilitate economic
development. This requires reforming the public service by introducing incentive- and
performance-based systems of public sector management.
• Ensure the export orientation of the economy through continuation of the
trade reform to exploit increased world and hemispheric trade liberalization.
42
4
Human resource
development: The
education and health
sectors
Introduction
104. While economic growth is necessary for development, it is not sufficient for the
reduction of poverty. Investments in human capital are also needed so that the poor can
both productively participate in growth and ultimately benefit from expanded income-
earning opportunities. There is overwhelming evidence that making quality education,
health and nutrition services available to all are critical to reducing poverty. This chapter
focuses on the key issues facing the education and health sectors in Trinidad and Tobago,
and provides recommendations for improving the delivery of these services.
105. All governments of Trinidad and Tobago have demonstrated a strong commitment
to the provision of social services for every citizen. Despite the decline in public
expenditures over the past decade,64 health and education expenditures still compare
favorably to regional averages--total health expenditures amount to 4.7 percent of GDP
and public education expenditures are 4 percent of GDP. As a result of past investments
much progress has been achieved as demonstrated by current social indicators--literacy is
nearly universal, life expectancy is estimated at 72 years, the crude death rate has
remained stable at 7 per thousand for the past decade, and infant mortality has declined
from 22 per thousand live births in 1980 to 19 in 1992. These achievements, however,
could be improved significantly and would ultimately have a positive impact on poverty
reduction. The indicators mask serious problems of quality, efficiency and equity in the
health and education sectors which need to be urgently addressed.
The education sector
64
Real per capita expenditures were cut in half over the last ten years, and in education, it has been even
more severe with real expenditures now amounting to one fifth of their 1982 levels.
43
The education system
106. STRUCTURE. The education system in Trinidad and Tobago provides a range of
education services beginning with pre-school for children in the 3-4 age group through to
the university level (Table 4.1). This structure is similar to other Anglophone countries
worldwide. Near universal primary education was achieved in the 1960s.65
107. As a result of the evolution of the education system in the country 66, there are
three types of schools; government, government-assisted and private schools. At the
primary and secondary level, over 95 percent of students attend government and
government-assisted schools. At the preschool level, the reverse is true--81 percent of
those enrolled attend private schools. “Assisted” schools are owned by non-
governmental bodies (predominately religious groups) and financially aided by the
government. The public sector fully finances the recurrent and capital expenditure of
government schools, as well as the entire recurrent expenditure and two-thirds of the
capital expenditure of the assisted schools. The Denominational Church Boards covers
the rest. Both government and assisted schools are tuition free. Private schools receive
no government resources.
108. There is much variation in quality by school type in both the public and private
sector. Private secondary schools (only 4 percent of secondary enrollment) cater for
those children whose scores in the Common Entrance Examination (CEE) are too low to
secure them a place in government or assisted schools of their choice but whose families
can afford to pay for their education and absorb the foregone earnings. Charges for
private schools are, on average, TT$123 per month in primary schools and TT$85 in
secondary schools (Private School Survey, 1991).
109. ADMINISTRATION. The Ministry of Education is the administrative authority for

all levels of education except university. The Denominational Boards also play a role in
the administration of the assisted schools. Currently, the structure is relatively
centralized. In addition to direct administration of its network of schools, the MOE is
responsible for: (i) setting educational policies and strategies; (ii) defining curriculum and
other norms; (iii) overseeing the quality of educational services provided by the public
and private sectors; and (iv) planning, programming and budgeting for the sector. A task
65
World Bank, Access, Quality, and Efficiency in Caribbean Education: A Regional Study. Report
No. 9753-CRG, April 27, 1993, Table 4.4, p. 59.
66
Before Independence in 1962, religious groups (the Roman Catholics, Anglicans, Baptists,
Presbyterians, Hindus and Muslims) were active providers of primary and secondary education. They
operated schools through their respective denominational boards and charged tuition fees, except to students
on government scholarship. A pre-independence agreement between the government and these
denominational boards in 1961, known as the Concordat, assured the latter their ownership and right of
direct control and management of all denominational primary and secondary schools. The government
would pay teachers' salaries, a capitation grant for students, and 66.6 percent of capital costs of
denominational schools. See Jules, V. 1994, A Study of the Secondary School Population in Trinidad and
Tobago: Placement Patterns and Practices: A Research Report. The Center for Ethnic Studies, University
of West Indies, St. Augustine Campus.
44
4 Human resource development: The education and health sectors
force was established in 1991 to assess the status of education in the country and to
provide recommendations for policy changes and investment. The findings of the task
force were presented to Cabinet late in 1994 and have received wide support.
110. FINANCE. Public expenditures on education are approximately 4 percent of GDP.

The resources allocated to education are scattered over several ministries, making it
difficult to plan efficiently for resource use. Expenditures have declined in real terms by
27 percent between 1985-1993 through freezing teachers’ salaries, reducing textbook
subsidies, drastically cutting resources for maintenance and minor repairs of schools, and
reducing allocations for instructional materials and supplies. The trends between 1985
and 1994 show clear trade-offs in intra-sectoral allocation. For example, when allocation
to higher education was at its height of 19 percent in 1991, the allocation to primary
education was at its lowest point of 39 percent. Overall, recurrent expenditures comprise
roughly 95 percent of total spending with more than two-thirds of that allocated to
personnel. Private spending which includes both household and school/denominational
board expenditures, though difficult to quantify, are significant as well. For example, in a
government-assisted school which has a good reputation and connection with the
business community, 13.4 times over and above the government subvention was raised.
By contrast, government schools, particularly those in rural areas, have difficulty raising
funds thus explaining the large variation in school quality and in learning outcomes.
Table 4.1: The Education system in Trinidad and Tobago

Level Age Coverag Enrollment Enrollment by Entrance Exit Exam
Group e Source of Eligibility
Financing
Pre-Primary 3-4 43% 22,000 Government: 6% None None
Assisted: 13%
Private: 81%
Primary: 100% 203,654 Government: 30% Catchment of
Infant Classes 5-6 Assisted: 67% school CEE
Standards 1-5 7-11 Private: 3% district
Post-Primary (terminal for 12-13 4% 6,000 Failed CEE SLC
those who failed SLC)
Secondary: 70% 104,214 Government: 77% CEE or SLC 14+ Exam
Forms I-III 12-14 Assisted: 18% scores CXC (academic)
Forms IV-V 15-16 Private: 4% GCE O level
NEC(vocational)
Matriculation
Lower Form VI 17 13% Placement UK GCE “A” level
Upper Form VI 18 based on
CXC scores
Technical/Vocational Inst. 17-18 2% 3,783 Placement CAC
based on
NEC Scores
Tertiary
UWI 19-22 2% 4,529 GCE “A” UWI/Professional
Others 4% level Exam
Source: T&T Ministry of Education National Task Force on Education Policy Paper (1993-2003): White Paper, 1994; T&T
Central Statistical Office, Report on Education Statistics 1990-1991, 1994. Theaker, John, Prefeasibility Study of Technical
Vocation Education and Training in Trinidad and Tobago, Revised Mid-Term Report, 1992
45
Performance indicators
111. While some educational performance indicators are favorable, they also mask
serious problems in quality and equity. On the favorable side, girls' enrollment in both
primary and secondary schools is high (slightly more than 50 percent). Girls also perform
better than boys at all levels (Jules, 1994). Repetition rates in primary schools are less than
2 percent on average, except in Standard 5, where students voluntarily repeat in order to
have a second chance to be placed in a secondary school. Dropout rates are less than 0.5
percent on average, again except in Standard 5. For a cohort of 1,000 students who enter
Standard 1, on average, 96 percent of boys, and 97 percent of girls can be expected to
reach Standard 5.67
112. Other indicators demonstrate the quality and equity problems by international
standards. Results of an international study on reading literacy conducted by the
International Association for the Evaluation of Educational Achievement (IEA) in
1990/9168, showed that T&T's students perform poorly in comparison with 27 countries,
and that there were large variations in school quality. The mean achievement score for 9-
year-old Trinidadian students ranked third from the bottom among participating countries
(with Finland at the top). Among the 14-year-olds, the mean achievement score was only
slightly better, ranking sixth from the bottom.
113. The intra-class correlation (rho) which measures variation in achievement between
schools was 0.32 for the 9 year olds, indicating that 32 percent of the variation in
achievement is between the schools, and 68 percent is between students within schools.
Often 0.3 is taken as the cut-off point for identifying serious equity problems. For the 14
year olds, the rho was .58, indicating that 58 percent of the variation in achievement is
between the schools, a very serious equity problem. By contrast, the rho in Finland was
.02, indicating that achievement is not affected by the school a student attends.
114. Another comparative measure of quality is the Caribbean-wide CXC examination.

For example, the proportion of Trinidadian students achieving Grade I and II in the Math
General Proficiency was 32, lower than Antigua (35%), Barbados (40%), Belize (39%), St.
Kitts (47%), and St. Lucia (41%).69
67
Overall in Latin America and the Caribbean Region, 42 percent of first graders repeat their grade, and
29 percent of all primary school students repeat their grade each year. See Lawrence Wolff, Ernesto
Schiefelbein, and Jorge Valenzuela, Improving the Quality of Primary Education in Latin America and the
Caribbean: Toward the 21st Century, World Bank Discussion Paper No. 257, Washington, D.C, 1994, p.
20.
68
Schleicher and Jean Yip, "Indicators of Between-School Differences in Reading Achievement," 1994,
draft. The reading literacy test is one of the major comparative studies sponsored by IEA (which has
sponsored international comparative studies since the 1970s). It is the main international source of
information on school facilities, curriculum expectations, and the performance of teachers and students.
69
Source: 1994, Caribbean Examinations Council.
46
Equity and quality issues in the education system
115. Inequity in education begins at an early stage with limited access to pre-school
education, and continues through the system with the wide variation in the quality of
primary schools, the selection process resulting from the CEE, the school tracking at the
secondary level, and the CXC examination. Other factors, such as the inequities arising
from household inability to pay the private out-of-pocket costs of education (textbooks,
transportation, lunch, uniforms, and extra tutoring) put poor students at a further
disadvantage. Because education is positively associated with productivity and earnings,
variability in educational attainment and achievement will lead to differentials in
employment prospects and future life time earnings, thereby contributing to the cycle of
poverty.
116. The low quality in education (as measured by the poor performance discussed
above) relates to school curriculum, teaching, and availability of textbooks and
instructional materials. Currently, the primary level curriculum is largely focused on the
subjects covered by the CEE and thus does not make use of the socio-cultural context of
the child which has demonstrated to motivate and facilitate learning. Both teaching
methods and materials in some schools are outdated and in many cases, textbooks,
resource and instructional materials are unavailable.
117. EARLY CHILDHOOD CARE AND EDUCATION. (ECCE) The inequities in the
education system begin at the level of early childhood education. The largest provider of
service is the private sector. Of the some 22,000 pre-schoolers, 81 percent attend private
pre-schools, which charge an average tuition fees of TT$51 per month. Only six percent
enroll in government-assisted pre-schools run by communities, and 13 percent in Servol70
run centers, which receive government subvention. These publicly subsidized preschools
charge about TT$20-30 per month. Lack of quality control of existent ECCE services has
resulted in inconsistent standards for pre-service and in-service training, physical plant,
outdoor play space, instructional materials and equipment, teachers’ pay, and support
services.
118. In the 2-4 age group, only 21 percent of the poor attended school, compared with
51 percent of wealthy children (Table 4.2). This unequal access to pre-schools, largely
due to lack of affordability, has implications for later stages of human development.
Active, high quality early childhood education programs have demonstrated impact on
the development of initiative and school readiness to the extent that it can mitigate an
impoverished home environment and have long-term positive effects on school
achievement, social behavior, and earnings.71 That a significantly smaller proportion of
70
Servol is a non-profit, Catholic organization that provides a variety of social services to the poor.
71
A longitudinal study of participants in Perry Preschool in Michigan, USA, found that adults who were
born in poverty but attended a high-quality, active learning preschool programs at ages 3 and 4 have higher
achievement scores at 14 and 19 than nonparticipants, a greater probability of finishing high school, half as
many criminal arrests, higher earnings, greater property wealth, and greater commitment to marriage. Over
preschool participants' lifetimes, the public receives an estimated $7.16 for every dollar invested. See L. J.
47
children from low-income homes enroll in pre-school means that a majority of them are
disadvantaged at a very early stage.
Schweinhart, H. V. Barnes, and D. P. Weikart, Significant Benefits: The High/Scope Perry Preschool Study
Through Age 27. Ypsilanti, MI: High/Scope Press, 1993.
48
Table 4.2: School enrollment rates by age group and quintile

Per Capita Consumption Quintile
Poorest
Age Group All T & T Q1 Q2 Q3 Q4 Q5
2-4 33 21 27 43 37 51
5-11 96 93 95 98 99 99
12-15 89 81 87 92 95 97
16-19 45 28 34 53 53 67
Source: Survey of Living Conditions, 1992
119. PRIMARY EDUCATION. At the primary level, enrollment rates are high even among
the poor. An estimated 93 percent of the poorest children in the 5-11 age group attend
government or government-assisted primary schools. While it is impossible to
characterize all of the public primary schools due to the wide variation in quality, in
general, the schools located in poor areas tend to be of extremely low quality. In these
Government schools the teaching methods are often ineffective, there is a lack of
adequate or appropriate instructional materials, and school conditions are unsatisfactory,
characterized by overcrowding, poor ventilation, safety problems, and inadequate water
and sanitation facilities. The existing private primary schools cater to the very wealthy (3
percent enrolled), and tend to be of higher quality.
120. In addition to the low quality of the public schools, poor students often cannot
afford the out-of-pocket private expenses of extra tutoring (to ensure high CEE scores),
transport, or textbooks, which puts them at a further educational disadvantage. At the
primary level, 68 percent of the poor had access to textbooks, compared with 95 percent
of the wealthy students.72 The average number of days students attended school was
somewhat lower for the poor, with finance and transport being the principal cited causes.
The expansion of the school lunch program has provided some assistance for the poor in
providing a nutritious meal as well as an incentive to attend school.
121. The differences in the quality of education between school types and in
achievement by income group is evident through the variation in Common Entrance
Exam (CEE) scores. The exam is administered at the end of primary school for placement
into one of the various tracks at the secondary level. Of those attending the government
schools, roughly one half score below the minimal acceptable levels in mathematics and
English. Low achievement is closely followed by those in government-assisted primary
schools. Another study showed a substantial variation in scores by income group with
the poor doing much worse (Table 4.3). Because high scores on the CEE are critical to
gaining entrance to the better quality secondary schools 73--which ultimately lead to
72
Textbooks have proven to be a very important educational input with direct impact on achievement.
73
Those scoring in the 92-100 percentile attend 7 year schools, 80-92nd percentile, 5-year schools, 20th
to 8th percentile attend junior secondary schools. Those who fail the CEE twice could enroll in post-
primary levels for a maximum of two years, and take the School Leaving Certificate Examination to obtain
certification of having completed primary school.
49
higher-income career tracks--by age eleven the future earning potential for many of the
poor is prematurely determined.
122. SECONDARY EDUCATION. Once the student has completed the CEE, the inequities
in the system widen further at the secondary level due to the tracking system. The best
schools are the publicly financed, Traditional, 5-and 7-year government and assisted
schools. These schools offer a strong academic curriculum designed to prepare graduates
for further education or for employment at the clerical level in traditional work places.
Entrance to the traditional schools is dependent on very high CEE scores. The second
school type are the New Sector Schools, which were built after independence with the
aim of providing mass secondary schooling. These schools are oriented towards
technical/vocational skills. Included are 3-year junior secondary schools, 2-year senior
comprehensive schools, 5-year senior secondary schools, and 5-year composite schools,
which offer general academic and technical/vocational training courses. Most of the
junior secondary schools (which enroll 43 percent of secondary students) operate on
double-shift. Graduates then proceed to Forms 4-5 (ages 12-14) in two-year senior
comprehensive schools, where a combination of general, specialized craft, and pre-
technical courses are offered. (Statistical Appendix, Table 31).
Table 4.3: Comparison of CEE scores by school type and income level
Percentage of Students Scoring Below the Minimum
Acceptable Levels by School Type
CEE Subjects Government Schools Assisted Schools Private Schools

Mathematics 44 37 13
English 55 49 12
Essay 28 24 4
Mean Group Scores of Student Intakes into Secondary Schools
Income Group 1992 intake 1991 intake 1990 intake

No Employment 52 57 55
Low 55 58 59
Middle 63 67 67
High 76 78 80
Source: Ministry of Education, and Jules, 1994, Table 50, p. 266-268.
123. Among the 12-15 age cohort enrollment, though still high, dropped to 81 percent
for the poorest, while 97 percent of the wealthy remain enrolled. Poor students were
heavily represented in the lower quality 3 year junior secondary schools (37%) and
vocational programs. By contrast, children in the highest quintile are concentrated in 5- or
7-year schools (57%) (Statistical Appendix, Table 32).
124. Inequities in educational inputs by secondary school type, such as the variation in
teacher qualifications and number of school hours are reflected in student achievement.
50
For example, while close to 30 percent of teachers at senior comprehensive schools are
without pedagogical training or a university degree, only 13 percent in the traditional
assisted school do not have these qualifications.74 With regard to the number of hours in
the classroom, most of the junior secondary schools are on a shift system, providing
students with fewer hours of instruction than in other types of schools. The results of the
CXC reflect these differences in inputs: the pass rates for those in the traditional schools
were over 90 percent while they were only 75 percent for those in senior comprehensive
schools.
125. TERTIARY EDUCATION. Post secondary education is offered through the

University of West Indies, Technical Institutes, the Teachers’ College, the National
Institute for Higher Education, as well as a variety of vocational programs, including
youth camps, youth centers, and apprenticeships. Most of them are publicly run and
charge fees. For example, fees at UWI are equivalent to 15 percent of the estimated
education costs.
Table 4.4: Variation in teacher qualifications by secondary school type

Without Without
University Degree and
School Type Degree on Without
Subject Pedagogical Total # of Pupil/Teacher
Matter Training (%) Teachers Ratio
Junior Secondary 55 5 1,337 28
Senior/Comprehensive 39 27 1,546 15
Composite 54 31 351 20
Traditional Govt. 37 13 697 17
Traditional Assisted 17 7 908 20
Source: Report on Education Statistics, 1990-1991, p. 31, 34-36
126. Among the 16-19 age group, only 28 percent of the poorest students were still in
school. This compares with 67 percent of those in the highest quintile who were still in
school (Statistical Appendix, Table 32). Many of the poor by this age have left the
education system and joined the ranks of the unemployed. As was discussed in Chapter
2, youth unemployment for the poor was extremely high. These students have attained
minimal skills to compete for the extremely limited number of jobs in the labor market.
127. Of the poor that are enrolled in this age group, many participate in one of the
various training programs offered through YTEPP, Servol, or the National Training Board.
These programs are discussed further in Chapter 5, with the general conclusion that there
is a need to coordinate and rationalize programs. This need was articulated by the Task
Force on the Rationalization and Coordination of the Post-Secondary Technical and
Vocational Training Policy and Programs, though none of their recommendations have
been implemented as of yet.
74
Teacher qualification has been well established as an important input to student achievement.
51
128. EDUCATION FINANCING. While spending patterns in the education sector have not
been highly regressive, there are indications that in recent years this is increasingly a
concern. Between the 1985-87 and 1991-93 periods, expenditures on primary education
declined by 42 percent, and 32 percent in secondary education, while they increased by
20 percent in tertiary education (this includes teacher training and post-secondary
vocational and technical education). On a per capita basis (1993 current TT$) these
allocations reflect inequities in spending; expenditures were TT$1,976 for primary school,
TT$3,029 for secondary school, and over TT$20,000 for tertiary programs where only a
very small proportion of the poor are represented. With the existing limited resources and
strong evidence of low quality education for the poor, some reallocation of resources, and
expansion of cost recovery mechanisms would provide some of the necessary resources
for quality improvements at the lower education levels without affecting existing tertiary
programs. Additional resources allocated to educationally effective inputs, such as
textbooks, instructional materials, and in-service training would have a positive impact on
poverty reduction in the long term.
Table 4.5: Expenditures in the education sector by level

Share of Share of Per Capita Proportion
Recurrent Capital Recurrent of the
Expenditures Expend. Expenditures poor/total
(%) (1993) (1993) (1993 TT$) enrollment
Administration 7.6 9.7 n.a. n.a.
Pre-School 0.2 0.0 385 n.a.
Primary 42.3 77.6 1,976 27.3
Secondary 32.8 11.4 3,029 22.3
Vocational/Tech 4.2 1.0 6,799 13.8
Teacher Training 1.5 0.0 26,122 n.a.
Tertiary 11.4 0.0 20,875 4.2
Source: World Bank 1995, “Education Expenditure, Structural Adjustment, and System
Performance in Trinidad and Tobago, 1985-1993,” World Bank draft report.
Recommendations
129. The key priority for the education sector is improving the overall quality of
education provided. In addition, there are several policy reforms that can reduce the
current inequities in the system, thereby providing better educational opportunities for the
poor. Many of the recommendations set out in the Education Policy Paper of 1994
directly address these problems. Providing full support to ensure the successful
implementation of the recommendations set forth in the Paper will be critical for
achieving improvements in the education sector. A first positive step is the current
preparation of the Basic Education Project by the Ministry of Education and the World
Bank. This project will support several initiatives to improve the quality of teaching and
learning at the basic level, with emphasis on improving equity.
52
130. Among the policy reforms currently being discussed, the following
recommendations would likely have the biggest impact on reducing the current inequities
in the education system:
• Increase access to early childhood care and education. By extending

enrollment and improving the quality of early childhood programs to the poor as is
planned under the Basic Education Project, students will be provided with improved
learning capacity at a very early age, thus leveling the cognitive, social and emotional
readiness of children entering primary schools.
• Reduce quality gaps in primary schools. Though improvements are

needed in almost all primary schools, efforts should first be targeted to those in poor areas
under the Basic Education Project. These schools currently provide a very low quality of
education and therefore, place poor students at a disadvantage in preparation for the CEE.
Changes in the curriculum, teaching methodologies, and physical infrastructure as well as
the increased availability of textbooks, and instructional and resource materials will have a
positive impact on reducing the quality gaps.
• Reform the common entrance selective exams system. The current

system of selection and examination has truncated the curriculum, driven classroom
interaction, and generated enormous pressure on students, parents, and teachers. A shift
towards continuous diagnostic testing and remediation built into the system will remove
some of the distortions in the classroom that currently exist and defer the tracking system,
which limits students educational opportunities.
• Reform of secondary education. As there are quality improvements at

the pre-school and primary level, it will be necessary to rationalize the curriculum at the
secondary level. Though the education system needs to ensure accommodations for
students with varying ability levels, the current tracking system at age 11 does not achieve
this. Unifying the secondary system with an improved curriculum, will help those
students now enrolled in the Traditional Schools benefit from the improved quality and
those attending the New Sector schools will benefit from the equity in access to a unified
curriculum.
• Increase cost-recovery mechanisms. The breakdown of expenditure

group by school type indicates that the upper secondary and tertiary institutions largely
cater to the middle- and upper-middle income groups. There is now no cost-sharing at
the secondary level and only 15 percent at the tertiary level. Yet out-of-pocket
expenditures are substantial, indicating a willingness-to-pay and that the demand for
education is relatively inelastic. Therefore, there is scope for introducing fees to provide
additional revenue for the provision of quality education. To ensure full access by the
poor to these schools, a waiver or grant system could be introduced for the poorest.
53
• Improve linkages between parents, communities and students. In the

majority of schools, administrators teachers, students, parents and other community
stakeholders fail to interact to improve the development of the child and of the education
system. The importance of these linkages is evident through the successes of schools that
currently plan activities to increase community participation. Under the Basic Education
Project, a school-based management pilot is planned to focus on encouraging principals,
teachers and parents to diagnose their own schools and formulate programs to improve
school quality and efficiency. Such collaboration will increase planning, management and
team building skills of school staffs and community groups, ultimately improving the
quality of education for students.
The health sector
131. There have been many gains in health status among the population in Trinidad and
Tobago over the past two decades. They have been achieved through a combination of
social, economic and educational improvements, public health measures and
communicable disease control efforts, including immunization and maternal and child
health programs. These gains have, however, been tempered by the long-standing
administrative inefficiencies in the public health system which have resulted in low
quality, ineffective service delivery. The health services no longer adequately address the
needs of the population often resulting in treatment only when clinical conditions become
advanced and complicated. These problems have also encouraged the growth of an
unregulated private sector focused largely on curative services, which in many cases are
of low quality as well. Without more informed sponsorship and regulation, this
development signals the potential for significant cost escalation in the near future--and
reduced cost effectiveness in terms of total health care spending. The challenges of an
aging population, a transitional epidemiological profile and rapid technological advances
in health care delivery can only add to these inefficiencies and potential inequities unless
fundamental changes are made. To address these issues, a comprehensive health reform
program is currently under preparation by the Ministry of Health and the IDB.
Health and nutrition status
132. Improvements in health status over the past two decades are evident through
changes in health indicators: crude death rate declined from 7.775 to 6.6 from 1970 to
1990, life expectancy has increased from 65.7 to 70.1 and the prevalence of malnutrition is
now very low. Yet, the health status of the population still falls below that of many
middle-income countries, largely due to limited preventative care and the low quality of
services offered in both the public and private sector. Nearly 50 percent of the population
still dies before they have reached the age of 65 with many of these deaths avoidable. The
leading causes of mortality are heart disease, cancer, diabetes, cerebrovascular disease and
injuries. Of communicable diseases, AIDS and TB remain a major concern because of
75
Per 1,000 population, CSO.
54
the rising incidence. To date, Trinidad and Tobago has remained cholera free and no
endemic cases of malaria have been reported.
Structure and composition of the health sector
133. Public health services are delivered free to all individuals through a network of 13
hospitals (excluding extended care facilities) and 108 health centers, plus a variety of
special programs and support services. There are currently 4,526 public acute and long-
stay hospital beds that provide the vast majority of the country’s emergency and elective
inpatient and outpatient care. All staff (estimated at 10,500) are employed within the
public service. Services are provided free at the point of consumption although drugs
must often be purchased from private pharmacies. User charges are in effect at the Eric
Williams Medical Sciences Complex (EWMSC, Mount Hope) which until 1994 was
operated by a statutory authority with its own board of directors.
134. The private sector offers mainly walk-in primary and specialist care by
independent doctors, pharmacy, laboratory and radiological services. Regulation by the
government is limited to public health standards under the Public Health Act and some
activities in private hospitals and pharmacies under the Private Hospitals Act, the
Antibiotics and Narcotics Act and the Food and Drug Act. There is little monitoring of
technology, quality assurance or facility requirements.
135. Total health expenditures in 1994 represented 4.7 percent of GDP, equivalent to
US$160 per capita. Though expenditures have fallen gradually over the past decade, they
are still substantially more than the average in Latin America of US$105. Government
spent approximately TT$576m (US$96m) or about half of total health sector
expenditures. An additional TT$30m (US$5m) was raised in user charges at Mount Hope.
Private health expenditures on hospitals, drugs, doctors, nurses, diagnostics, and dental
services accounted for approximately TT$487 million (US$81.2m) purchased almost
entirely out-of pocket. Private insurance only covers about 2.8 percent of total health
expenditure. The National Insurance Board (NIB) provides coverage to the formally
employed for work-related injuries and maternity, however, expenditure is estimated to
be less than 0.3% of total health expenditures. While total expenditures are more than
sufficient to provide quality care, there are many inefficiencies in the sector which have
resulted in a system that no longer adequately addresses the needs of the population.
Low quality services and inefficiencies in the provision of health care
136. The key issues confronting the health sector in Trinidad and Tobago are related to
quality and efficiency. In the public sector, many of the health centers are poorly staffed
or under staffed and hospitals have inadequate support services such as sterile supplies,
theater management and laboratory services, and have equipment that is in poor
condition. Individuals must wait in long lines, receive prescriptions for drugs that are not
always available. Management of prevalent chronic conditions is disjointed. For those
55
that choose to bypass the public system (estimated at 50%)76 and pay to see a private
physician, the quality of services is also low. The care received in private-sector primary
clinics is largely prescription writing, with little preventive work or health promotion.
There are no formal quality assurances, medical audit or accreditation programs enforced
in either the public or private sector.
137. The poor quality of services in the public sector stems from extensive
inefficiencies and waste rather than a lack of adequate resources. Some of these
inefficiencies include:
138. UNNECESSARY HOSPITALIZATION. Weaknesses in the preventive and curative

primary care services result in many unnecessary self referrals to hospital casualty and
many unnecessary 77 hospital admissions.78 The lengths-of-stay are often excessive. At
the same time, the smaller hospitals are underutilized and do not achieve acceptable
clinical standards because patient volume is insufficient to maintain clinical skills. A
significant amount of resources are being spent on keeping these underutilized institutions
open; the cost per adjusted bed day in the larger hospitals in Port of Spain and San
Fernando is TT$340-$415, compared with TT$500-1,000 for smaller, underutilized
hospitals such as Caura, Point Fortin, Mayaro and Princes Town.
139. DEFICIENCIES IN MANAGEMENT. Because all staff appointments and discipline are
controlled by the Public Service Commission, health services managers do not have direct
managerial control. There is overstaffing in many grades and shortages in others. No
staff member can be dismissed without the consent of the PSC; no matter how
unnecessary the work is or how incompetent the staff member may be. The lack of
regulation of private practice has led to many doctors on the public sector payroll who
provide fewer hours of service than they are paid for and instead spend more time
working in private practice. There is also an inappropriate use of skills with, for example,
nurses doing tasks that lesser-trained staff could do. The process of tendering for goods
and services is centralized and slow, resulting in high costs, and frequent shortages.
140. INEFFECTIVE ALLOCATION OF RESOURCES. Expenditure patterns do not reflect

health care priorities. Despite many years of emphasizing primary care, resources have
been increasingly allocated to the hospital sector--the ratio of expenditure on hospitals to
primary care has risen from 5:1 to 10:1 over the 1980s. There has also been no national
programs for the prevention, early detection and management of high priority chronic
diseases. Despite the change in the epidemiological profile of the country, the majority of
76
Data from the 1992 SLC indicated that approximately 50 percent of the population utilized private
health facilities. The health data from the survey have, however, many shortcomings and thus has not been
used in the analysis.
77
For example, while a significant number of health centers and maternity units are vastly underutilized,
the number of self referrals to the accident and emergency departments of the larger city hospitals is
excessive; in Trinidad, they are estimated at 360 per 1,000 persons, per year as compared with 270 per 1,000
in the NW Thames Region of the UK.
78
In surgical wards it has been estimated that almost 50% of patients hospitalized would not need to
have been there if effective primary care services had been available.
56
the estimated TT$46 million spent on national programs goes toward communicable
disease control. 79 For example, the health sector spends annually ten times as much on
the anti-malaria program (though there has been no endemic malaria in Trinidad and
Tobago for many years) and to reduce the risk of haemorrhagic dengue vectored by the
Aedes Aegyti mosquito as it does on the National Nutritional Program. Because
managers do not have the flexibility to manage their budgets, and their budgets are not
performance based, the incentive to promote efficiency is limited.
Equity in the financing and delivery of health services
141. The current system does not display gross inequities as in many other middle
income countries. Health services are free and therefore, there is patient choice; the
extensive network of health centers serves all regions of the country and services are
therefore generally accessible, and essential public health programs and a wide range of
tertiary services are made available to all. Table 4.5 indicates that significant resources are
allocated to those regions with the highest levels of poverty, however, these resources are
being used inefficiently and result in large amounts of waste.
142. The country also does not suffer from the inequities of partial social insurance
coverage seen in much of South America where national insurance schemes protect the
formally employed but leave large numbers of the poor uncovered.
143. One area which does display some inequities is in relation to the EWMSC. This
complex was built in the mid-1980s to provide the country with needed new
infrastructure and technology as well as new technical skills through the Faculty of
Medicine and School of Advanced Nursing. In the interest of financial survival, EWMSC
has been effectively operating as a private sector institution on a fee-for-service basis--yet
is still subsidized by public capital investment and annual subvention (albeit recently
reduced). The institution introduces services based on market forces rather than concepts
of health need, efficacy or cost effectiveness. The subsidization diverts another TT$15
million (1994, down from TT$25 million in 1993) resources from the public system,
though many of the poor cannot afford the fees and thus do not benefit from the publicly
financed services.
144. The case described in Box 4.1 illustrates the effects of the sector inefficiencies on
the way care is obtained. The issue is not simply one of inequitable access, but rather that
the poor do not have the resources to persist through the inefficiencies of the system to
obtain full treatment. While many of the poor have access to services in both the public
and private sector,80 they often cannot afford the full cost of the diagnostic tests or
treatment required. The scenario described is a common one for many of the patients
who have a chronic condition on admission to a public sector hospital.
79
There have, however, been some efforts in this area at the district level.
80
The cost of a doctor's visit in the private sector is still relatively low ranging from TT$40 to TT$100.
57
Box 4.1: The Inefficiencies of the Health Care System: A Case Study
A 40-year-old self employed carpenter presents to the A&E Department of a local hospital
with severe right-sided upper abdominal pain. His history reveals that he has had episodes of this pain
for several years, has been to several doctors and has had various treatments including antibiotics and
analgesics but the pain inevitably returns. Different diagnoses have been made--including hepatitis,
kidney stones, gallstones and colic - but no definitive solution has been offered. Some of the doctors
did recommend blood tests and X-rays but these would have been expensive, encouraging him to seek
further opinions that would cast doubt on the necessity and rationale for these. Mr. Smith was never
convinced that there was any need for further investigation because he always found another doctor
who would give him medication to alleviate the pain.
The episodes began to increase in severity and frequency. Although there was no charge at
the health center, going to it meant losing a day's work because he had to get there before 7 a.m. for
an 8 a.m. clinic and then wait hours for the doctor who was inevitably late or didn’t come. Since it
seemed that he was now always a bit behind in his work because of the pain, he chose to go to the
private sector where he was assured of being seen and receiving a prescription, even if he had to pay
and wait. Sometimes he did not complete the course of treatment given by the doctor--he had not
developed any relationship with any of the doctors to whom he had gone which would have ensured
or encouraged compliance. The average cost of a doctor's visit was about TT$40 and TT$100 for the
prescription. If he could not manage the pain at night he often ended up in the Hospital A&E
Department where he was given an injection for his colic.
The last doctor told him that he probably needed surgery costing about TT$5,000 and he
would have to be off from work for about four weeks. Mr. Smith has no private or National
Insurance benefits so he felt that he could neither afford to pay for the operation nor take more time
off from work--his reputation was slowly being eroded because of being unable to meet deadlines
since the recent exacerbation of his illness.
On this last visit to the hospital for a particularly bad episode of the pain, Mr. Smith was
admitted to a medical ward with a provisional diagnosis of hepatitis and investigations later
determined that he was suffering from cholecystitis secondary to cholelithiasis--in lay terms, his gall
bladder was now inflamed and infected due to a long-standing condition of gallstones. After being
referred to the appropriate surgical firm, he was referred to the outpatient clinic for follow up. He is
now on a waiting list for surgery and has not yet received an operating date - they tell him it may be as
long as a year but he can get it done in the private sector if he is prepared to pay. Further, he is told
that there is a surgeon performing the necessary procedure by a minimally invasive technique, which
means that he could be back out to work in 10 days instead of four weeks but the cost is about
TT$10,000. Mr. Smith has lost two contracts due to this latest episode and is in no position to pay
for private surgery. He is still attending the outpatient clinic and remains hopeful of an early date for
surgery at the public hospital.
Source: World Bank Mission, 1994.
Health sector reform
145. To address the existing problems in the health sector today, a major reform
initiative is underway.81 The Health Sector Reform Program (HSRP) is aimed at
strengthening health sector policies and planning, refocusing public and private health
expenditures toward high priority health problems, promoting preventive care, and
81
This is being carried out by the GOTT with assistance from the IDB.
58
achieving a high level of cost effectiveness in the public and private sectors. This will be
carried out through the decentralization of services to outside autonomous agencies.
Table 4.6: Per capita health expenditures by county

Per Capita Expenditures (in TT$)
Primary National Total Health Head

County Hospitals Care Program Expenditures Count
Index (%)
St. George 613 34 647 25.0
Caroni 38 37 75 5.9
St. Andrew /St. David 270 69 339 31.6
Nariva/Mayaro 0 64 119 22.3
Victoria 414 32 446 24.4
St. Patrick 90 35 125 25.6
Tobago 495 102 278 875 17.5
National MOH 66
Average T&T 389 40 77 504 21.2
Source: Ministry of Health
146. Under the reform, operational responsibility will be shifted to new statutory
agencies outside of the public service. These agencies, the Regional Health Authorities
(RHA) will have a high degree of autonomy and will be managed along corporate lines.
They are being vested with public sector assets and will take on ownership and
management of the land, buildings and equipment. They will operate according to
negotiated annual service agreements or contracts with the Ministry covering quantity and
quality of services, and will be free to package public and private sector services to meet
their needs. A rationalization of services will consolidate primary care facilities while
increasing their size and function. Smaller and underutilized hospitals will be closed and
services consolidated in six of the strategically located facilities with services shifted to
more ambulatory care. Through autonomy from the administrative inefficiencies of the
public sector, new operating and employment arrangements will be introduced to
encourage performance among staff, and more cost-effective, higher quality services.
147. The RHAs will operate within the national policies of universal and equitable
access regardless of ability to pay. Studies are being undertaken to determine the
potential for a cost recovery system and the feasibility of national health insurance. The
reform emphasizes the need to achieve the improved efficiencies in the use of existing
resources before introducing significant additional financing or new finance mechanisms,
which may be difficult to manage.
148. The role of the Ministry of Health will change to one of sponsorship and
regulation, focusing on developing stronger policy and planning capabilities and ensuring
quality care. They will also play a vital role in financing health care by effectively
‘purchasing’ health services from the RHAs. By influencing the provision of care by the
RHAs through their annual service contracts, the Ministry will regulate supply and
59
demand to achieve high quality, high value services in both the public and private sectors.
In addition, the Ministry will promote new national public health activities aimed at
preventative care. These will include working with other ministries in areas of major
health concern, such as injury prevention and development of community care.
149. The private sector will be encouraged to improve the quality of its services
through: i) competition with an improved public sector; ii) the offer of contracts with the
RHAs; and iii) regulatory mechanisms of quality assurance and technology assessment
and control.
150. It is clear that for the reform to work, the basic structural changes have to be
firmly in place--the new provider organizations (RHAs) must be formed and the Ministry
of Health must fulfill the role of an informed purchaser. Without these structural changes,
the other aspects of the reform cannot work effectively. Government is committed and
relevant legislation has been enacted. Great difficulties lie immediately ahead, however,
as public service staff are asked to make the change to RHA employment and as public
and private sector providers see their positions threatened by improvements in the public
sector.
Recommendations
151. The current health sector reform effort appears to offer the potential for real
improvement in quality and cost effectiveness through: (i) directing expenditures to
priority problems and groups; (ii) emphasizing preventive and primary care services; and
(iii) reducing institutional obstacles to more effective management. Potential savings in
the current wasteful system can be redirected to the poor through strengthened primary
care while more effective sponsorship and regulation can simultaneously raise quality in
the private sector.
152. It will be important in reforming the health sector that inequities are not
introduced that the country has been able to avoid. Critical issues concern improving
quality through amelioration of inefficiencies and directing these savings toward real
health gain. Changes in sector financing--national health insurance and cost recovery
methods--must not introduce significant cost escalation and reduce rather than increase
inequities in terms of who contributes and who benefits. The future role of Mount Hope
and its financing must also be carefully managed. The main areas for government action
include:
• Restructure existing institutions. Significant resources and commitment

must be given to the restructuring of the Ministry of Health and the establishment of the
Regional Health Authorities, particularly through the difficult period of early
implementation when concerted opposition can be expected from the medical profession
and from organized labor. The human resource aspects of the transfer of staff will need to
be managed positively and pro-actively to create the most uncluttered management
60
environment for the RHAs to level the playing field. This can best be achieved by
offering an appropriate mix of incentives for transfer of employment to the RHAs and by
catering for voluntary redundancies of appropriately aged staff to achieve the required
skill mix within the RHAs.
The establishment of the new Ministry of Health is as important as the
establishment of the RHAs and in many ways, transformation from the existing roles and
functions will be more difficult than creating the new organizations. How well it is staffed
by new senior managers will determine the leadership signals for the reforms. Successful
development of its sponsorship and regulatory roles is critical to the medium- to long-
term sustainability of health reform.
• Improve resource allocation and intersectoral action. Government

should give high priority to the findings of the current National Health Needs Survey as
the basis for inter-ministerial action to promote health and for the design of the service
packages to be purchased from the RHAs. The Survey will provide the best baseline data
ever available in the country and, thus, should be fully exploited to identify health
priorities as well as gain consensus from other ministries and the population on health
goals, targets and intersectoral action programs. In time this will create the means of
allocating resources for health gain and the means of measuring health outcomes. It is
recommended that an interministerial committee be established to initiate and coordinate
actions for health promotion at the highest level.
• Rationalize health services. The HSRP will require firm management and
commitment to achieve the service targets within the timeframe and costs projected for
implementation. While there is general agreement on the need for modernizing the health
services, but significant resistance can be expected from staff and the public to the
transfer of services among sites as well as a rationalization in the number of sites. If the
quality objectives of reform are to be achieved, these decisions must be made and
implemented with strong government support.
• Evaluate health sector financing. Before any significant change is made

to sector financing (user charges or national health insurance), the issues of equity and the
effects on demand should be fully investigated. In the short term, the unique identifier
project in the Office of the Registrar General's Office should be supported as the means of
ensuring that data will be available to the health sector for future planning and demand
projections. In addition, an agreed mechanism for the identification of the medically
indigent (or the indigent) should be developed. This would best be done through the
initiatives underway in the Ministry of Social Development because means testing at the
point of access of health services has never proven to be an effective or efficient way of
identifying those unable to pay for medical services.
• Initiate a public communications campaign. Given the widespread

effects of health reform on those in the health profession and the general public as well as
the difficulties in managing change, it will be important to provide ongoing information to
61
facilitate the transition. Such a campaign should include information on the objectives,
phasing, and benefits of the reform at the community and national levels.
62
5
The social safety net
Introduction
153. The government of Trinidad and Tobago has traditionally shown strong
commitment to the provision of an effective safety net. In the past, poverty in the country
was associated with specific groups who, for various reasons, were unable to participate
in the labor market--the old, those with disabilities, and female-headed households. As
there has been an increase in poverty and change in its character resulting from the
extended period of economic decline, a new poor has emerged. While the government
has tried to respond by providing additional welfare and jobless benefits through several
innovative programs, the overall effectiveness of the safety net has been limited by the
absence of an effective policy and administrative framework. Programs to address the
needs of the new poor have been slow and uncoordinated, resulting in significant
duplications and gaps in benefits, as well as in the administration of programs. The
duplication in benefits gained by some provides a strong disincentive to leave the welfare
system, while the absence of benefits for others leaves them destitute. There is an urgent
need to address these issues through comprehensive reform of the existing safety net. An
analysis of how to proceed with reform is currently underway with financing from UNDP.
154. As a part of this reform, there has been much discussion about an expanded role
for Non-Governmental Organizations (NGO’s) in the delivery of social services. NGO’s
have been playing an increasingly important role in poverty alleviation in Trinidad and
Tobago though there are still deficiencies in effective program implementation by many
groups. There is a wide range in the estimated 500 organizations from community based
groups (CBG) to women’s' groups, service organizations, churches and trade unions.
They are often distinguished from the public and private sector by their social
commitment, closeness to local issues, innovation, ability to foster community
participation, and low labor costs. They are also important in serving as a catalyst to civil
society, giving voice to the needs and preferences of the poor who are generally under-
represented in the political system. NGO’s are not, however, a homogeneous group and
thus some perform better than others. Each has its own agenda and operates in a
different manner. Any efforts to expand the role of NGOs in delivering social services
will require strengthening their administration, targeting efficiency and overall
implementation capacity if poverty reduction programs are to be effective and sustainable.
63
Government social safety net programs
The traditional safety net
155. Given the relatively high incomes in the country in the aftermath of the oil boom,
the safety net in Trinidad and Tobago focused on assistance to the old, those with
disabilities and female-headed households with children. Thus, three programs have
provided the mainstay of the traditional safety net--the National Insurance System, Old
Age Pensions, and the Public Assistance program:
• National Insurance System (NIS) - a contributory system of national

insurance for employed persons that provides for retirement benefits and insurance in the
event of sickness, disability, maternity and employment injury. As a contributory
program, it is not specifically targeted towards the poor and does not receive transfers
from Central Government revenues except for employer contributions for civil servants.
• Old Age Pensions Program (OAP) - This is the largest safety net program
and is designed to complement the NIS with a non-contributory pension scheme targeted
towards the poor sections of the old population.
• Public Assistance Program (PA) - The PA provides cash assistance to
persons with disabilities and to female-headed households (with children) whose spouses
have deserted, are incarcerated or are hospitalized.
Safety nets and the new poor
156. Over the years, the issues facing the safety net have become more complex with
the emergence of a large group of the new poor. Many of the new poor subsist below the
poverty line, but would not be eligible for any significant assistance under the traditional
programs because of their demographic characteristics. For example, 65 percent of the
poor live in male-headed households. However, these households could not receive
assistance from any of the traditional safety net program, except limited unemployment
relief on public works programs. Nor does the National Insurance System (NIS) offer
any form of unemployment insurance, or extend coverage to the self-employed, though
one-third of the poor live in households where the head is unemployed and another 15
percent of the poor live in households where the head is self-employed. The needs of
the “new poor” are also different from the traditional recipients of the safety net
programs, who have typically received only cash assistance. Many of the new poor have
long-term links to the labor force and are only temporarily displaced from their traditional
work. While their immediate needs may be short-term subsistence, their real needs are
for rehabilitative assistance to help them reenter the labor force.
157. The Government has begun to respond to the growing needs of the “new poor” in
recent years with an expansion of existing public works programs and programs
addressed specifically to them. In view of the increasing levels of poverty, the
64
5 The social safety net
government’s first priority has been to put in place supplementary feeding and income
assistance programs:
• School Feeding Program82 - Provides nutrition assistance targeted to

children. The program reaches one-third of the primary school population and is presently
being extended to pre-primary and secondary schools.
• SHARE - Provides food baskets to about 6,500 needy individuals who
would not be eligible for assistance from other programs. The program is also designed to
include a rehabilitative component through referral to NGOs and other organizations.
• Unemployment Relief Program (URP) - Public works programs have
almost always existed in the country under different names and designs. The present
URP provides temporary employment on infrastructure and community-based projects
for two-to-four fortnights in a year for each participant.
158. Given the particularly high rates of youth unemployment and its implications for
crime and drug use, the government has also put in place job training programs targeting
the unemployed youth to enhance their career prospects and address the problems of
idleness and low morale:
• Youth Training and Employment Partnership - YTEPP is a part-time

program of four-to-nine months duration for provision of training, supervised work
experience and promotion of self-employment by strengthening networks of credit
institutions.
• National Apprenticeship Program - NAP provides apprenticeship
opportunities to youth to ease the transition to the job market.
• Civilian Conservation Corps - CCC provides group-based activities for
community improvement projects as well as discipline and morale building activities.
159. Finally, the government has also begun to provide retraining support to displaced
workers and to promote the development of micro-enterprises to assist their economic
rehabilitation. Many of these programs are still under preparation, but the two major
initiatives are:
• Retraining for Displaced Workers - Targets displaced workers and

provides up to three months of training geared toward self-employment in 55 potential
growth areas.
• Small Business Development Corporation - Provides credit, equity
capital and business support to small entrepreneurs.
160. In addition to the programs described here, there are several other, smaller
programs in operation and many others in the works. Some of these include free bus
passes, emergency cases grants, temporary assistance grants, child guidance clinics,
82
This program has been in existence since before independence, however, was restructured
significantly in 1989.
65
homes for the aged, day care centers for the aged, education grants, housing programs,
etc. Annex VIII provides a summary of the salient elements of the major safety net
programs and identifies key issues in program design.
Expenditures on safety net programs
161. Over the past decade, government allocations to transfers and subsidies to
households and NGOs has hovered around 4 percent of GDP. However, because of the
decline in GDP, the real value of these transfers has declined. In 1994, allocations were
3.7 percent. Of this, the core social safety net programs constituted TT$825 m. or about
2.9 percent of GDP.83
162. Of the expenditures on the social safety net programs, one-third of total
expenditures is spent on the non-contributory system of old age benefits. Another 10
percent is allocated for recipients of public assistance--persons with disabilities and female
headed households. Approximately one quarter of the transfers and subsidies go toward
long existing social programs, such as homes for the aged, subsidies to clinics, hospitals
and schools etc., many of which should rightfully be reclassified as education or health
expenditures. And finally, only one-third of the total social safety net expenditures is
directly targeted to meet the short-term subsistence and retraining needs of the displaced
poor.
Constraints affecting the impact and efficiency of programs
163. ABSENCE OF AN OVERALL POLICY FRAMEWORK AND LEAD AGENCY. A critical

issue facing the safety net system is the absence of an overall policy framework
(developed by a lead agency) to provide strategic direction and to prioritize and rationalize
its various components. Eight different ministries deliver a multitude of programs, but
there is no one effective agency to lead and coordinate the initiatives of the different
ministries within an overall policy framework.84 The absence of a policy framework
during a period of significant change in the extent and characteristics of poverty has
meant that the safety net system has responded only slowly to the current circumstances.
In particular, the safety net has been slow to address the needs of groups displaced in the
past decade. It is only in the last two years to three years that programs, such as School
Feeding and SHARE have become operational on a significant scale. These issues are
currently being discussed by an interministerial committee, which has recently been
formed.85
83
Ministry of Finance estimates for 1994. A line item for severance benefits was eliminated from the
MOF estimates. This does not include expenditures on the contributory NIB which is not funded through
the government budget.
84
Ministry of Social Development, Ministry of Community Development, Culture and Women’s
Affairs, Ministry of Education, Ministry of Works, Ministry of Sport and Youth Affairs, Ministry of
National Security and the Ministry of Housing and Settlements
85
The interministerial committee includes the above ministries, as well as Ministry of Planning and
Development and the Ministry of Health.
66
164. GAPS: SLOW IMPLEMENTATION OF ECONOMIC PROGRAMS. Though the

government has begun to address the needs of the displaced poor, most of the operational
program still provide largely subsistence assistance--for example URP, School Feeding
and SHARE. Programs with a stronger economic focus on training and sustainable
employment generation have been even slower to become operational. For example,
only 1,500 workers have benefited from an existing program for the Retraining of
Displaced Workers. While the Government has plans to provide support for the
development of micro-enterprises through the Small Business Development Corporation
(SBDC), support through this agency is not yet operational. The government is also
planning to foster a community-based investment fund approach for infrastructure
rehabilitation and employment generation but these efforts are also just beginning to get
off the ground.
165. GAPS: ABSENCE OF REHABILITATION ASSISTANCE. The traditional safety net, in

particular the Public Assistance program also needs to be re-evaluated to correct its
present bias toward ameliorative assistance. The present system does not provide any
incentive or assistance for recipients to leave the welfare system. For example, cash
transfers to persons with disabilities and female-headed households can be obtained
indefinitely. Disabilities are often vaguely defined, such as “anxiety”, the seriousness or
persistence of which cannot be easily proven or disproven. Nor does the system offer
social counseling or assistance for economic rehabilitation of these recipients. Though
some social counseling is provided through other programs run by the Ministry of Social
Services, the services of the two departments are not coordinated and do not mesh into an
integrated long-term rehabilitation strategy. It should be noted that in the past months, a
small-scale pilot project has been initiated to explore rehabilitative options and four
persons have graduated from public assistance. The lessons of these pilots need to be
incorporated in restructuring program design with changes in the nature of the services
provided and incentives built into the program.
166. DUPLICATIONS. In the absence of a policy framework, administrative fragmentation

of the social safety net system has also led to many duplications in service delivery as
ministries develop their own programs. In particular, the YTEPP and NAP have similar
goals of providing on the job training and assisting placement in the job market, though
they are run largely in isolation from each other with each agency under different
ministries. Another significant duplication comes from the existence of two ministries
with similar mandates--the Ministry of Social Development and the Ministry of
Community Development. The Ministry of Community Development, for example, is
developing a small program to provide meals and counseling support through
Community Relief Centers, which is similar to the SHARE program administered by the
Ministry of Social Development. Some of the economic rehabilitation programs
presently under preparation through the Ministry of Community Development, such as
Export Centers, Terminal Malls or Employment of Women Through Cooperatives aim to
provide business development services that are also going to be provided by the SBDC.
While the target audience of these programs are different requiring some differences in
67
approach, they could usefully be brought under an umbrella, to learn from the experience
of other programs while sharing scarce technical training resources. These duplicative
programs lead to increased administrative costs and knowledgeable recipients often
benefit from several different programs run by different ministries. Administrative
fragmentation also implies that recipients spend an excessive amount of time going to
different agencies.
167. TARGETING. Targeting mechanisms in most social safety net programs are largely
informal, with few objective criteria defining eligibility. In most programs, guidance
about the definition of the target group is weak, with it typically defined as “needy
recipients.” The choice of beneficiaries is left to the delivering agency in most programs -
school administrators for the School Feeding Program, local community leaders for the
URP and the implementing NGOs in the SHARE program. While there is no indication
of widespread leakages of program benefits to non-target populations, there is little
systematic information on the efficiency of such informal systems of targeting.
Implementing agencies admit that in the absence of clear policy guidelines on the target
population, they find themselves unable to deny benefits to any person requesting
assistance, leading to uncontrolled expansion of program coverage. Ensuring greater
targeting efficiency would require greater policy clarity about the target population to be
reached and an enhanced level of monitoring to ensure compliance. Most delivery
agencies do provide lists of beneficiaries to the supervising ministries, but actual
monitoring of compliance with guidelines is virtually non-existent due to limited human
resources at the ministerial levels and the absence of computerization of many program
administration units.
Source: World Bank Mission, 1994

Box 5.1: Duplications and disincentives in the social safety net: a case in point
One 40-year-old woman in St. George county has been on Public Assistance for the last 12 years after
having been medically diagnosed as suffering from “stress” by her doctor. She has five children and
her husband is no longer living with them. Ms. “Smith” and her family receive from the Ministry of
Social Development a monthly check of TT$630 under public assistance and the food subsidy
programs. She lives in a three-bedroom apartment subsidized by the Ministry of Housing and therefore
only pays TT$100 in rent. In addition, she receives a clothing grant of TT$400 every two years from
the Ministry of Social Development, and obtained a one time furniture grant of TT$1500 through the
Urgent Temporary Assistance Program. The children receive a hot lunch daily through the School
Feeding Program, as well as free bus passes for unlimited use on public transport from the Ministry of
Education. Ms. Smith also receives a food basket through the SHARE program, which is valued at
TT$150 on a monthly basis (for up to 6 months). These benefits are distributed through several
separate agencies, which each have their own administrative structure and no coordinating system. The
total annual value of the benefits is at least TT$14,000 (excluding the value of the housing), well over
the amount Ms. Smith would receive if she worked as a domestic helper at the minimum wage
(equivalent to TT$7800 per year). These public benefits therefore provide little incentive for her to
return to the labor force.
168. Additionally, there have been indications that the choice of recipients in some
programs has sometimes been subject to partisanship and motivated by affiliations and
interests of the delivering agencies, which are often outside the formal government
68
structure. These issues of equity in access will become particularly important as the
government is considering increasing the involvement of NGOs in the service delivery of
its social safety net programs. Both the duplication of services and lack of equity in
access underscore the importance of the explicitness of eligibility criteria and effective
monitoring systems.
169. ADMINISTRATIVE EFFICIENCY. Another consequence of the lack of adequate

follow-up systems has been that once a program is in place, there is virtually no
monitoring of program efficiency and effectiveness. There are indications that this may
be leading to inefficiencies and high administrative costs in some programs that are
otherwise well conceived. For example, in the SHARE program, some food baskets
include several high value imported items and given the decentralized implementation of
the program, clarity of policy goals and additional monitoring would be desirable to
ensure maximum effectiveness from limited resources.
170. RESTRUCTURING OF THE OLD AGE SOCIAL SECURITY SYSTEM. One of the most
urgent issues in the social security system is the imbalance between the contributory and
the non-contributory systems of retirement incomes and the inefficient targeting of the
OAP, which consumes one third of the total social security expenditures targeted to the
poor. Over the years, the non-contributory, means tested Old Age Pension Scheme has
lost its targeting edge and has expanded to cover 80% of the population over 65 years of
age. Though the OAP is confined to those who earn less than TT$5,000 annually, this
does not apply to household incomes and there are many instances of members of very
wealthy households enjoying OAP benefits.
171. By contrast, the relative importance of the contributory pension system provided
by the NIS is much lower as it covers only half the pensioners covered by OAP. In
addition, the real value of benefits provided has eroded over time and even the highest
pension available is only 1.68 times the individual poverty line irrespective of the income
earned at the time of the last pay-in. Moreover, the highest pension available under the
NIS is lower than the non-contributory pension provided by the OAP. The last actuarial
review of the NIB questioned its continuing relevance given the low level of benefits
presently provided 86 and cautioned about financial sustainability of the Board if the level
of contributions to the NIS were not increased immediately. Deficiencies in the legal and
institutional framework governing the NIB have constrained its management effectiveness
and contributed to the present problem. The imbalance that has emerged between the
contributory and the non-contributory system of social security needs to be corrected
urgently given the projected doubling of the population in the over 65 age group in the
coming decade will overwhelm the budget. If Trinidad and Tobago is to maintain a viable
system of old age social security, the contributory social security system needs to be
restructured and strengthened, while the non-contributory system needs to be targeted
more efficiently.
86
The highest pensions provided constitute only 21 percent of average earnings.
69
Table 5.1: Major safety net programs

Target Group Major Programs, Number of Annual Comments on coverage, overlaps
Beneficiaries and Benefit Budget and gaps.
Levels
Public Assistance TT$54 m. • Assistance is largely cash transfers
25,000 households with virtual absence of counseling
Cash benefits - Annually and rehabilitative services.
TT$1,200 per adult, TT$936 • Though level of benefits not high in
FEMALE-HEADED per child up to a maximum of PA per se, combined with other
HOUSEHOLDS TT$3,360 per family. benefits such as food subsidy,
WITH CHILDREN subsidized housing, bus passes etc.
AND PERSONS it provides disincentive for
WITH DISABILITIES rehabilitation.
• Benefits under the PA can be
indefinite.
Food Subsidy TT$27m.87 • Food subsidy duplicates public
25,000 households assistance and OAP benefits.
TT$ 841 per person annually
Emergency Assistance TT$0.25m.88
125 households
One time grant TT$50-2,000
Export Ctr & Term. Malls TT$3 m. • Very small program. Business
300 households training duplicative of programs
Business Training being developed through the
SBDC..
Employment of Women TT$0.11m. • Under preparation. Business
Thru Cooperatives training may be duplicative of
700 households SBDC initiatives.
Business training for women
in co-ops.
Old Age Pensions (non- TT$211 m. • OAP has lost targeting edge,
contributory) becoming a broad based
61,000 individuals (80% of entitlements program rather than a
OLDER population group) well targeted safety net.
POPULATION TT$3432 annually • Duplication between OAP and NIS
GROUPS due to program design features.
National Insurance System Contributory • Benefit levels of the contributory
32,000 individuals through the NIS are outdated. Even recipients
TT$1560-TT$4056 budget with the highest pension are eligible
(80% receive the maximum for the non-contributory OAP.
pension) Significant reforms needed in the
old age security system..
Food Subsidy TT$62.5 m. • Duplicative of OAP benefits.
61,000 (all recipients of
OAP)
TT$841 annually
87
Total food subsidy allocation is TT$89.5 but two-thirds of it is given to recipients of OAP.
88
Total allocation for temporary assistance in 1993 was 500,000, which is divided between recipients
and non-recipients of PA. Here, about 50% is assumed to be given to recipients of PA.
70
Target Group Major Programs, Number of Annual Comments on coverage, overlaps

Beneficiaries and Benefit Budget and gaps.
Levels
YTEPP TT$25 m. • Significant duplication between the
UNEMPLOYED 10,000 youths goals and target population of
YOUTH Training, work experience, YTEPP and NAP.
skills for self employment
National Apprenticeship TT$10 m.
11,000 individuals
Apprenticeship training, small
stipend
Civilian Conservation TT$10 m. • Relatively new and small program.
Corps)
GENDER NEUTRAL School Feeding Program TT$79m. • Targets children in needy families.
PROGRAMS FOR 73,000 children • Need to review targeting and cost
HOUSEHOLDS Lunch with 1/3 of nutritional efficiency of program delivery.
WITH LOW requirements on school days
INCOMES
SHARE TT$3.5 m. • Limited in scope. Under expansion.
6,300 individuals • Targeting criteria and cost
(a) Feeding Food basket to provide efficiency need to be monitored.
Programs and minimum nutritional • Rehabilitation component through
Income Assistance requirements. Rehabilitation referral is limited.
components
Unemployment Relief Prog. TT$130m. • Provided short term employment
7,750 temporary jobs per (1-2 months) to one half of the
fortnight. Reached 58,572 unemployed households last year.
households. • Wage component of total costs is
TT$310 per week small--one-third of total costs.
(employment of 4-8 weeks)
Community Relief Centers TT$2.5 m. • Community-based approach, but
No. of Beneficiaries n.a. objective duplicative of SHARE.
Meals, emotional support • Under preparation.
Urgent Temporary Asst. TT$0.25 m.
125 households
One time grant TT$50-2,000
Retraining of Displaced TT$3 m. • Limited coverage. Presently under
(b) Retraining Workers expansion.
and Economic 4,500 workers
Rehabilitation Training in 56 identified
growth areas.
Small Business • Not yet operational.
Development (in process)
Credit and business
development services
71
Recommendations
172. It has been widely recognized that a reform of the social safety net is needed.
Several general policy recommendations are discussed, with program-specific issues
mentioned in Annex VIII.
Identify a lead agency and overall policy framework. The overall effectiveness
of the social safety net can be strengthened considerably with the designation of a lead
agency to develop an overall policy framework to continually prioritize and rationalize
programs in response to changing social needs and within an overall poverty alleviation
strategy. This will require a clarification of the policy objectives and target populations of
the various programs. In particular, it is important to clarify the focused and temporary
nature of new programs to assist the new poor to ensure that these new programs do not
turn into entitlements. The School Feeding program and the SHARE programs are cases
in point. Both programs are well conceived and appropriate at this time, but their rapid
expansion without appropriate attention to targeting and policy objectives could make
them vulnerable to becoming large, long-term drains on the public budget. The
interministerial committee may be able to identify key issues, though this does not ensure
implementation of recommendations.
• Rationalize programs. A policy framework and clarification of policy

objectives should also be used to rationalize the large number of existing programs, many
of which are duplicative and some are too small to be administratively efficient. Because
of the lack an overall lead agency, many initiatives are presently underway to develop new
programs, many of which will exacerbate existing duplications.
• Rationalize administrative structure. The current fragmentation of

administration affects the efficiency of the system. In particular, the Ministries of Social
Development and Community Development are duplicating efforts in program design
and implementation. Administrative fragmentation is also hindering the system from
providing a coordinated set of services to its clients. A more integrated, client focused
approach must be considered to provide the recipients with a full range of social services.
In particular, this should include linking the social welfare programs with the health and
education programs run through the respective ministries.
• Expand rehabilitative assistance. A system with an integrated range of

services should also move away from the current culture of amelioration through grant
transfers to a greater emphasis on rehabilitation, both for the Public Assistance program
as well as for the programs that are being introduced for the displaced poor. This will
require institutional strengthening as the staff are currently overloaded and have limited
training in this area.
• Review the old age security system. There is a need to urgently address
the fundamental structural imbalance that has emerged between the contributory and the
72
non-contributory systems of old age pensions. The contributory system operated through
the NIB needs a significant review and overhaul to restore its relevance and financial
sustainability, while the non-contributory systems of Old Age Pensions needs to be
targeted more effectively. Unless these are addressed, it will not be feasible to free up
mistargeted resources from the OAP.
• Improve monitoring capacity. Greater efforts are also needed to improve

the monitoring of existing programs to ensure targeting and administrative efficiency. In
particular, this requires improvements in management information systems and
monitoring capacity. Effective capacity to ensure compliance with targeting criteria and
equity in access is particularly important as the Government is planning to use NGOs
increasingly in the delivery of social services.
• Institutionalize periodic evaluation. Periodic evaluation of program

design and effectiveness also needs to become an institutionalized feature. Program
designs need to be reviewed periodically to ensure their continued relevance, the
appropriateness of the target group identified, the utilization of the least-cost approach
and effectiveness in reaching their policy objectives. Given their size, program
evaluations of the OAP, public assistance and the URP would be particularly appropriate
at this time.
Non-governmental organizations
The role of NGOs in poverty reduction
173. NGOs in Trinidad and Tobago involved in poverty reduction have two basic
functions: development and advocacy. In the development area they are primarily
involved in the delivery of various social and welfare services to the poor, the provision of
human resource development and skills training, and income and employment-generating
projects. In the area of advocacy, only a few NGOs have been involved, particularly
women’s groups who have been able to focus some governmental attention on
addressing gender issues and bringing these issues to the fore in public debate.
174. The rationale for greater NGO involvement in poverty reduction programs in
Trinidad and Tobago is their perceived ability to outperform government and deliver
services that are more cost effective. NGOs have been encouraged in their activities by
donors and government because there seems to be a growing awareness that NGOs are
often more integrated with the community and projects are more likely to succeed if there
is the active participation at that level. There are now 37 NGOs affiliated with the Ministry
of Social Development, providing services ranging from residential care for
abandoned/abused children, to day care for children and the elderly, vocational training
for the disabled and drug rehabilitation. Two national NGOs deliver services for the
Ministry of Community Development.
73
The operating environment
175. The decline in government expenditure on social service programs has led to a rise
in the role of NGOs in the delivery of social services to the poor. However, NGOs are
dependent on the government for financial and administrative assistance, restricting their
independence and effectiveness. The legal framework under which they operate is vague,
which results in accountability problems. In addition, there is a lack of a well-established
agency, such as a national umbrella NGO to play a coordinating role. This reduces the
overall effectiveness of NGOs, makes monitoring more difficult, and results in some
duplication of services. Only the large organizations have been able to establish some
coordination between themselves, though it still remains informal.
176. In terms of the relationship of NGOs to the state, NGOs are viewed as
organizations with capabilities to be tapped when urgent social problems have to be
addressed. On the other hand, the NGOs have no leverage because they are generally in
need of funding and readily accept state sponsorship. The government monitors the
performance of these organizations for accountability purposes.
177. The private sector does not have a well-defined relationship with the NGO
community, particularly in terms of social service delivery. Sponsorship or partial
funding by the private sector for high demand community projects and social programs,
such as the building and operation of day care centers, is scarce. However, the
relationship between the two in terms of human resource development is more
productive. For example, SERVOL, the largest NGO in the country, has three training
programs that place graduates in apprenticeship programs in the private sector. Although
SERVOL receives most of its funds from government grants, private sector donations
have been substantial.
178. The relationship between external donor and NGO communities is much better
defined and more productive. Some NGOs, such as the Caribbean Network for
Integrated Rural Development, receive direct funding from foreign donors (e.g. the UN)
while other NGOs benefit from foreign donor assistance indirectly through the
government. Those NGOs receiving direct foreign donor assistance have the advantage of
being independent of the government and have mechanisms in place to assure
accountability for their projects. There is a view held by some in the donor and NGO
communities that donor funding is better spent if given directly to NGOs than through
government, as NGOs have been able to continue to operate in areas where government
services have broken down (e.g., remedial education classes) and that NGOs generally
tend to outperform the government in areas where both of them deliver similar services.
Assessing and monitoring NGO performance in poverty reduction
179. Measuring the effectiveness and efficiency of NGO performance in reducing

poverty in Trinidad and Tobago is limited by the absence of comprehensive and reliable
data. The overall level of government monitoring is minimal and the effectiveness and
74
efficiency of running most programs have not yet been evaluated. No ex-post evaluation
of any NGO poverty alleviation program has been taken as of yet, there is no follow-up
on the status of beneficiaries, nor is there extensive information on the cost of many
programs. Despite the absence of such information, the government has continued to
support these programs.
180. NGOs face many constraints that affect their performance and ability to deliver
services in an efficient and effective manner. Firstly, they generally have an insufficient
number of qualified, permanent staff with basic skills such as accounting and
procurement. Secondly, they operate in the absence of a clear legal and regulatory
framework and as such have no monitoring or evaluation mechanisms in place. Thirdly,
NGOs operate with substantial financial constraints. To a large extent, NGOs lack the
capacity to access donor funding, a result again of their own managerial weaknesses as
well as the absence of coordination among themselves. Additionally, the NGOs heavy
reliance on government subjects them to political interference and pressure and other
bureaucratic obstacles. Finally, NGOs, especially those working on government financed
projects, tend to be brought in at the implementation rather than design stage, which
ultimately has an affect on their level of effectiveness.
Recommendations
181. Though further evaluation of NGOs will require adequate data, the available
information indicates that while they have an important role to play, their overall
effectiveness as providers of services is limited, with the exception of a few of the larger
organizations. There seems to be much inefficiency in administration and program
delivery as well as targeting accuracy. Furthermore, the goals and priorities of NGOs tend
to differ from those of both the governments and other external donors, which sometimes
may lead to mistrust and may hinder cooperation between the various agencies.
182. Even if these NGOs were to develop closer ties with the external donors, it is
doubtful that they would have the capacity to absorb greatly increased funding, or, if they
developed a better defined relationship with government, they would be able to
realistically fill in gaps left by the decline in government provided social services. There
are however, a few recommendations that could increase the effectiveness and efficiency
of NGOs and improve their capacity to further implement poverty reduction programs.
183. Promote a networking mechanism among NGOs. Such a mechanism could

serve to coordinate NGO activity in the country. More specifically, it could focus on: (i)
creating a data base of all NGOs and establish an NGO information system; (ii) preparing
an action plan to influence government policy; (iii) establishing an NGO code of conduct;
(iv) creating NGO coordination mechanisms; and (v) identifying external and local
sources of funding. In addition, the organization could coordinate and provide training
programs to enhance the implementation capacity of NGOs.
75
184. Strengthen the capacity of NGOs. The most evident weaknesses lie in the area of
management, administration, and organization. This could be strengthened by developing
and funding training programs for NGO staff, and encouraging both international and
large NGOs to assist in the capacity building process with smaller organizations. This
should be coordinated with the government reform of safety net programs to ensure that
the skills are suited to changes in program delivery.
185. Establish an accreditation process for NGOs. As the government seeks to

contract out more services to NGOs, some form of certification for organizations should
be established to ensure the legitimacy and implementation capacity of organizations.
Specific criteria could be determined which would then accredit organizations. To
maintain this accreditation, some periodic monitoring and evaluation tools should be
designed which would ensure accountability through a formal reporting system.
Box 5.2: The role of community participation in poverty reduction

There is now wide recognition that an important element in the success of many poverty reduction
efforts is community participation. Community participation is generally defined as an active process
whereby beneficiaries influence the direction and execution of development projects rather than merely
receive a share of project benefits. The objectives of community participation are empowerment, building
beneficiary capacity, increasing project effectiveness, improving project efficiency and project cost sharing.
A 1985 World Bank Study, for example, found that participation by grass-roots institutions and
beneficiaries had a significant bearing on the sustainability of successful development projects. Two years
later, a study of 42 World Bank financed irrigation projects concluded that economic returns were
consistently higher for projects involving farmers in planning and management of irrigation systems. A
USAID study of 52 projects further found a positive correlation between participation and project success.
Participation has other benefits as well. It tends to build commitment, leading to greater
sustainability. In areas requiring changes in individual and household behavior, information, feedback,
consultation and the active promotion of solidarity or support groups tend to lead to increased demand,
greater adoption of new practices, and better utilization of services.
Governments have and can help communities to participate in development and reducing poverty.
Among the steps governments can take to increase participation are:
• encouraging an appropriate decentralization of authority to local levels of administration and elected

authorities;
• undertaking and facilitating opportunities for local government administrators to interact with
stakeholders.
Where social and political factors limit community participation, central governments can:
• start projects where local government officials have shown their support for participatory approaches;
• build on existing programs of governmental or non-governmental organizations;
• support persons within the government undertaking participatory approaches;
• assess local organizations and designing appropriate capacity-building programs where needed.
76
Sources: Bamburger, M. 1987, Community Participation Experience in Urban Development Programs and in
Agriculture and Rural Development, Washington, D.C. EDI, World Bank; Dudley, E. 1993, The Critical Villager,
London, Routledge; Bhatnager, B. and Williams, A. 1992. Participatory Development and The World Bank: Potential
Directions for Change, Washington, D.C.: World Bank.; and The World Bank, 1994, “The World Bank and
Participation,” Washington, D.C.
77
ANNEXES
Annex I
Measuring living standards
Data
The primary source of information used to construct the poverty profile and to
analyze the characteristics of the Labor Force is the Survey of Living Conditions (SLC).
This household survey was conducted on a national basis by the Central Statistical Office
in May and June of 1992. Information was obtained on household composition,
employment, income, expenditure, education, and health from approximately 1,450
households. The sample design, a two-stage stratified random selection of households,
was based on the Continuous Sample Survey of Population of the Central Statistical
Office. The original sample included 1,689 households, though data on 202 households
were found to be unusable during the enumeration stage and therefore not included in
data processing activities. Another 34 households were excluded because data on
expenditures were found to be either incomplete or inconsistent. The reduction in the
sample does not significantly affect the representation of the population at the national
level. A comparison with data from the census of 1990 suggests that the geographical
distribution of the sample is similar as are some characteristics of households. However,
as with any survey, the possibility of sampling and non-sampling errors remain.
Welfare measures
Welfare is measured using per capita household consumption. We use

consumption, rather than income, in calculating living standards for three reasons. First, it
is difficult to measure the income of those working in the informal sector, self-employed
workers, and those who receive in-kind payments, such as food or housing. Second,
survey respondents regard questions about consumption as less sensitive than questions
about income and thus answers are likely to be more accurate. Finally, consumption is
considered to more accurately represent long-term living standards because income may
fluctuate over short periods.
Household consumption is calculated by summing the value of total household

expenditures on various foods, and non-food goods, such as schooling, medicine,
clothing, transportation, housing, etc. Expenditures on food are available in section eight
of the SLC. A household member identified as "the most informed adult" was asked
about expenditures on 43 food items in the seven days preceding the interview date, as
well as the four weeks preceding the date. Households were asked about the value of gifts
received in the 4-week period (preceding the interview date) and the cost of purchasing
food obtained from "home production" (food crops/items cultivated by the household).
The 4-week responses are inflated to 52-week values to arrive at annual household
73
expenditures. To these expenditures the annual value of meals eaten outside the home--
purchased and obtained in the form of gifts--was added. The sum of these 44 food
categories provides a measure of the annual (total) food consumption of a household.
Note that this does not include the value of school lunches consumed by children
currently in school.
Information on non-food expenditures is collected in sections six, seven, and

eight. These include household expenditures on clothing, health, transport, schooling,
house repair, rent and utilities, recreation, taxes, insurance, consumer durables, etc. The
guiding principle used to include or exclude an expenditure item is its contribution to
household welfare. Expenditures on taxes, insurance, and some financial transactions are
not included in household expenditure calculations because they do not directly
contribute to economic welfare; earlier calculations of household expenditures included
these items.
Housing value is included by taking rental information for those who rent their
dwellings, or by using the imputed rent, which could be the information on a mortgage if
it is available or on minimum acceptable rent for those who live in dwellings they own.
Since there is little spatial variation in prices in Trinidad and Tobago and since the survey
period covered only two months of the year, these data can also be expected to provide a
fair representation of real consumption levels that are comparable across different parts of
Trinidad and Tobago.
Expenditures on consumer durables, such as household appliances, furniture, and

vehicles are not included because these provide a flow of services over a period of time.
If information was available on the value of all consumer durables owned by a household
and when they were acquired, we could derive a measure of "use-value" that could then
be used to represent the value of services obtained from consumer durables. But the
survey only provides information on consumer durables purchased in the 12 months
preceding the interview date. Households are asked whether they possess various types
of consumer durables but no information is available on the number and value of these
items. For this reason, we exclude all consumer durables from our household
expenditure calculations. This is likely to introduce a substantial downward bias to the
expenditure measure, the extent of which can be gauged from Table 9 which shows the
percentage of households in different expenditure quintiles who own various consumer
durables.
Expenditures on house repair are not included because, in the case of owner-
occupied dwellings, they are likely to be reflected in the "reservation rent"--the minimum
rent that households would be willing to accept for renting out their home. In the case of
renters, they are negligible and likely to be adjusted in the rent paid to the landlord.1 The
1
The non-food items not included in household expenditures, with their codes, are as follows: (101)
Life Insrance , (102) Fire Insurance, (103) Automobile Insurance, (104) Repayment of Loans, (105) Legal
Services, (106) Income Tax, (107) Other Taxes (excluding VAT), (108) Credit Union Shares, (109) Other
(continue à)
74
Annex I Measuring living standards
rental information included is, therefore, equal to the actual rent, for those who rent their
dwellings and pay rent, and a "minimum" acceptable (reported) rent for those who own
the dwelling.
Information on insurance or tax payments are not included because they do not
represent consumption expenditures. For the same reason, we also do not include other
financial transactions involving legal services, credit shares, etc.
Since there is little spatial variation in prices in Trinidad and Tobago, no

geographic price indices were used. Annual household expenditures calculated in this
way are then divided by the number of persons in a household to arrive at per-capita
expenditures (annual). It should be remembered that this measure of individual economic
welfare is an underestimate in that expenditure calculations do not include consumer
durables, which might have a budget share as high as 10 percent to 15 percent.
All persons in the sampled households are ranked, from poorest to richest,
according to their household's per-capita expenditures. Deciles and quintiles are then
used to present distributions of the living standards. Decile one represents the poorest 10
percent of (per-capita) expenditure, while decile 10 represents the richest 10 percent.
Quintile one refers to the poorest 20 percent of the population, while quintile five consists
of the richest 20 percent. The mean of each group represents the average level of living
standards of that group.
The use of per-capita expenditures to measure welfare levels understates the

economic well being of households with more children, since this measure does not take
into account economies of scale and differences in consumption patterns of children and
adults. In Table 2 we also present summary statistics for per-adult equivalent
expenditures. This measure uses previously calculated equivalence scales to adjust
household expenditures for their age and gender composition, instead of simply counting
the number of persons in the household. The distribution for per-adult equivalent
expenditures is similar to that for per-capita expenditures, and only the ranking of the
poorest two counties Nariva/Mayaro and St. Patrick is switched when using per-adult
equivalent expenditures.
Financial, (201) Transport-Own Vehicles, (202) Furniture and Furnishing, (203) Repairs to house, (204)
Household Appliances, (307) Kitchen Utensils & Cutlery, (Q89) Dwelling Taxes.
Note that in the earlier calculation of per-capita expenditures, the expenditures 101-109 were included
in the 2nd and 3rd measures but not the first one. Consumer durables such as household appliances, kitchen
utensils, and furniture were included in the 1st measure as was own-transport vehicles. House repairs were
included only in the 3rd measure. On the other hand, the earlier calculations missed what was termed in the
program “House & house-related expenses,” which included telephone, household supplies etc. The new
measure is therefore quite different from the second measure used to obtain quintiles.
75
In this report we shall use per-capita expenditures to measure poverty because

much research on the use of equivalence scales suggests that, for the purposes of poverty
measurement, using per-capita expenditures, instead of equivalence scale based measures,
has little effect on the ranking of households, and the distribution of poverty. Further,
poverty lines, typically, are defined in terms of expenditure levels for the average person,
and take into account the age composition of the population.2 It is, therefore, important
to be consistent in the choice of measures of economic well-being and poverty lines.
2
The nutritional requirement on which the food component of a poverty line is based, is usually, related
to the needs of an average person in the study population.
76
Annex II
FGT poverty measures3
The Headcount index, Poverty Gap and FGT P2 measure belong to a class of
poverty measures proposed by Foster, Greer and Thorbecke4 (FGT). The FGT measures
are derived by the following formula:
1 q
[ z − y ]
P n
=
n
∑ (
z
1
)α
i = 1
where q = the number of poor individuals

n = the size of the entire population
z = the poverty line
yi = the income of poor person i
a = a non-negative parameter which reflects the weight given to
the degree of poverty of the individual
As a increases, the weight given to the poorest person in the population when
calculating the poverty measure also increases. Three values of a were used;
a=0 Headcount measure

a=1 Poverty Gap
a=2 FGT P2 Measure
The Headcount measure is the proportion of the population whose income is

below the poverty line. The Poverty Gap is used to measure the depth of poverty for the
population as a whole; it represents the amount necessary to raise the income of all poor
individuals to the level of the poverty line, as a proportion of the poverty line. In other
words, it is the aggregate poverty deficit relative to the poverty line. The FGT P2 measure
is distributionally sensitive in that it is able to give weight to those who are very poor
relative to the "mildly poor." Each individual is weighted by their degree of poverty,
representing the aggregate of the square of each poor individual's poverty gap, as a
proportion of the entire population size. Though it is difficult to interpret the P2 measure
in an intuitive sense, it is useful for making comparisons across groups.
3
This annex extracts material from the World Bank (1993). “Poverty and Income Distribution in Latin
America, The Story of the 1980s.”
4
See James Foster, J. Greer and E. Thorbecke, “A Class of Decomposable Poverty Measures,”
Econometrica 56(1984):173-177.
77
The FGT measures are very useful for poverty analysis due to several reasons.
First, this class of measures is decomposable-the population can be broken down into
mutually exclusive subgroups for analysis. This is useful for making poverty profiles of
specific groups within the population and then comparing this profile to that of the
population as a whole. Second, for values of a=1 or higher, the FGT class of measures
satisfies the monotonicity axiom and transfer axiom as defined by Sen 5. The
monotonicity axiom states that, all other things being equal, the poverty measure must
increase (or decrease) if the income of a poor family is reduced (or increased). The
transfer axiom states that, all other things being equal, the poverty measure must increase
(decrease) with any transfer of income from a poor household to a non-poor household.
Finally, for values of a=2 or higher, the FGT measures satisfies the transfer sensitivity
axiom as proposed by Kakwani6 which states that, for transfers from a richer person to a
poorer person within the poor population, the magnitude of the decrease in poverty must
be greater for larger transfers. This is because individuals closer to the bottom of the
income distribution of the poor population are weighted more heavily in the poverty
measure when a=2 or higher.
5
See Amartya Sen, “Poverty: an Ordinal Approach to Measurement.” Econometrica 44(1976): 437-
446.
6
See Nanak Kakwani, “On a Class of Poverty Measures.” Econometrica 48(1980):437-446.
78
Annex III
Basic food basket for a 2,400 kcal
nutritionally balanced food basket,
May 1992
FOOD GROUP QUANTITY (g)
Staples
Cereals 213
Counter flour
Rice
Bread
Starchy Fruits, Roots and Tubers
Irish potatoes 405
Green bananas
Cassava 64
Brown sugar
Legumes
Split peas 84
Lentils
Vegetables
Cucumber 248
Christophine
Pumpkin
Bodi
Fruits
Grapefruit 268
Bananas
Papaw
Food from Animals
Powdered milk
Codfish 152
Chicken
Salmon
Cheese
Pig trotters
Kingfish
Smoked Herring
Fats and Oils
Cooking oil 42
Margarine
Average Cost: TT$4.90
79
Annex IV
Comments on the labor force statistics
collected by the central statistical office
UNEMPLOYMENT. The interpretation of the published unemployment rates

collected by the CSO requires some caution as it is different than measures in some other
countries. Included in the definition of the unemployed: are those actively seeking a job
during the reference period; those who in response to the question, "Did you look for
work?" volunteered that they did not do so for any one of the following reasons: (i) they
were discouraged from seeking work; (ii) they were awaiting results of a previous
application for employment; (iii) they were temporarily ill and could not look for work in
that week; or they wanted a job but did not know where to find a suitable job; and those
that did not actively seek work during the reference period but who had looked for a job
at some time during the three months prior to the survey and who were still available for
employment. Over the past three years, this group has constituted approximately 30
percent of the total unemployed. The most commonly given reason for not actively
searching for work, offered by between two-thirds and three-fourths of the inactive
unemployed, is a lack of knowledge of any job vacancies. These would thus appear to
qualify as "discouraged unemployed."
It is often difficult to determine the true labor force status of those who have not
actively sought employment but are included in the category of the discouraged
unemployed. It is not always possible to determine the seriousness of the desire for
employment, particularly when long periods have elapsed since the most recent
employment. In the case of Trinidad and Tobago, it would seem that most of those
classified as inactive unemployed have had recent employment. In 1993, over 58 percent
had held a job during the preceding 12 months, and another 24 percent had held a job at
some time prior to that. Only 17 percent apparently had never held employment. The
high incidence of previous and recent work experience suggests that the bulk of those in
this category may legitimately qualify as unemployed. The restriction of the definition of
the unemployed to only those who actively sought work during the preceding week
would markedly reduce the rate, from 19.8 to 13.8 percent in 1993 and from 19.7 to 13.5
percent during the first quarter of 1994. If this measure is compared with the comparable
and conventional measure of unemployment for 1993, cited above, it would appear that
recent rates of open unemployment are actually lower than they were in that earlier year.
DURATION OF UNEMPLOYMENT. In view of the high rate of unemployment, one

might expect to find chronic or long-term unemployment to afflict most job searchers. It
thus comes as something of a surprise to find that the duration of unemployment for
most workers has been relatively short. The survey does not provide a precise measure of
81
the duration of unemployment. Rather than determining the interval since an individual
began to seek work, the survey only establishes the interval since the individual last
worked. Since the latter may be longer than the period of active job search, the data will
tend to overstate the duration of actual unemployment. This approach also has the
weakness of not capturing the duration of unemployment of new entrants to the labor
force since they have held no previous employment.
In short, these durations only represent the upper limit to the length of real
unemployment. To the extent that they include periods of voluntary idleness, they
overstate the duration of unemployment. To more accurately capture the duration of
unemployment, the Central Statistical Office could ask the active job seekers how long
they had been actually seeking work and the inactive unemployed how long they had
actually been available for employment. The addition of such a question would also
permit the determination of the duration of unemployment of new entrants to the labor
force--those seeking their first ever employment. These data would seem to indicate that
long-term unemployment is not the dominant characteristic of the jobless. Rather they
suggest that workers alternate between periods of employment and unemployment.
LABOR FORCE PARTICIPATION. In interpreting labor force participation, it should

be noted that some of those reported as being non-participants in the labor force actually
did participate, though in a manner which the respondents considered as failing to meet
the test of a "real" job. That is, they may have engaged in activities that gave rise to some
earnings, but because the time spent in these may have been less than a full work week or
may have yielded rather meager returns, they did not consider themselves to be
"employed" or in active search of employment. Such an explanation would seem to
provide a rationale for the observation of an absolute decline in the size of the male labor
force in recent years, a datum that we consider so far out of line with expectations that its
validity may be open to question. Labor force surveys in other countries attempt to catch
and properly classify such individuals by asking whether a person who reported that
he/she was neither employed nor seeking work had engaged in any activity that had
yielded an income during the reference week. Positive responses could then be followed
up to ascertain more precisely the labor force status of individuals. It is therefore
recommended that the Central Statistical Office review its labor force survey
questionnaire with an aim to adding questions that more deeply probe in to possible
income-earning activities of those who report themselves as without a job.
Another puzzling observation is the relatively small segment of self-employment,

especially among women. In societies where wage employment opportunities are scarce,
one tends to observe a substantial proportion of the labor force engaged in self-
employment, often referred to as "informal" labor market activity. Yet in Trinidad and
Tobago only 14 percent of female labor force members were so employed. Among men,
we observe a larger proportion reported in that capacity, some 19 percent in 1993,
probably heavily influenced by the prevalence of male agricultural smallholders. How
important self-employment is outside the agricultural sector cannot be determined from
82
Annex IV Comments on the labor force statistics collected by the CSO
the data currently available. It is likely that a more concerted effort to capture informal
sector activity, either in a self-employed or wage-earning capacity, might yield higher
labor force participation rates than those recorded in the recent past.
RECOMMENDATIONS. Based on these issues, it is recommended that the Central

Statistical Office strengthen the questionnaire. A review of the way in which the data are
tabulated may also be advisable. In addition, it is suggested that a review of the sampling
frame of the establishment survey may also be advisable. Data from an enlarged sample
of establishments would permit the tracking of wage and employment trends outside of
the energy-related and large-firm sectors. Furthermore, it is noted that inter-quarter
fluctuations in some of the published measures (particularly in the productivity measure)
seem to be far greater than one normally observes in other economies. On the other hand,
the annual averages seem to be "better behaved.”
83
Annex V
Characteristics of the labor market: an
analysis of the survey of living
conditions (1992)
Introduction
This annex explains the techniques used for the analysis of the characteristics of
the labor market highlighted in Chapter 2 of the report, and provides a more in-depth
discussion of the findings. The analysis is based on data from the Survey of Living
Conditions, 1992. The survey is described in detail in Annex I. The section in the survey
on employment has been administered to any family member above the age of 15. It
provides information on whether an individual is employed or unemployed during the
week prior to the interview. For employed individuals, information is provided on hours
of work, the sector of work and occupation. Unemployed individuals are questioned
about the duration of unemployment and why they quit their jobs. Questions are also
asked about the occupational status and hours worked in any secondary jobs. However
the questionnaire does not provide any information on the years of experience in the
labor force, current job tenure or industry of employment. While information on hours
worked is solicited, the answers are categorical (1-8, 9-16 etc.), thus the actual hours
worked are not known. For those looking for work, information about search techniques
is not provided.
The section on income provides information on monthly labor income from the
main job, secondary job and other jobs. However no information is provided about
income from bonuses and allowances (housing, transportation etc.). It is unclear whether
these bonuses have been included in reported income.
Data on the individual’s education status (currently enrolled or not), highest

examination passed and the last schooling level attended is available from the
questionnaire. It is not easy, however, to construct a years-of-schooling variable.
Labor force participation
A labor force participant is described as an individual aged 15 or over who is either

currently employed or currently unemployed but looking for work last week. Individuals
who did not look for work last week because they were discouraged and because they
knew of no vacancies were also included. The labor force participation rate is the ratio of
85
the participants to the economically active population aged 15 or over.7 In this section
some of the determinants of participation are examined.
The overall participation rate in Trinidad and Tobago was over 60 percent in 1992.8
While the participation rates for males are relatively high (close to 75 percent), those for
women are 45 percent. Male participation rates have fallen since 1970 while those of
women increased. In 1970, male participation rates exceeded 80 percent while those for
women were 33 percent. The increase in women's rates follows a global trend of
increasing labor force participation of women over the past few decades.
While male participation rates exceed those of females for all age groups, both
male and female participation follow a concave profile with respect to age. Male
participation rates are consistently above 80 percent between the ages of 21 and 60 (and
remain constant at around 94 percent between the ages of 26 and 50), female participation
rates level off at around 60-65 percent between the ages 26-40 (Table 42). Possible causes
for low participation rates among women may be low levels of education, household
responsibilities, and difficulties associated with finding employment in an economy that is
not expanding. Indian women, a significant proportion of Trinidad and Tobago's female
population, traditionally have low participation rates due to cultural reasons.
Males in rural areas are as likely to participate as those in urban areas though rural
women are less likely to participate than their urban counterparts (Table 43). Both these
results are somewhat surprising as generally in developing countries, male and female
participation rates are higher in rural areas due to the prevalence of agriculture where there
is a significant amount of unpaid family work. However, because Trinidad and Tobago is
not an agricultural based economy, the occupational structure in rural areas is not
significantly different from that in urban areas.
The participation patterns of Afro- and Indo-Trinidadians closely match the rural-
urban participation rates (Table 44). This is to be expected as Africans predominantly
reside in the urban areas while the Indian population is concentrated in rural areas. The
fact that Indian women are less likely to participate in the labor force due to cultural
factors partially explains the low overall participation rates of women as well as their
lower participation rates in rural areas.
Over 55 percent of the economically active population have not obtained any
educational degrees. While participation rates do generally tend to rise by levels of
education, both males and females who have obtained O-Level degrees tend to participate
7
Housewives and students were excluded from the sample of economically active population.
8
This is similar to the estimate of 60 percent by the Continuous Sample Survey of Population (Labor
Force Report, 1992). Our participation rates however differ slightly from the CSP rates when the data is
broken down into various sub-groups (e.g. age, groups). This is mainly due to the small number of
observations in each sub-group and the lack of weights.
86
Annex V Characteristics of the labor market: An analysis of the SLC, 1992
more (Table 45). These individuals generally fill in the "middle" occupation categories9
for which there seems to be the most demand. Individuals with advanced "A"-Level
degrees and diplomas also tend to have high labor force participation rates. Higher
participation rates at middle levels of education may also be related to the fact that rates of
return to education seem to be the highest for students with "O"-Level degrees.
Eighty percent of households have between one and three labor force participants
with the number of participants per household positively related to household size.
Households with one labor market participant predominate (43 percent) while eleven
percent of households have no labor force participants at all (Table 46). The level of
participation of household heads remained consistently high--over 70 percent of all
household heads participated. Participation rates of heads of households is especially
high in households with one or two labor market participants and declines thereafter--
heads of households with more than two participants are generally older and may have
retired from the workforce.
Labor force participation functions
Examination of simple cross-tabulations may lead to biased conclusions as other

factors are not being controlled for simultaneously. To get a better idea of the importance
of different variables in determining labor supply, gender specific participation functions
are estimated. These are probit equations where the dependent variable is binary. It takes
the value 1 or 0 depending on whether the individual was a labor force participant or not.
The participation functions control for household level characteristics (household size,
number of children, number of working adults, if the spouse works, household non-labor
income10) and individual characteristics (years of education,11 experience in the labor
force,12 region of residence (urban/rural), race and whether the individual is head of the
household) as well as labor market variables that serve as a proxy for the conditions of
local labor market (regional unemployment rates and labor incomes13). The questionnaire
does not contain any information on the individual's marital status, which is generally also
a determinant of participation.
Another variable is an indicator variable (i.e., 0 or 1) on whether the individuals
derived any income from pensions and welfare assistance. This question seems to have
9
These individuals are neither highly skilled nor totally unskilled.
10
This consists primarily of income from child support, transfer incomes to the household from
Trinidad and Tobago and abroad, and interest incomes.
11
The questionnaire does not allow proper identification of years of education. A combination of the
questions on highest examination passed and last school attended have been used to create this variable.
12
In this study, we have used the Mincerian definition of experience, i.e., experience = age--years of
education -6.
13
The local labor market variables for each of the 10 regions have been computed using the statistics
available from the "Continuous Survey of Population: Labor Force Report,” 1992. However it should be
noted that there do not seem to be extremely sharp distinctions between regional labor markets. To get
greater variation, it may have been more useful to possess information on sub-regions but our data set does
not allow us to identify sub-regions.
87
been incorrectly answered. While we will report the results of the regression including
this variable separately, caution should be used when interpreting these estimates.14
MALES. The participation rate for males (over the age of 15) was around 74
percent. This is slightly lower than in other developing countries in the world. The
participation rates of prime aged males (21-50) exceed 90 percent, a common finding (see
Table 47 for results of the probit analysis).
After controlling for other factors, most household characteristics do not affect an
individual's decision to participate. Thus the coefficients on number of children, number
of workers in household and household income are insignificant. However, controlling
for other factors, males in larger households are more likely to participate. Larger
households generally imply a greater number of dependents and this is likely to increase
the probability of participation. Another variable that does affect male participation is the
effect of a spouse working. While it should be borne in mind that this variable may be
endogenous, the positive sign implies that households where spouses of heads work are
more likely to have male participation.
Examining individual specific characteristics, a familiar concave profile with

respect to labor force experience is observed. The participation age profile peaks at
around 25 years of labor force experience. Years of education are also positively
correlated with participation levels--individuals with greater education are more likely to
participate.15
In most developing countries rural labor force participation rates are greater than
those in urban areas (primarily because of high participation in agriculture). This is not
the case in Trinidad and Tobago--even though urban men are less likely to participate, the
coefficient is insignificant. This is due to the fact that even the rural parts of the country
are not highly agricultural. 16 As expected, male heads of households are more likely to
participate than other males. By ethnic group, Indian males were as likely to participate as
African males, and males of other races were less likely to participate, holding other things
constant.
While it may be expected that local labor market conditions (i.e., regional wages or
unemployment rates) have some effect on participation rates, the analysis shows these
14
Two questions dealing with this issue were asked. First, whether the individual had applied for any
form of government assistance (pensions, public assistance, or food baskets) and second, conditional on
applying, whether the individual had received any of these benefits. In the sample, 524 individuals asked for
some form of assistance. However the answer to the second question is ambiguous. While 180 have said
that they received no assistance, the remaining 344 have not answered this question. In the analysis we
assume that these individuals did receive some form of assistance. This may be a biased assumption.
15
We ran another regression in which we used levels of education (none, primary, secondary and
tertiary) instead of years of education. Individuals with at least some primary education were as likely to
participate as compared to those with no education, while males with secondary and tertiary levels of
education were more likely to participate.
16
We have split the data into two broad classifications--rural and urban. It is possible that the results
may be more significant when we examine the data at the regional level.
88
variables to be insignificant. However, this again points to the fact that there may not be
significant local labor market variation regionally.
Results from another regression (results not reported here) including the welfare
variables indicates that the coefficient on this variable was strongly negative.17 Males on
welfare were significantly less likely to participate than males who did not obtain welfare.
While this result should be viewed with caution due to the ambiguity associated with this
variable, it does imply that any attempt to provide more generous welfare and pension
benefits, while probably leading to poverty alleviating in the short run will not lead to any
long-term benefits. It will strain the government resources, and, if benefits are made more
generous, will lead to a further decline in participation and an increase in welfare
recipients will further worsen the tight fiscal situation. To the extent that these welfare
payments are being subsidized by payroll taxes on employers, higher payroll taxes will
cause employers to go in for capital-intensive rather than labor absorbing production
technologies. Thus the objective of poverty reduction through sustained employment
growth will not be achieved.
FEMALES. Women's participation rate is fairly low in Trinidad and Tobago--about

45 percent. The factors that affect women’s participation in the workforce have also been
examined (Table 48). The findings show that household level characteristics generally
affect women's participation in the workforce. A greater number of young children in the
household adversely affects female participation though this effect seems to decline as the
children grow older. This is consistent with women leaving the workforce to look after
young children and slowly reentering it as the children grow older.
Women in households with more workers were less likely to participate--more

market work by other household members obviates the need for the woman to participate
as she can then concentrate on home production. On the other hand, women living in
larger households were more likely to participate. Larger households generally include
family members who may not be economically active (e.g., aged or disabled individuals)
and so the woman is more likely to be in the labor force attempting to augment family
income.
As in the case of males, non-labor income, the proxy for family well being, is
insignificant, even though it is of the correct sign. That is, one would expect that in
wealthier families women do not need to work--however evidence for Trinidad and
Tobago does not support this assertion.
Having a spouse that works increases the woman's probability of participation.

Coupled with a similarly strong relationship for men, this suggests that there does exist a
strong positive correlation between the probability of both males and females
participating in the household. When controlling for other factors, the female
17
The other coefficients did not change significantly.
89
participation-experience18 profile is similar to that of men and is shaped concavely.

Participation peaks at around 25 years of experience.
Indian women, who predominate in rural areas, are less likely to participate than
other women. This result is confirmed by the positively significant urban variable and the
negative effect of the Indian variable in this regression. As discussed above, Indians live
in rural areas and Indian women tend to participate less due to cultural reasons. Even
though they are more likely to participate than Indian women, women of other races are
still less likely to participate than African women.
The effects of education on participation are very similar to that of males--women

with higher levels of education are more likely to participate. Again individuals with some
primary education are as likely to participate as those with no education, while those with
higher levels of education have a greater probability of labor force participation. Local
labor market variables are also insignificant determinants of female participation.
The results of a regression including the welfare variables included (results not
reported) show that participation of women was not dependent on receiving welfare, as
both welfare recipients and non-recipients were equally likely to participate. These results
do differ significantly from those for welfare recipient men who are less likely to
participate in the workforce. While increasing welfare benefits may not be fiscally
sustainable, as discussed previously, these results seem to show that if such benefits are
targeted toward women (or female-headed households), they do not have as deleterious
effects on labor supply as they do in the case of men.
Employment and wages
In the SLC questionnaire, employment is defined as having worked for at least

one hour in the week prior to the survey. Using this definition, close to 80 percent of the
labor force is employed. Employment has been broken down into three categories, which
are called the public sector, the private formal sector and the informal sector. The first
two constitute the formal sector. The public sector is defined as consisting of statutory
boards, parastatals and central and local government employees. Employees in the
private formal sector belong to private enterprises, while the informal sector is assumed to
consist of unpaid workers, learners/apprentices, own account workers and small-scale
employers. It should be borne in mind that these definitions, particularly those of the
private formal sector and the informal sector may not be precise. This is because some
individuals who work in private enterprises may in fact be working in small, informal
sector firms, while some in the informal sector (e.g., some categories of own account
workers) may in fact be professionals (doctors, lawyers, etc.) and should be in the formal
sector. The latter problem is not very prevalent, and easy to correct using data on the
18
Using the created Mincerian experience variable may tend to bias the results for women somewhat, as
they do not work continuously once they finish their schooling. As an alternative regression, we used the
individual's age instead of the created work experience variable. The results were qualitatively similar.
90
individual's occupation. However, the issue of improperly classifying informal sector

employees as belonging to the formal sector is not easy to rectify. Occupational data
does not provide sufficient information on whether individuals belong to the informal
sector. Data on the degree of institutional and legal protection available at the workplace
would properly allow us to identify this category of workers but such information is
unavailable in the SLC.
Keeping the above caveat in mind, the employment data are examined. Overall,
the formal sector employs 78 percent of workers--74 percent of the males and 82.5
percent of the women. As in many other developing countries, the public sector is a
significant source of employment. Over 34 percent of employed males as well as females
work in this sector (Table 49). The majority of employment in the public sector is
provided in central and state government employment. Parastatals account for about a
third of male and a fifth of female public sector employment. The proportion of women
in the private formal sector exceeds that of men. While 48 percent of employed women
work in this sector, only around 40 percent of men do. The public sector was a significant
source of employment in the late 1960s and early 1970s also. In fact, employment growth
in the public sector (3.6 percent per annum) dwarfed that in the private sector (0.4 percent
per annum) during the late 1960s. By 1970, the public sector employed one-third of all
paid employees.
The informal sector currently employs over 25 percent of employed men and less
than 17 percent of the working women. Not unexpectedly, own-account workers account
for a significant majority of informal sector workers (over 75 percent for both men and
women). The rest of the informal workers are fairly evenly spread out among unpaid
workers, employers and apprentices. This proportion has not changed significantly since
the early 1970s. Part of the reason why the informal sector was small and continues to
remain small is that Trinidad and Tobago has low shares of employment in agriculture.
Household heads are more likely to be in the public sector (Table 50). Forty-two
percent of household heads are in the public sector compared to thirty-four percent of
individuals overall. However, the proportion in the informal sector is similar as fewer
household heads are likely to be in the private formal sector.
The information on the individual's occupation shows that both men and women
are most likely to be working in elementary occupations. While males are most likely to
be employed in elementary, unskilled occupations (24.6 percent), craft and related works
(21.5 percent), as machine operators (15.4 percent), and as service workers (11.3 percent),
women are concentrated in elementary occupations (26.4 percent), as clerks (25.3
percent), as service workers (16.1 percent), and as technicians and associate professionals
(14.9 percent) (Table 51). Less than four percent of males and women listed their
occupation as agriculture.
The sectoral-occupational breakdown indicates that almost fifty percent of the

males in the public sector are either employed in elementary occupations or as service
91
workers. Two thirds of the males in the private formal sector are employed as craftsmen,
machine operators or in elementary occupations, while a similar proportion of males in
the informal sector are employed in the agricultural, craft and machine operator
occupations. Over 80 percent of women in the public sector are employed as technicians,
clerks or as elementary unskilled workers while over 80 percent in the private formal
sector are employed as clerks, service workers or in elementary occupations. Thirty
percent of women workers in the informal sector are employed in elementary unskilled
occupations. (These results have not been tabulated here.)
Household heads are more likely to be employed as senior managers and

professional than the overall workforce (Table 52). Similarly, in blue collar occupations
they are more likely to be employed as machine operators or in elementary occupations.
Occupation of employment is not significantly different between rural and urban

areas (Table 53). While males in urban areas are slightly more likely to be employed in
professional occupations than those in rural areas, males employed in elementary
occupations are likely to dominate in rural areas. Distinctions between urban and rural
occupations of women are likely to be even more blurred.
The SLC does not provide any information on the industry of work, though this
information is available from the "Labor Force Report (1992)" of the Continuous Sample
Survey of Population. As in the case of occupations, there is some gender segregation by
industry also. Males are fairly evenly employed across different industries--community,
social and personal services (with over 23 percent employed), construction (15 percent),
agriculture (15 percent), trade and hotels (13 percent), and manufacturing (11 percent).
Women, on the other hand, are concentrated in two industries. Over 42 percent of female
workers are employed in community, social and personal services and close to 25 percent
are employed in trade, restaurants and hotels (Table 54).
As was observed earlier, 12 percent of households in Trinidad and Tobago have

no labor force participants. An even greater proportion of households, 22 percent, have
no workers.19 Thus only 78 percent of households in Trinidad and Tobago had at least
one worker. One worker households predominate--57 percent of households with at least
one worker had exactly one worker. Single workers tend to be concentrated in the formal
sector--close to 80 percent of these workers are either in the public or private formal
sector (Table 55).
Research from other developing countries shows that in households with multiple
workers, some individuals work in the formal sector, while others work in the informal
sector. The advantage of this is that households can augment their incomes with informal
sector work, while the informal sector workers have flexibility in hours of work and at the
same time enjoy all the benefits (health, housing etc.) because of their formal sector links.
19
Households with labor market participants and no workers have unemployed participants.
92
About 34 percent (42 percent of households with at least one worker) of households in
Trinidad and Tobago have at least two workers.20 The average size of a household with
multiple workers is over 25 percent greater than the overall sample average household
size. The data suggest that it is most likely that all workers in a household work in the
same sector--in over 42 percent of households with multiple workers, all employees work
in either the public or the private formal or informal sectors. Another common category
is those households where workers are employed in both the public and private formal
sectors--27 percent. The hypothesis is still true to some extent: --in over 80 percent of
households with least one informal sector worker at least another individual is employed
in the formal sector. Such households, however, constitute just slightly over 30 percent
of households with multiple workers.21
Examining hours of work, there is no apparent difference between male and

female weekly hours of work (Table 56).22 Women tend to work roughly uniform hours
in the public, private formal or informal sector. Men tend to work fewer hours per week
in the public sector than in the private formal or informal sectors though not significantly
so. Both men and women who are small-scale employers in the informal sector tend to
work the longest hours.
In economies faring poorly, a commonly observed phenomenon is that of

moonlighting (working at multiple jobs). This is especially true of public sector
employees who are usually poorly paid and can work in more than one job because of
high job security and poor monitoring. Surprisingly, moonlighting is a negligible
phenomenon in Trinidad and Tobago with less than 3 percent of men working a second
job and the proportion of women who moonlight close to zero. It is likely that public
sector employees are fairly well off and thus the proportion of individuals working on
more than one job is small (this is further examined below).
Sectoral and occupational wage data for males and females shows that on average
males earn 15 percent more than women (Table 57).23 While men and women earn
similar salaries in all three branches of the public sector, they earn substantially less than
men in the private formal sector (33 percent less) and the informal sector (close to 25
percent less). Even though exogenous factors which influence wages (e.g., labor force
experience, education etc.) have not been controlled for here, it is likely that there is some
20
22.5 percent of households had two workers, 7.1 percent had 3 workers and four percent had more
than three workers.
21
The percentages presented in this and the preceding paragraph are different from those in the Table.
The percentages presented here are a proportion of multiple-worker households (500) while in the table, the
percentages are presented as a proportion of households with at least one worker (1,169).
22
These results are likely to be biased as the questionnaire categorizes hours worked per week. We have
converted this categorical ordering into actual hours worked by assuming that: 0=0 hrs, Under 1=1 hrs, 1-
8=6 hrs, 9-16=14 hrs, 17-24=22 hrs, 25-32=30 hrs, 33-40=38 hrs, 41-50= 48 hrs,51-60=58 hrs, 61-70=
68 hrs, and over 71=75 hrs.
23
The questionnaire only allows a wage of up to 5 digits. All observations where monthly wages were
reported to be equal to 99,999 were deleted; 127 males (out of 1,259) and 55 women (out of 666).
93
gender discrimination. A positive development is that the gender wage gap has declined
since the 1960s in both the formal and informal sectors. In 1965, women in the formal
sector earned 40 percent less than their male counterparts while women in the informal
sector earned 55 percent less.
On the whole public sector employees are better off than other employees. Males
in the public sector fare better than in other sectors, with the exception of a relatively
small number of small-scale employers. Women in the public sector fare better than their
counterparts in all other sectors.
Occupational wage differentials point to significant male-female wage differentials

in almost all occupations. Individuals in professional occupations earn the highest wages
while agricultural workers, especially women, fare worst (Table 59, and below for further
analysis of wages). Urban-rural wage differentials show that urban wages are close to 15
percent higher than rural wages (Tables 58, 60). In all sectors except parastatals, urban
workers are better paid than rural workers. Urban workers also earn more, on average, in
all occupations compared to their rural counterparts.
Despite the fact that participation rates are generally lower at higher levels of
education, earnings show a positive relationship with levels of education (Table 61). Men
generally earn more than women at all levels of education. The education wage profile
will also be explored in greater detail below.
Employment dissimilarities
A summary statistic commonly used to measure dissimilarity in the employment

distributions of any two groups of workers is the Duncan index. The index D takes the
following form in the case of sex differentials,
k
1
D =
2
∑ | f i - m i|
i= 1
where i is the total number of sectors of interest (e.g., industries or occupations), f and m
are the sectoral employment ratios of women and men in their labor force and the
summation refers to the absolute differences between these two ratios within each sector.
The value of the index varies between 0 and 1. A value of 0 implies that men and women
have identical employment distributions across sectors and a value of 1 indicates that they
are totally dissimilarity distributed.
Using the SLC data, the Duncan index was constructed for industries as well as
occupations for all workers. The occupational index was 0.349 while the industrial index
was 0.352. A study that examined the Duncan index in 15 Latin American countries24
24
Trinidad and Tobago was not one of the countries.
94
(Psacharopoulos and Tzannatos, 1992) concluded that in this group of countries, the
unweighted occupational Duncan index was around 0.49 while the industrial index was
0.40 in the period from the 1960's to the 1980's. In Jamaica, the only Caribbean country
examined in that study, the occupational index jumped from 0.47 in 1960 to 0.54 in 1982.
Lower values of these indexes signify greater similarity in occupations and industries in
Trinidad and Tobago compared to other countries in this region.
Using data from the ILO Yearbook of Labor Statistics to get an idea about trends
in this index, industrial and occupational dissimilarity seem to have declined over time in
Trinidad and Tobago. The industrial Duncan index increased from .354 in 1970 to .395 in
1980 but declined to .352 by 1992--close to an annual decline of one percent since 1980.
Similarly, the occupational index increased from .389 in 1960 to .467 in 1980 and then fell
to .349 by 1992. This corresponds to a 2.4 percent annual decline in the index between
1980 and 1992.
Similarly, as has been reported from the various analysis, occupation dissimilarity
between rural and urban areas is minimal in Trinidad and Tobago. Using Table 53, the
geographical Duncan index was constructed for males and females. While the urban-rural
index for males was 0.12, it was even lower for women--0.07. Being close to zero, these
figures emphasize the similarity in occupational distributions across geographical areas for
both genders.
Unemployment and underemployment
Individuals are defined as being unemployed if they are over 15-years old and
have not worked during the survey week but were looking for work. Individuals who did
not look for work last week because they were discouraged or because they knew of no
vacancies are also included in the ranks of the unemployed.25
Unemployment has always been a significant problem in Trinidad and Tobago.

Even in 1970, during a period of relatively high growth and affluence due to oil
production and export, unemployment rates were around 14 percent; 10.5 for men and
17.9 percent for women. By 1992, the overall unemployment rate had risen to 20.8
percent--19.0 percent for males and 23.4 percent for females.26
Youth unemployment (between ages 15-25) appears to be a particularly serious

problem, for both men and women. For males, high levels of unemployment (over 20
25
This definition is slightly different than that in the Labor Force Survey. In the Labor Force Survey,
individuals who had not actively sought work for more than three months were not considered to be in the
labor force (and hence were not in the ranks of the unemployed). The SLC, however, does not provide any
information on when employment was last sought.
26
The overall unemployment rate is lower at 19.6 percent in the 1992 Labor Force Survey. This is
primarily because male unemployment is measured at 17 percent compared to 19.0 percent measured by the
SLC. The survey measures female unemployment at 23.9 percent.
95
percent) persist till the age of 30 (Table 62) while women's unemployment rates remain
above 20 percent till the 31-40 age group.27 This is not a new problem; in 1971
unemployment rates for individuals between the ages of 15-19 were 28 percent for males
and 36 percent for women.
While Indian women have a lower likelihood of participating in the workforce than
women of other races, female unemployment rates are fairly similar across races (Table
63). Males of other ethnic categories have higher unemployment rates compared to
African and Indian men.
Rates in rural areas are slightly higher than those in urban regions for women and
slightly lower for men (Table 64) though the differences are not significant. This is
because rural Trinidad is not heavily agriculture based and, as we saw, in Table 56, urban
and rural areas do not differ significantly in terms of occupation of employment.
Compared to 1992, 1972 unemployment rates for males were considerably lower in both
rural and urban areas--8.5 and 12.7 percent respectively. Unemployment rates for women
in rural areas (9.2 percent) were significantly lower than in 1992, but they were higher for
urban women (24.5 percent). Unemployment rates also tend to decline with higher levels
of education (Table 65). However, except for university graduates, they exceed 10
percent at all levels of education for both males and females.
An important issue to be tackled is whether unemployment is frictional or

structural. If unemployment was frictional, we would expect individuals regularly moving
in and out of unemployment and the duration of unemployment would be relatively
short. On the other hand, if the unemployment was structural, we would expect to see
relatively long durations of unemployment. While a significant proportion of
unemployment seems to be short-term (less than three months), long-term
unemployment (exceeding one year) is also a serious problem, especially among women
(Table 66). Over 50 percent of women and 32 percent of men were unemployed for more
than a year.28 A significant portion of these individuals have unemployment durations
exceeding two years. Long-term unemployment is partly due to slow economic growth
and low rates of job creation in the private, formal sector. Another reason may be that
individuals are waiting to obtain employment in high paying government jobs.
27
Our figures differ from those in the Labor Force Survey, especially for older individuals. Along with
the slightly different definition of unemployment and unweighted sampling, the sample sizes in the SLC data
set for age groups above 50 years are quite small, and this biases tabulations.
28
All unemployed men and women reported the date when they last worked. It is possible that these
individuals left the labor force for extended periods of time during this interval. In such cases, the actual
unemployment duration would be lower than the one calculated. We assume that individuals did not leave
the labor force in the time since they left their last job.
96
Underemployment is also prevalent in Trinidad and Tobago.29 Over 14 percent of

employed males and 16 percent of women work less than 33 hours per week while 10
percent of males and 12 percent of females work less than 24 hours. It is somewhat
surprising that the proportion of women underemployed is not significantly different from
men given that women are more likely to be involved in household production activities.
While these numbers suggest that underemployment is relatively high, they have to be
examined in conjunction with reasons these individuals are underemployed, i.e,. are they
voluntarily underemployed (on vacation, ill etc.) or are they involuntarily underemployed
(e.g., no work is available) (Table 67). Overall, approximately 50 percent of the
underemploymen is involuntary (i.e. there was no additional work available). rest worked
fewer hours on their own volition and should, thus, not be strictly classified as being
underemployed. This implies that about five percent of employed males and seven
percent of women are underemployed. This has declined since 1970 when about 33
percent of the employed labor force worked less than 33 hours per week. While that data
did not allow us to distinguish between voluntary and involuntary underemployment, it is
likely that underemployment has declined between 1970 and 1992.
Unemployment functions
Like the labor force participation functions, unemployment functions for males
and females have also been run. The procedure used once again is a probit, with the
dependent variable taking the value 1 if the labor force participant was unemployed and 0
otherwise. The exogenous variables are similar to those in the participation functions.
MALES. Family characteristics do have some effect on the likelihood of being

unemployed (Table 68). While having young or old children does not affect
unemployment, the presence of children aged 6-11 has a negative effect on the probability
of being unemployed, though it is unclear why this is the only significant effect.
Similarly, the higher the number of workers in the household, the less likely it is for a
male to be unemployed--probably due to the greater availability of information about
employment opportunities as well as the peer pressure on the individual to work, though
for males in larger households the probability of unemployment is greater. Male heads of
household are generally less likely to be unemployed. Overall, household incomes have
no effect on the probability of unemployment. If the spouse of a male household head
works, then the head is less likely to be unemployed. This is consistent with the finding
that in households where the female works, males are also more likely to be employed.
As expected, unemployment rates decline with experience in the labor force. This
is somewhat inconsistent with Table 62 where unemployment rates first decline and later
rise with age, but perfectly consistent with the results of the labor force survey. The
29
In the strictest sense of the term individuals are defined to be underemployed if their marginal
productivity is below the wage. However as this is difficult to measure, we have assumed the more common
definition of underemployment--if the individual works less than 40 hours/week.
97
region of residence does not affect unemployment rates significantly. Residents of urban
and rural areas are as likely to be unemployed.
While Indian males are less likely to be unemployed than African males, those of
other ethnic origins are more likely to be unemployed. A greater proportion of Indians
choose to be in the "easy entry" informal sector than do people of other races and are thus
more likely to be employed.
After controlling for other characteristics, individuals with more years of education
are less likely to be unemployed. While individuals with some primary education are as
likely to participate as those with no education, they are more likely to be unemployed.
These individuals possess few skills and so find it difficult to get formal sector jobs. At
the same time, they may be reluctant to join the informal sector where the remuneration is
much lower. Males with higher levels of education have a lower probability of being
unemployed as their skills are in greater demand.
When including the welfare variable (results not reported here) the probability of
unemployment rises with the provision of these benefits. This again points to the
conclusion that generous provision of welfare benefits, while reducing poverty in the
short run, will not lead to favorable labor market outcomes. However care must be taken
to interpret these results. To the extent that these benefits are provided to households
with unemployed members, this variable may be endogenous.
After controlling for individual and household characteristics, local wages have a
positive effect on the probability of being unemployed. This seems somewhat
contradictory as it implies that regions with the highest wage rates are those with the
highest levels of male unemployment. A possible explanation may be that these are the
regions where the public sector is most predominant and individuals are content to remain
unemployed until a government job becomes available.
FEMALES. Women's unemployment probit results are presented in Table 69.

Women with young children (below the age of 5) are more likely to be unemployed--it is
likely they cannot get a job as it may be perceived that their family and child care
commitments are too time-consuming. Alternatively, they may be unemployed because
they choose to stay at home and take care of their children. This is less plausible,
however, as they would be more likely to be out of the labor force altogether.
Household size or the number of working adults in the household have no effect
on the probability of unemployment of women. Female spouses of household heads are
less likely to be unemployed--this is similar to the result for males and equally consistent
with the high correlation in labor force participation of males and females in the
household. Being a household head has a significantly negative effect on the probability
of unemployment, a result similar to that of males. This is what we would expect as these
women generally have to work to support other household members.
98
Unlike males, the female unemployment-experience profile is U-shaped. Thus,

unemployment first declines with experience, but as the worker grows older,
unemployment rates rise. This is somewhat consistent with the belief that older workers
are laid off more quickly, particularly in times of economic decline. But this result may
also be affected by the fact that in our small sample, older women have high
unemployment rates unlike Trinidad and Tobago as a whole (if the results of the Labor
Force Survey are accurate).
Regression results point to the conclusion that after controlling for other factors,
women in urban areas are more likely to be unemployed than those in rural areas. This
can be examined in conjunction with the result that in comparison to Africans, Indian
women are less likely to be unemployed, while women of other ethnic groups are as likely
to be unemployed. While Indian women are less likely to participate, participation may
be contingent on the probability of finding employment, i.e., Indian women join the labor
force only when reasonably sure of getting a job. As Indians predominate in rural areas,
this may help explain why the probability of being unemployed is higher in urban areas
compared to rural areas.
As for men, the probability of unemployment declines with years of education.

Women with some education are more likely to be unemployed than women with no
education at all. However women with secondary and tertiary education are less likely to
be unemployed.
Welfare benefits had no effect on the probability of unemployment. Along with

the finding that women's labor force participation is unaffected by the provision of these
benefits, men seem to be more adversely affected by welfare provision in terms of
declining participation and rising unemployment probabilities.
Local labor market conditions have some effect on the probability of unemployed
females. The higher the prevailing wages in the region, the less likely it is that women are
unemployed. However, this is directly contradictory to the effect of local wages on male
unemployment.
Earnings functions
Earnings functions have also been run to determine the effect of human capital
characteristics, race, local labor market conditions, region of residence and sector and
occupation of work and other characteristics on earnings. After controlling for individuals
characteristics, earnings functions can be used to estimate the difference in earnings
between sectors (e.g., public, private and informal) as we have also done below. These
regressions have been performed for both males as well as females.
The earnings functions are assumed to be log linear. Ideally, the dependent
variable should be the log of hourly wages. However, this variable cannot be constructed.
99
While data on wages earned during the last month are available, hourly wages cannot be
constructed as the hours worked per week is a categorical variable and the number of
weeks worked in the month prior to the survey is not available. The log of monthly wages
has therefore been used as the dependent variable and an artificially constructed log of
monthly hours as the independent variable.30
Three sets of regressions have been run: in the first, human capital and regional
and ethnic characteristics are controlled, in the second set the sector of work is also
controlled and in the final set, the worker's occupation is controlled.31
MALES. The effect of variables common to the three regressions does not change
significantly. Earnings are fairly elastic with respect to hours worked. In all three
specifications shown in Table 70, increasing hours worked by 10 percent will lead to
earnings rising by close to 4.6 percent. The relationship with respect to labor force
experience is concave--rising with experience at a declining rate. This is the expected
earnings-experience pattern. Earnings peak at around 35 years of experience after which
they decline.
Region of residence does not have a significant effect on earnings. Individuals in

urban areas do not enjoy a positive wage differential over rural workers.32 This is to be
expected as labor market conditions in rural and urban areas are not vastly different--
males have similar unemployment and participation profiles. Returns to education are
positive with each additional year of education increasing earnings by close to 13 percent.
Results of a regression including levels of education (primary, secondary and tertiary),
indicates that returns are higher with higher levels of education.
Race does not seem to play a factor in earnings determination. After controlling
for other factors, African males earn as much as Indian males and males of other ethnic
origins. There does not seem to be any wage discrimination by race. The findings of
Table 56 are corroborated by regression analysis. Public sector male employees enjoy a
large premium (close to 65 percent) over workers in the informal sectors (the effect
becomes even stronger after controlling for occupations). Male employees in the private
formal sector also enjoy a significant premium over informal sector workers. There does,
however, seem to be a distinct wage premium enjoyed by public sector employees--with
wages set artificially above market levels, individuals have little incentive to join other
sectors. This situation may be further exacerbated as individuals in the public sector
receive generous benefits and non-wage compensation which, in all likelihood, have not
been captured by the question on earnings.
30
The variable, hours worked per week has been constructed as stated in footnote 16 above. This has
been multiplied by 4.2 to get the hours worked per month. As this variable is biased we have not used it to
construct the hourly earnings variable. Instead we have used it as one of the exogenous variables.
31
A problem with the data is that several individuals have reported earnings equal to 99,999 (the
questionnaire does not allow more than 5 spaces for earnings). We have excluded these observations from
our sample. Including them in our regressions affects the results significantly.
32
In the third regression, this variable is significant at the 10 percent level.
100
While senior managers and associate professionals earn the same as professionals,
males in other occupations earn significantly less, with males employed in agriculture and
elementary occupations earning the least. Local labor market conditions have no effect on
male wages.
FEMALES. The elasticity of women's wages with respect to hours worked is

greater than that of men (around 0.61). Thus, compared to men, their wages rise in
greater proportion in response to an increase in hours worked. Women's earnings-
experience profile is also concave, peaking at about the same time as men's. However, the
profile is flatter for women than it is for men. This is not surprising; for women, years of
workforce experience is weakly correlated to their labor force experience than in men’s.
This is because women may leave the workforce to take on household and child rearing
responsibilities.
As with males, region of residence has no effect on earnings. Like their male
counterparts, women get the highest returns to higher levels of education. In fact, each
additional year of experience leads to a 14 percent increase in wages. Earnings of Indian
women as well as those of other ethnic origins are insignificantly different from those of
African women.
After controlling for other characteristics, women in the public sector and private
formal sector earn significantly more than do those in the informal sector. While these
differences narrow after controlling for occupation of employment, they still remain
significant. Once again, the regression clearly points out that public sector employees get
a substantial premium over other workers.
The coefficients on occupation are qualitatively similar to those in the men's

regression. It must be pointed out that women clerks earn as much as those in
professional occupations. However, this may just reflect the fact that women in senior
occupations may be relatively underpaid. A reason for this may be that female teachers,
who are generally underpaid, predominate in more senior occupations. The analysis also
shows that local labor market variables have no effect on earnings. Thus, women's wages
are not affected by regional unemployment rates or wage levels.
Discrimination
As in most other developing countries, female labor is paid less than male labor in
Trinidad and Tobago. While a portion of this pay gap may be explained due to the
difference in personal characteristics (men may be more educated than women and may
have greater labor market experience) and employment characteristics (relative to women,
males predominate in the higher paying formal sector and work in different industries and
occupations than women), a portion of the differential may still remain unexplained. This
portion measures an upper bound on wage discrimination against women. The Oaxaca
101
(1973) technique has been used to decompose the pay gap between males and females
into these two components. Assuming the male and female earnings regressions are as
follows (where the subscript m is for male and f for females):
ln( W m ) = C m + ( X m ) b m + ξ m
ln ( W f ) = C f + ( X f )b f + ξ f
102
The ln(W)'s are the logs of earnings, the C's are the constant terms, X's are a vector
of characteristics, b's are the coefficients and E's are the error terms. The difference in the
average log of earnings is equivalent to the percentage difference between the male and
female pay. Given that the error terms in the male and female earnings functions are
mean zero, it is shown that:
ln ( W m ) - ln ( W f ) = ( C m - C f ) + [( X m ) b m - ( X f ) b f ]
where Xm and Xf are the average values of male and female characteristics in the sample.
Rearranging this equation we get:
ln(Wm) - ln(Wf ) = [(Cm - Cf ) + ( X f )(bm - bf )] + [( Xm - X f )bm]

= [( Cm - C f ) + ( X m )( bm - b f )] + [( X m - X f )b f ]
Thus the percentage difference in pay comes from two different sources: the
differential rewards to male and female characteristics in the labor market and, the
differences in the quantities of these characteristics. The portion of the wage gap arising
out of differences in quantity of characteristics can be thought of as not being
discriminatory or as "justified discrimination." However, the portion of the wage gap
arising out of different rewards to male and female characteristics can be thought of as the
upper bound of unjustified wage discrimination.33
These two equations above do not produce the same result. The former
decomposition evaluates the differential if women were paid as men. The latter evaluation
computes the discriminatory and the non-discriminatory components assuming that men
are paid like women. The first decomposition is used below.34
In the case of Trinidad and Tobago, the male-female gap was around 18 percent.
Decomposing it into its two components provided an interesting result. The non-
discriminatory part of the wage gap actually reduced wage differentials by 54 percent.
However, the discriminatory portion of the gap increased differentials by 154 percent.
This is the upper bound of discrimination. This implies that if individuals were paid solely
on the basis of their characteristics, women would earn more than men. However,
discrimination against women is so strong, that they end up earning significantly less than
their male counterparts.
33
It is considered the upper bound because the regressors do not capture all attributes affecting earnings.
Thus any variables left out of the regression lead to an upward bias in measuring discrimination.
34
While these two could lead to different results, our analysis for Trinidad and Tobago shows that both
decompositions yield similar solutions.
103
While the figures above may be overstating the extent of discrimination, it is clear
that a significant portion of the gender earnings differentials arises from sources other
than the individual's initial endowments or sector of work. This does tend to support the
hypothesis that discrimination exists in Trinidad and Tobago's labor markets.
Poverty simulations
Approximately 21.5 percent of Trinidadians live in poverty. Eliminating poverty

overall, would require a transfer of $755 (1992 TT$) to every poor individual--at a total
cost of $205 million.35 If the per capita GNP was $3,600, this amount to almost 4.5
percent of the GNP, a significant amount.
This simulation investigates if labor market "interventions", lump sum benefits, an

increase in wages or raising the unemployment benefits, can help to reduce poverty. The
policies considered below cannot apply to households with no labor market participants.
These households may have members who are aged or disabled and thus are not part of
the labor force. About two percent of poor individuals live in such households and thus
cannot benefit from these measures.
Of the 19.7 percent of poor individuals who live in households with at least one
labor market participant, 15.5 percent are in households with at least one employed
individual while 11.4 percent live in households where there is at least an unemployed
member.36
Flat-rate transfers made to the employed can aid in reducing poverty (Table 81).
For, instance, a transfer of $600/annum to each worker in poor households will reduce
poverty by about two percent, at a total cost of $31 million. The cost per person raised
out of poverty is quite high--$1,234. To obtain a similar decline in poverty, employees
wages would have to be hiked by about 10 percent. This can be fiscally unsustainable.
Similarly, unemployment benefits can be introduced for the unemployed and

these simulations are also shown in Table 81. Introducing unemployment benefits at
$900/annum for every unemployed labor force participant will decrease poverty by 2.3
percent while introducing them at $1,500/annum will lead to a decline in poverty by about
3.5 percent. However, as with the measures for employees, these are expensive.
This table shows that wage transfers or increases and unemployment benefits are
extremely expensive means to reduce poverty. Low levels of lump sum transfers to the
employees or unemployed ($300) are extremely ineffective because the cost involved per
person raised out of poverty are very large. On the other hand, increasing the levels of
35
It is assumed that the population of Trinidad and Tobago was 1.268 million in 1991. Furthermore, in
all the computations done in this section, perfect targeting and negligible administrative costs are assumed.
These costs are bound to be quite significant.
36
These are not mutually exclusive--a household may have both employed and unemployed members.
104
benefits will be fiscally burdensome on the government while not leading to large declines
in poverty levels. Furthermore, high costs will be incurred in targeting the poor among
labor market participants and ensuring that the system is not misused and these costs
have not even been factored into our calculations.
105
Annex VI
Recent history of the trade unions in
Trinidad and Tobago
During the petroleum euphoria of the late 1970s and early 1980s, trade unions
bargained for and received very substantial improvements in the terms of employment for
their members. Commitments were made that, at the time, seemed sustainable or unlikely
to become burdensome, e.g., severance allowances for redundant labor, more generous
than those provided by the Retrenchment and Severance Payment Act. Even after the
sharp fall in petroleum prices in 1982, the institutional arrangements governing wage
determination awarded organized workers wage increases that were far out of line with
the changes that were occurring in the economy as a whole. Between 1982 and 1988, real
per capita gross domestic product fell by almost 60 percent.37 By contrast, workers in
several industries managed to gain further increases in their real wages while others
suffered relatively small losses. Some part of these increases can be attributed to the
practice of negotiating three-year contracts with predetermined raises. Thus, the changed
economic situation would not be reflected in the organized sector except with a
substantial lag.
Between 1982 and 1988, one-fourth of the industries for which the Central
Statistical Office collects data reported increases in real earnings of production workers
with two-thirds of these realizing increases in excess of 10 percent. At the other extreme,
seven of the 35 industries, or 20 percent, reported declines in earnings in excess of 30
percent38 (see Table 82). In short, the 1980s saw a very substantial redistribution of
income to the organized sectors of the economy.39 By the end of the decade, the
deepening economic crisis began to be reflected in the organized sector. Beginning in
1987, the government initiated steps to reduce the real wages of public sector employees.
Cost of Living Adjustments (COLA) were suspended, an action reversed by the Industrial
Court. In 1989, a 10 percent wage decrease was introduced, but was restored in 1991. A
37
Building National Consensus on Social Policy: Trinidad and Tobago, Report of the Pilot Mission on
Socio-Economic Reform of the Inter-American Development Bank, October 1993.Volume I, Table I-1, p.
133.
38
Care should be exercised in interpreting some of the severe declines in real earnings recorded in
Table 82. At least some of these are likely to reflect changes in the universe of firms surveyed, rather than
declines in actual wages paid. For example, the disappearance of a high-wage firm in an industry could have
the effect of unduly depressing the industry average wage.
39
According to officials of the Central Statistical Office, the establishment wage data on which we rely
are drawn largely from the largest firms in each industry, which were unionized.
107
two percent general wage increase was granted in 1992 and the COLA was reinstated in
conformity with the court's ruling, though the accumulated arrears have yet to be paid.40
The increasing restraint on wage increases resulted in a sharp decline in the rate of
nominal wage increases between 1988 and 1993. No industrial sector succeeded in
maintaining or advancing the real wages of its employees, on average over this interval.
On the contrary, real wages fell throughout the industrial sector.41 (See Table 82)
Nevertheless, most industrial workers clearly fared better over the past decade than did
the unorganized sectors of the economy. For the unions that spearheaded the drive for
higher wages during the boom years, this reversal in their fortunes has posed a severe
challenge. In addition, much of the public sector and parts of the private sector have
implemented substantial reductions-in-force in spite of considerable resistance from the
unions. For some of the unions, these retrenchments have greatly reduced the size of their
organizations. In the present climate, the unions find their bargaining power sharply
reduced. They have shifted their focus away from the aggressive pursuit of higher wages
to the preservation of existing jobs.
40
Recently, the teachers' union agreed to a settlement of the COLA arrears at a discount and payable in
bonds rather than in cash. It is expected that other public sector unions will negotiate similar arrangements.
The size of the arrears is very substantial, approximately 7 percent of the 1991 gross domestic product
according to one World Bank source. Trinidad and Tobago: Policy Agenda for Sustained Development,
Report No, 10417-TR, June 1992, p. iii. In the private sector, the almost universal COLA in collective
bargaining agreements has been giving way to a buyout by employers. That is, employers are successfully
substituting a fixed, cash wage supplement in return for the abandonment of the COLA.
41
There are some inconsistencies in the course of real wages. Since virtually all collective bargaining
agreements contained cost-of-living adjustment (COLA) clauses, and since the Industrial Court continued to
grant wage increases over and above the COLA throughout the post-1982 period, it is puzzling to find such
widespread declines in average real earnings across the industrial sector, especially if the Central Statistical
Service is correct in stating that the majority of the firms in its establishment sample survey are large and
organized.
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Annex VII Health expenditures, sector inefficiencies and health reform
Annex VII
Health expenditures, sector
inefficiencies and health reform
Health expenditures
PUBLIC SECTOR EXPENDITURE 1992. The services of the public sector are
financed almost entirely by Government through fiscal mechanisms including general
taxes and a health surcharge directed through the Ministry of Health for Trinidad and the
Tobago House of Assembly (THA) for Tobago. Additional revenue is generated by user
charges at Mount Hope raising TT$ 12.98m in 1992 and rising steadily since to a present
level of almost TT$ 3m per month toward the end of 1994. Table 1 summarizes
expenditure in 1992-94 and Table 2 provides a more detailed breakdown for 1992.
Table 1: Expenditure by MoH, THA and Paying Patients at Mount Hope (TT$m)
1992 1993 1994
Trinidad 557.1 533.4 565.0

Tobago 39.1 37.5 41.4
Table 2: Expenditure 1992 in TT$m by Source
Expenditure: Ministry Tobago User

of Health House of Charges Deficit Ministry Ministry of Total
Assembly EWMSC EWMSC of Works Public
Utilities
Trinidad
Primary Care 41.67 - - - 00.27 - 41.94
Hospitals 381.73 - - - 01.85 - 383.58
Ministry HQ 31.08 - - - - - 31.08
National Programs 46.45 - - - - - 46.44
EWMSC 22.25 - 12.98 12.13 - - 50.36
EWMSC C40 Supplies 00.01 - - - - - 00.01
Other 01.55 - - - - - 01.55
Unallocated 01.76 - - - - 00.96 02.71
Tobago
Primary Care 00.06 4.78 - - - - 04.84
Hospitals 02.43 21.11 - - - - 23.54
Public Health - 13.22 - - - - 13.22
Total Recurrent 531.99 39.1 12.98 12.13 02.12 - 599.28
Capital Development 19.87 - - - - - 19.87
Total 551.86 39.11 12.98 12.13 02.12 00.96 619.15
Source: HLSP Analysis 1993.
The Ministry of Health expenditure for Tobago is for C40 supplies.
C40 drugs & supplies is included in the table. Total TT$ 51.78m.
Some minor equipment is also included in the table: PHC TT$00.31m; Hospitals TT$00.78m; Ministry HQ TT$00.01m; National programs
109
TT$00.20m.
PRIVATE SECTOR EXPENDITURE 1992. Reliable figures for expenditure in the

private sector are not available but it is estimated that a total of TT$ 487m was spent in
1992 on hospitals, drugs, doctors, nurses, diagnostics and dental services. The main
contributors to the total are drugs, which account for 47% and private doctors fees
accounting for another 25%. Payment in the private sector and for services at Mount
Hope is almost entirely out-of-pocket. Private insurance covers only around 2.8% of total
health expenditures.
Recent trends
PUBLIC SECTOR. Annual public sector expenditures on health has declined in real
terms in recent years as shown below. Table 3 shows government recurrent expenditures
on health through the Ministry of Health (only) in current prices while Table 4 shows the
same thing in constant prices. These tables do not include expenditures on health in
Tobago that is financed through the Ministry of Finance or from user charges income to
Mount Hope. The 1992 figure differs from Table 1 due to classification differences.
Table 3: Ministry of Health Budget 1988-93 (Trinidad only) Current Prices TT$m
National MoH %
Budget % Budget % Budget National
1988 5,405.0 100.0 482.0 100.0 8.9

1989 5,435.0 100.6 438.0 90.9 8.1.
1990 6,201.0 114.7 477.0 99.0 7.7
1991 6,615.0 122.4 509.0 105.6 7.7
1992 7,363.0 136.2 524.8 108.9 7.1
1993 7,700.0 142.5 503.2 104.4 6.5
Table 4: Ministry of Health Budget 1988-93 (Trinidad only) Constant Prices TT$m
National MoH %
Budget % Budget % Budget National
1988 5,405.0 100.0 482.0 100.0 7.7

1989 4,815.4 89.1 388.1 80.5 11.4
1990 4,889.7 90.5 376.1 78.0 11.0
1991 5,018.0 92.8 386.1 80.1 3.8
1992 5,222.3 96.6 371.7 77.1 6.5
1993 4,900.0 90.6 317.6 65.9 11.0
Including estimates for 1993, in current prices, the National Budget has increased
from TT$5.4 billion in 1988 to TT$7.7 billion in 1993 (a 42.6% increase). In constant 1988
prices, it has decreased from TT$5.4 billion to TT$4.9 billion (a 9.8% fall). The share of
the National Budget allocated to health fell from around 9.0% to 6.5% over this period.
110
INFLATION. Over the period, the average rate of annual inflation has been 8.5%
falling from 11% in 1989 and 1990 to around 4% in 1991, and rising again to 11% in 1993.
The rise from the 6.5% of 1992 to an estimated 10.8% in 1993 (CSO estimates) includes a
rise of 7.4% from the date of floatation of the TT$ (April 1993) to the end of the year.
Recently, concerns have been expressed about the effects that falling world oil prices are
likely to have on government budgets, although oil prices have risen again since, and
about the effects of a fall of 1% in GDP in 1993 combined with an estimated debt ratio of
almost 50%. However, historic data indicate that large fluctuations in inflation are not
unusual in Trinidad & Tobago. Also, it is estimated that the debt ratio factor will now
decline as debt levels fall from their peak years of 1993-94.
RECURRENT EXPENDITURES. In current prices, recurrent expenditures increased

from TT$ 482m in 1988 to TT$ 502m in 1993 (+ 4.15%; yearly average of TT$ 488.7m) in
Trinidad and from TT$ 30.6m to TT$ 37.4m (+ 22.6%; yearly average of TT$ 33.5m) in
Tobago.
In constant prices, recurrent expenditure fell from TT$ 482m in 1988 to TT$
317.6m in 1993 (- 34.1%; yearly average of TT$ 386.9m) in Trinidad and from TT$ 30.6m
to TT$ 23.6m
(- 22.9%; yearly average of TT$ 26.3m) in Tobago.
CAPITAL EXPENDITURES. There is no trend in capital expenditures--a reflection of

the fact that investment has not been made on a planned and regular basis.
In current prices, capital expenditures increased from TT$ 2.3m in 1988 to TT$
85.7m in 1993 in Trinidad (yearly average expenditures of TT$ 24.3m). In Tobago, the
capital expenditure varied from TT$ 1.3m in 1988 to TT$ 0.4m in 1993 (yearly average of
TT$ 0.9m taken over 5 years because 1991 data is missing). Thus, total capital
expenditures has increased proportionally greater than recurrent expenditures - from TT$
3.6m in 1988 to TT$ 86m in 1993. This is a reflection of availability of funds from
borrowing and technical cooperation.
In constant prices, capital expenditures increased from TT$ 2.3m in 1988 to TT$
54.2m in 1993 in Trinidad (yearly average of TT$ 16.7m) and from TT$ 1.3m to TT$ 0.2m
(yearly average of TT$ 0.8m over 5 years in Tobago).
TOTAL EXPENDITURES. In current prices, total expenditures on health in the

public health sector increased from TT$ 516.1m in 1988 to TT$ 625.4m in 1993 (an
increase of 21.2% and a yearly average of TT$ 547.3). In constant prices, the trend is
downward with total expenditures falling from TT$ 516.1m in 1988 to TT$ 395.7m in
1993 (a fall of--23.3% and a yearly average of TT$ 430.6m). This is due mainly to a
drastic decrease in (constant) recurrent expenditures from TT$ 512.6m to TT$ 341.2m (a
fall of 33.4% and a yearly average of TT$ 413.2m) while the (constant) capital
111
expenditures shows an upward trend from TT$ 3.6m to TT$ 54.4m and a yearly average
of TT$ 17.4m.
PRIVATE SECTOR. Insufficient information is available to detect any trends in the

private sector.
Sector inefficiencies
QUALITY. Many of the admissions to acute and long-stay beds are

unnecessary and some of the lengths-of-stay are excessive, leading to problems of over
utilization in the larger, general hospitals. This excessive hospitalization results in lower,
not higher, quality care and is indicative of the extent to which the system is failing to
prevent, identify, treat and contain conditions at a primary or ambulatory level of care.
This results in unnecessary complications or complex surgery, for example.
At the same time, there are too many acute hospital beds so that the smaller
hospitals are underutilized and do not achieve acceptable clinical standards because
patient volume are insufficient to maintain clinical skills. Recent data on these hospitals
show occupancy rates of around 40% and suggest that many of these admissions are for
social rather than clinical needs. Nevertheless, these small hospitals are staffed and cost
money. The large and busy acute general hospitals (Port-of-Spain and San Fernando)
cost between TT$ 340-415 per (adjusted) bed day compared to TT$ 500-1,000 for the
smaller underutilized hospitals including Caura, Point Fortin, Mayaro and Princes Town.
The standards of many of the support services provided are inconsistent and
inadequate including those of sterile supplies, theater management and laboratory
services. There is no quality control or clinical audit.
There are no formal quality assurance, medical audit or accreditation programs in

place. Once initially registered with the Medical Board, a graduate or specialist does not
have to produce any continuing evidence of competence such as in-service training.
Many of the junior grade medical staff are expatriates.
Much of the hospital physical stock and equipment is in poor condition and
although there have been recent renovation efforts, they have been undertaken prior to the
availability of a coherent national services plan and therefore, without proper regard to the
relatively new and underutilized facilities of Mount Hope.
There is no real practice of family medicine (or general practice) as a specialty and
little recognition of its value. Primary clinical care is provided predominantly by private
doctors working as individuals and essentially providing little more than a prescription-
writing service. There is hardly any preventive work or health promotion. In the public
sector primary care, doctors also work invariably as individuals and there is no real
practice of primary care teams.
112
Overall the public sector attempts to provide more in the way of full primary
health care. Communicable disease control programs have achieved significant success
over the years and the immunization programs have achieved coverage of between 80%
to 90% for the global target diseases under the PAHO/WHO Expanded Program of
Immunization. However full primary care coverage is limited because staff are too thinly
spread, teamwork is not well developed and the system is not geared to meet the
contemporary challenges of chronic disease.
TECHNICAL INEFFICIENCY. Many components of the health sector are internally

inefficient. Weaknesses in the preventive and curative primary care services, for example,
result in many unnecessary admissions to hospitals. In surgical wards it has been
estimated that almost 50% of patients hospitalized would not need to have been there if
primary care services had been available.
Other factors contributing to this inefficient use of resources include: staffing

patterns and employment practices (patients arriving at A&E departments are often
admitted to hospitals by junior doctors only to be discharged when seen by a consultant
the following morning). Many doctors on the public sector payroll provide fewer hours
public service than they are paid for but work long hours in private practice.
Despite some increase in activity in day surgery, the proportion of day cases and
services provided on an ambulatory basis is low compared to inpatient activity. Lengths
of stay are excessive in certain departments--a fact related to the unavailability of drugs
and supplies required for timely pharmaceutical and diagnostic support services,
inappropriate bed management, deficient discharge practice and weak primary and
community care support.
The relatively new facilities of Mount Hope have been underutilized because of
institutional constraints--the non-public service employment status of Mount Hope has
prevented the transfer of staff from Ministry facilities reluctant to loose their public
service benefits and conditions.
Many of the health centers are overcrowded, while others are underutilized.
Shortages of community nursing staff, in particular health visitors, and other support staff
who could be more community-based result in a diminishing home visiting service which
is vital to effective, preventive services and chronic disease maintenance programs.
Earlier identification of problems and support for the patient in a home setting would
prevent the onset of disease and/or complications requiring medical care.
ALLOCATIVE INEFFICIENCY. Expenditure patterns do not reflect health care

priorities. In the public sector they follow historic spending based on where facilities and
staff are located and this has resulted in supply exceeding need (and demand) in some
areas of care and need exceeding supply in others. Despite many years of policy
113
emphasizing primary care, resources have been increasingly allocated to the hospital
sector--in the early 1980s, hospitals received about five times the primary care services
budget but by 1990 this had increased to about 10 times. For the private sector, there is
no evidence that health gain is achieved in relation to expenditure for the services
provided.
114
A significant number of health centers and maternity units are also underutilized,
resulting in excessive self-referrals to the accident & emergency (A&E) departments of
the larger city hospitals (360/1,000 population per annum compared with 270/1,000 in the
Northwest Thames Region of the UK for example). Other reasons include:
• an over-supply of facilities resulting from the application of planning

norms based on travel distance rather than quality of service.
• demand factors that include a preference for hospital deliveries.
• the part-time nature of some of the health center services.
• the scarcity of doctors in the public sector centers (a reflection of
frustrations with operating in the public sector and the levels of earnings).
• inappropriate use of the skills available with, for example, nurses doing
tasks that lesser trained staff could do.
• unreliable drug supplies.
There have been no national programs for the prevention, early detection and
management of the high priority chronic diseases (for which cost effective interventions
are available) that would achieve high gains in disability-adjusted life years and no budget
of any significance is earmarked for health promotion. Where approximately TT$ 46
million is spent on national programs, there remains an emphasis on communicable
disease control despite the change in the epidemiological profile and within these
programs, there has been little shift in the methodologies for control--for example TT$ 22
million is spent on the insect vector control program, based on pesticide control when
there has been no endemic malaria for many years and only about 2% of the budget is
spent on pesticides.
ADMINISTRATIVE INEFFICIENCY. While many of the problems of the health sector

have been recognized for some time, resolution of those problems is constrained by
various and complex effects of constitutional structures and centralized administration.
These constraints effect the whole public service and are now being addressed in the
national Public Sector Reform Program.
Essentially, health services managers cannot manage effectively because they do

not control how their budgets are spent--in fact they do not even have budgets in any
meaningful sense since all staff appointments are controlled by a Public Service
Commission (PSC) so that wages and salaries (74.2% of expenditure) are committed and
not subject to direct managerial control. No staff member can be dismissed without the
consent of the PSC--no matter how unnecessary to the work of a hospital, health center
or national program and no matter how incompetent that staff member may be. There are
celebrated cases of incompetent staff being relieved of duty by hospital managers only to
be reinstated by the distant and centralized authority of the Chief Personnel Officer. It is
not surprising that managers have, for the most part, ceased attempting staff dismissals.
115
All powers of appointment, discipline and dismissal lie with the PSC whose power
is enshrined in the Constitution through Public Service Regulations. More importantly,
the converse of this inability to discipline is that no staff member can be promoted or
remunerated on the basis of competence and effort without the approval of the PSC as
well as the Ministry of Finance and the Office of the Chief Personnel Officer. The result
is that promotions are invariably awarded on the basis of seniority rather than talent and
effort--a factor which has stifling effects on the latter.
Civil service pensions are generous relative to those in the private sector,
amounting to approximately 25% of earnings on a non-contributory basis and equivalent
to a benefit of two thirds of salary at retirement age. This pension is lost (with few
exceptions) upon leaving the civil service before the age of 55 with the result that few staff
leave. By comparison, private sector pension standards amount to about 12-15% of
earnings on a contributory basis (usually equal) and equivalent to a benefit of one third of
salary at retirement age--the benefit is transferable and usually not lost on early
retirement.
The over-centralized and unmanaged structure produces almost complete inertia

in the public sector, pervaded by a sense of non-achievement and hopelessness in which
effort is seen as pointless. This is reflected in staff attitudes and is a source of regular
complaint by patients. There are remarkable exceptions to this general state of affairs and
individuals and groups of staff performing tremendous service against all the odds. There
is overstaffing in many grades and shortages in others because managers cannot reduce
staff in a particular area to invest in other staff to improve skill mix, or to invest in
technology that would provide better quality and more cost effective care for patients.
Managers do not know what their organizations really spend or what things cost
and because many things are paid for directly at the central level, they have no means or
incentive to know these things. The highly centralized and aggregated civil service
accounting system only controls total expenditures. The accounts will not permit the
generation of operational cost data. Cost and patient activity data are not linked anywhere
in the system and there is, therefore, no unit output cost information on which to plan or
control. Clinical decision making is done with no quantified data on the cost and resource
implications of decisions.
Tendering for goods and services is centralized and slow, as is the acquisition of
supplies through direct purchasing. A large hospital costing TT$100m per annum to run
cannot spend more than TT$2,500 without completing a requisition form that requires the
approval of the Permanent Secretary.
Key elements of the reform
In summary, key elements of the Health Sector Reform Program are:
116
i) Create new structures that will:
• Remove operational responsibility for health care from the public service
with its inherent constraints on system performance.
Specifically, the Ministry of Health is being relieved of operational responsibility

for the provision of services. New provider organizations (the Regional Health
Authorities) are being set up as statutory authorities outside the public service. They will
have a high degree of autonomy and will be managed on corporate lines. They are being
vested with public sector assets and will employ all staff except for those employed at
Ministry headquarters.
The role of the Ministry will change to one of sponsorship and regulation. The
Ministry will exercise its sponsorship role by effectively purchasing health services from
the RHAs.
Freedom from the administrative inefficiencies of the public service will allow the
introduction of new operating systems, including new employment arrangements of
contracted staff and performance-related reward, and will create a new climate of change
and challenge and encourage the shift from an administrative to a management culture.
ii) Create new operating systems that will:
• Improve quality, allocation and technical efficiency by introducing new

management skills and systems.
Specifically, a system of annual service agreements will be introduced (between

Ministry as purchaser and RHAs as service providers), linking RHA financing to volume,
quality and appropriateness of services provided. The purchasing plans of the Ministry
will be based on health needs assessment and this will lead RHAs to shift their
expenditure toward cost-effective, high quality services, including primary care and
preventive services.
Other operating systems will generate the information necessary for effective
planning and decision making, including services cost and activity data, quality assurance
and audit as measures of performance. The private sector will be encouraged to improve
the quality of its services i) through competition with an improved public sector, ii)
through the offer of contracts with the RHAs and iii) through regulatory mechanisms of
quality assurance and technology assessment and control.
iii) To create new individual development support programs that

will:
117
• Provide staff development support for individuals to gain new skills, to

promote new attitudes to consumers and to increase job satisfaction levels.
Specifically, extensive management development support will be provided to

managers at all levels, enabling them to maximize the opportunities presented by
structural changes and operating systems being introduced. Selected technical training
will be provided to facilitate changes in services, including chronic disease prevention and
day surgery.
iv) To rationalize services, including provision of some new infrastructure
that will
• Reinforce the improvement of service quality and equity by consolidating

primary care into strong primary care teams and hospital services into clinically viable
units.
Specifically, primary care facilities will be reduced in number but increased in size
and function and will be operated by RHAs as an integrated primary care service that
includes home support. Smaller and underutilized hospitals will be closed and services
consolidated on the six more strategically located facilities. Services will shift to more
ambulatory care and make maximum use of the country's investment in buildings and
equipment including the full operation of the Mount Hope facility.
A national ambulance service will be introduced to compensate for the travel

distance effects of hospital consolidation and selected primary care facilities will offer
specialist outpatient sessions and 24-hour services.
118
Annex VIII
Key issues in major safety net
programs
Objective Major Issues
Old Age Pensions TT$211m. (Ministry of Social Development)
• Means tested, non-contributory program to • Has lost its targeting edge and has expanded to
provide pension benefits to population over cover 80 percent of the population 65 years and
65 years of age. Pensioners receive TT$286 over.
per month and are also eligible for a food • Financially unsustainable at present levels of
subsidy of TT$71 per month. coverage as the proportion of the population 65
years and over is expected to double over time.
• At 1.75 times the poverty line, the present level
of benefits is adequate as such a non-contributory
social security system should be a safety net
rather than an entitlement income source.
National Insurance System (not on Government budget) National Insurance Board

• A contributory system of insurance for all • The coverage is limited to employed persons and
employed persons to provide for retirement not available to the self-employed or the
benefits, and to insure against sickness, unemployed. NIS covers only two thirds of the
invalidity, maternity and employment injury. labor force.
• The level of benefits is very low for a
contributory scheme and unrelated to the cost of
living--maximum rate of pension is only 1.68
times the individual poverty line and only 21
percent of average earnings. This level of
benefits is lower than the non-contributory OAP
and, if not revised, will make the system
irrelevant as a provider of social security.
• The system risks financial unsustainability in
coming years as the older population is expected
to double.
• Administrative costs are unduly high at 25-30%
of contributions and need to be addressed.
• The system needs fundamental reform with a
clear mandate and institutional autonomy for the
NIB to create a well managed, contributory social
security system providing adequate retirement
and emergency benefits.
Public Assistance TT$54m. (Ministry of Social Development)
• Provision of cash assistance to persons with • Level of benefits in the program per se are quite
disabilities and to female-headed households low. Combined with the food subsidy, these
with children. The program provides benefits benefits equal 85 percent of the poverty line,
of $101 per adult and TT$88 per child, up to falling more for a family of more than four
a maximum of TT$280 per family. because of the ceiling. However, when combined
with other public subsidies such as housing
assistance, medical care, bus passes and
temporary assistance, they create a disincentive
119

effect to leave public assistance.
• The assistance is ameliorative rather than
rehabilitative and can continue indefinitely.
Rehabilitative services are not offered to support
recipients to leave the public assistance program.
• Targeting criteria are not clearly spelled out, and
eligibility is based on subjective assessments by
medical practitioners and the social welfare
officers.
Food Subsidy TT$89.5 (Ministry of Social Development)
• Provision of cash assistance to all recipients • Duplicates benefits provided in other programs
of Old Age Pension and Public Assistance. and can easily be collapsed into them.
Level of benefits: $70.15 per month per
person subject to a maximum of $280 per
family for PA.
Unemployment Relief Program TT$130m. (Ministry of Works)

• Provides temporary employment (1-2 months • Limited coverage of only 7% of the unemployed
per year) to able-bodied unemployed between in any given fortnight. However, given the
17-65 years of age. rotating nature of employment, about 50% of the
unemployed benefited last year.
• Program has made a specific effort to target
women by providing part-time day employment
and 50% of the participants are now women.
• The level of benefits is high for the period of
employment at $310 per week, compared to the
individual poverty line of TT$43.2. However,
employment is restricted to a maximum of two
months with a yearly maximum of TT$2,480
being paid in wages to an individual. Lower
wages could potentially increase the efficiency
and the infrastructure output of the program if
capital costs and administrative expenses are
controlled.
• It appears that only one quarter of the actual
allocation is expended in wages due to high
capital intensity of some projects (40:60
materials to labor) and high administrative costs.
It appears that contract salaries account for
almost one half of total expenditure allocations,
while wages account for about one-third of total
allocation.42
• Targeting criteria are informal and the
questionnaire does not ask for household income
level, only the employment status. Selection of
participants is by community leaders. This has
sometimes raised concerns about equity of
access.
42
This needs to be confirmed. Documentation shows that labor:materials is 60:40. Also, the budget
slice for end 1993 shows contract salaries one and a half times wages paid out. So that would mean
materials:labor:administrative is 2:3:4.5.
120
Annex VIII Key issues in major safety net programs

• School Feeding Program TT$79m. (Ministry of Education)
• Provides one third nutritional requirements • Targeting of the program needs to be carefully
to needy school children. One third of the evaluated. At present, the targeting criteria are
primary school population is presently quite informal and not adequately monitored.
covered and the program is being expanded • The cost efficiency of the program needs to be
to pre-primary and secondary levels. carefully evaluated.
• While the program in itself is well conceived, it

is being expanded rapidly. This expansion should
be managed carefully or the program has the
potential to become an entitlements program.
SHARE TT$3.5m. (Ministry of Social Development)
• Provides supplementary feeding assistance • Small program, scheduled for expansion under an
and counseling and rehabilitation services to IDB loan
groups of new poor not presently covered by • Administrative costs are kept low by use of
any other programs. NGOs and by delivery of uncooked foodstuffs.
• Targeting criteria are very informal and are left to
the NGOs to determine. Effective monitoring is
essential to ensure efficient targeting and equity
in access.
• Cost efficiency of the food basket should be
monitored as some samples seemed to indicate
inclusion of relatively high-cost items in the food
basket.
• Rehabilitation components not yet operational.
YTEPP TT$25m. (YTEPP, Ministry of Sports and Youth)
• Part-time program of four-to-nine month • Limited gains in increasing employment
duration targeted at unemployed youth. opportunities or income potential of YTEPP
Provides training opportunities, supervised graduates.
work experience and promotes self- • However, the program seems to have had positive
employment opportunities through impact on youth returning to school, on
strengthening of networks of credit numeracy and learning indicators with potentially
institutions. positive impact on morale and productivity in
future years.
National Apprenticeship Scheme TT$10m. (National Training Board and the Ministry of Education)
• Provides apprenticeship training and a small • NTB has trouble placing apprentices in the
stipend to youth to ease transition into the private sector and 80 percent of the
workplace. apprenticeships have been in the public sector.
• Graduates have difficulty finding jobs after
completion of training.
• NAS and YTEPP are duplicative and need to be
integrated well with the overall vocational and
technical education policy strategy presently
under preparation.
Civilian Conservation Corps TT$10m.

• Targets unemployed youth. Provides group- • Relatively new program scheduled for expansion
based activities for community improvement under an IDB loan.
projects and provides discipline and morale • Addresses issue of idleness and values among
121

building activities. youth.
Retraining Program for Displaced Workers TT$3m. (National Training Board and Ministry of
Education)
• Targets displaced workers and provides up to • Program is very small in size and is scheduled for
3 months of training geared toward self- expansion under an IDB assisted program.
employment in 55 potential growth areas.
1994 target: 4,500 workers.
Community Action for Revival Empowerment TT$5m. (Ministry of Community Development)
• Community-based projects to improve
infrastructure and foster self reliance through
infrastructure development, counseling,
provision of meals, used clothing, etc.
Export Center and Terminal Malls TT$2m. (Ministry of Community Development)
• Targets unemployed female household heads • Very small. Jointly funded by private sector and
for provision of business training over a two- public sector.
year period to enable them to set up their
own business. • Provision of business training should be
integrated through institutions with an adequate
core of experienced technical resources to ensure
quality standards.
Community Relief Centers TT$2.5m. (Ministry of Community Development)
• Provision of meals and emotional support to • Program under preparation. Duplicative of
individuals. SHARE.
Employment of Women Through Cooperatives TT$108,000 (Ministry of Community Development)
• Business training for women working in • Program under preparation.
cooperatives. • Provision of business training should be
integrated through institutions with the necessary
core of technical resources.
122
STATISTICAL APPENDIX
List of Tables
Table 1 Trends in Real GDP, Real Per-Capita GDP, Real Growth and Unemployment Rate.................................125
Table 2 Per-Capita Expenditures, Per-Adult Equivalent Expenditures and Food Shares........................................125
Table 3 Distribution of Poverty (Total) by County and Sector .................................................................................126
Table 4 Distribution of Poverty (Total) by Characteristics of Household Head......................................................127
Table 5 Distribution of Poverty (extreme) by Country and Sector............................................................................128
Table 6 Poverty Status of the Population...................................................................................................................128
Table 7 Distribution of Characteristics of the Household Head ...............................................................................129
Table 8 Mean Budget Shares .......................................................................................................................................129
Table 9 Ownership of Consumer Durables (% Who Own At Least One) ................................................................130
Table 10 Housing Characteristics: Type of Wall..........................................................................................................130
Table 11 Housing Characteristics: Type of Toilet........................................................................................................131
Table 12 Housing Characteristics: Source of Lighting................................................................................................131
Table 13 Housing Characteristics: Water Source.........................................................................................................132
Table 14 Housing Characteristics: Availability of Water (Frequency) .......................................................................132
Table 15 Mean Number of Persons (Per Household) and Mean Proportions (Per Household)
in Different Age Groups.................................................................................................................................133
Table 16 Mean Number of Females and Mean Proportion Female in Different Age Groups ...................................133
Table 17 Distribution of Types of Households ............................................................................................................134
Table 18 Age Distribution of Non-Nuclear Household Members ..............................................................................134
Table 19 Gender Distribution of Non-Nuclear Household Members (% Female) ....................................................134
Table 20 Employment Status of Males and Females 25 to 54 Years of Age..............................................................135
Table 21 Mean Number of Persons (Per Household) With Secondary (7-Year) and Post-Secondary
Schooling ........................................................................................................................................................135
Table 22 National Insurance Coverage: Percent Covered............................................................................................135
Table 23 Remittances Received from Children, Relatives, and Others.......................................................................136
Table 24 Age-Specific Enrollment Rates by Quintile & Region.................................................................................136
Table 25 Percentage With At Least Secondary (7-Year) Schooling............................................................................137
Table 26 Distribution of Health Indicators...................................................................................................................137
Table 27 Health Care Utilization ..................................................................................................................................137
Table 28 Children's Health Status Indicators: Inoculations.........................................................................................138
Table 29 Children's health status indicators .................................................................................................................138
Table 30 Duration of Breastfeeding (Children 1 to 5 Years of Age)..........................................................................138
Table 31 School Types and Enrollment of the Secondary Level..................................................................................139
Table 32 Age Group and Enrollment by Quintile.........................................................................................................139
Table 33 Secondary School Enrollment by Grade and Income Group (Percentage) ..................................................140
Table 34 Mean Days of Attendance and Reasons for Non-Attendance .......................................................................140
Table 35 Means of Transportation (Percentage)...........................................................................................................141
Table 36 Travel and Lunch Cost by Education Level (TT$)........................................................................................141
Table 37 Mean CEE Score for Entrance to Secondary School by School Type and Enrollment in
Secondary Schools by School Type and Family Income Level.....................................................................142
Table 38 Family Income and Mean CEE Score of Intakes into Secondary Schools from Various Years.................142
Table 39 Distribution of Mean CEE Examination (Percentage).................................................................................142
Table 40 CXC Examination Scores at Exit of Secondary Education (Form 5), 1988...............................................142
Table 41 Teachers’ Qualification at the Secondary Level............................................................................................143
Table 42 Labor Force Participation Rates (by Age).....................................................................................................143
Table 43 Labor Force Participation Rates (by Region)................................................................................................143
Table 44 Labor Force Participation Rates (by Race) ...................................................................................................143
Table 45 Labor Force Participation Rates (by Highest Degree Obtained) ..................................................................144
Table 46 Labor Force Participants and Household Size ..............................................................................................144
Table 47 Participation Probits (Males).........................................................................................................................144
Table 48 Participation Probits (Females) .....................................................................................................................145
Table 49 Percentage Employed in Different Sectors (by Gender) ...............................................................................145
123
Table 50 Percentage of Household Heads Employed in Different Sectors (by Gender) ............................................146
Table 51 Occupation (by Gender) .................................................................................................................................146
Table 52 Occupation of Household Heads (by Gender) ..............................................................................................147
Table 53 Occupation by Region and Gender ................................................................................................................147
Table 54 Industry (by Gender) .......................................................................................................................................148
Table 55 Household Workers (Sector of Work) ..........................................................................................................148
Table 56 Hours Worked in Different Sectors (by Gender) ..........................................................................................149
Table 57 Monthly Wages on Primary Job in Different Sectors (by Gender)...............................................................149
Table 58 Monthly Wages on Primary Job in Different Sectors (by Region)...............................................................150
Table 59 Monthly Wages on Primary Job in Different Occupation (by Gender)........................................................150
Table 60 Monthly Wages on Primary Job in Different Occupation (by Region)........................................................151
Table 61 Monthly Earnings (by Highest Degree Obtained) .........................................................................................151
Table 62 Unemployment Rates (by Age) ......................................................................................................................151
Table 63 Unemployment Rates (by Race).....................................................................................................................152
Table 64 Unemployment Rates (by Region) .................................................................................................................152
Table 65 Unemployment Rates (by Highest Degree Obtained) ...................................................................................152
Table 66 Duration of Unemployment ...........................................................................................................................153
Table 67 Reasons for Underemployment: Proportion Voluntarily and Involuntarily Underemployed.....................153
Table 68 Unemployment Probits (Males).....................................................................................................................153
Table 69 Unemployment Probits (Females) .................................................................................................................154
Table 70 Earnings Functions (Males) ...........................................................................................................................155
Table 71 Earnings Functions (Females) .......................................................................................................................156
Table 72 Household and Individual Characteristics by Quintile and Poor/Non-Poor ...............................................157
Table 73 Household Characteristics by Quintile..........................................................................................................157
Table 74 Household Labor Force Characteristics........................................................................................................158
Table 75 Characteristics of Individual Labor Market Participants by Quintiles.........................................................158
Table 76 Characteristics of Individual Labor Market Participants by Quintiles (Males)...........................................159
Table 77 Characteristics of Individual Labor Market Participants by Quintiles (Females) .......................................159
Table 78 Characteristics of Individual Labor Market Participants Across Quintiles .................................................160
Table 79 Characteristics of Individual Labor Market Participants Across Quintiles (Males) ...................................160
Table 80 Characteristics of Individual Labor Market Participants Across Quintiles (Females)................................161
Table 81 Poverty Simulations .......................................................................................................................................162
Table 82 Percentage Change in Real Weekly Earnings by Industry, 1982-93 ............................................................163
124
Statistical Appendix
Table 1: Trends in Real GDP, Real Per-Capita GDP, Real Growth and Unemployment Rate
Real GDP Real Growth Real per-capita Unemployment
Year (constant, Rate (constant, 1985) Rate
1985) GDP (TT$)
($Mn)
1981 21,480 4.6 19,213 10.4
1982 22,298 3.8 19,256 9.9
1983 19,998 -10.3 17,269 11.1
1984 18,848 -5.8 16,082 13.4
1985 18,071 -4.1 15,237 15.6
1986 17,478 -3.3 14,577 17.2
1987 16,681 -4.6 13,650 22.2
1988 16,027 -3.9 12,915 22.0
1989 15,895 -0.8 12,595 22.0
1990 16,135 1.5 12,576 20.0
1991 16,567 2.7 13,264 18.9
1992 16,287 -1.7 12,824 19.2
1993 16,016 -1.7 12,493 19.8
1994 16,660 4.0 12,855 18.2
Source: Central Bank, Central Statistical Office, Ministry of Finance
Table 2: Per-Capita Expenditures, Per-Adult Equivalent Expenditures and Food Shares

Per-adult
equivalent Per-capita Food Share Sample
expenditure expenditure (%) Size
QUINTILE
Poorest 2595.5 1612.9 56.7 1243
II 4513.1 2994.1 54.7 1235
III 6284.5 4416.4 51.5 1253
IV 8947.5 6594.8 45.8 1241
Richest 16367.0 13296.2 38.9 1248
COUNTY
Port-of-Spain 10198.8 7823.0 48.6 253
San Fernando 8145.4 6376.3 46.6 127
St. George 7761.2 5770.9 48.8 2324
Caroni 8912.6 6808.3 50.1 958
Nariva 6358.6 4193.4 52.1 175
St. Andrew/St. David 6980.6 5163.8 48.3 313
Victoria 7423.2 5576.0 49.4 1042
St. Patrick 5903.3 4392.2 53.5 793
Tobago 9787.6 7011.8 43.5 235
OVERALL 7749.9 5790.1 49.5 6220
Source: Survey of Living Conditions, 1992.
125
Table 3: Distribution of Poverty (Total) by County and Sector

Head Count Poverty Gap P2 Sample Size
County Index Share of Index Share of Index Share of %
(%) Total (%) (%) Total (%) (%) Total (%) of Total
Port-of-Spain 13.4 2.6 5.3 3.2 2.3 3.1 4.1
San Fernando 22.1 2.1 7.6 2.3 3.6 2.4 2.0
St. George 25.0 43.5 7.7 42.6 3.5 41.9 37.4
Caroni 5.9 4.2 1.1 2.6 0.3 1.7 15.4
Nariva 22.3 2.9 7.5 3.2 3.5 3.2 2.8
St. Andrew 31.6 7.4 11.9 9.0 6.0 9.9 5.0
Victoria 24.4 19.0 6.9 17.2 2.8 15.2 16.8
St. Patrick 25.6 15.2 9.2 17.5 4.9 20.1 12.8
Tobago 17.5 3.1 4.3 2.4 2.2 2.7 3.8
SECTOR
Urban 23.9 48.2 7.4 48.1 3.4 47.4 43.5
Rural 19.7 51.8 6.2 51.9 2.9 52.6 56.5
OVERALL 21.2 100.0 7.3 100.0 3.7 100.0 100.0
Source: Survey of Living Conditions, 1992. N=6220
126
Table 4: Distribution of Poverty (Total) by Characteristics of Household Head

Index Share of Index Shar of Index Share of %
GENDER
Male 18.4 65.0 5.5 62.9 2.5 61.4 76.0
Female 31.3 35.0 10.4 37.1 5.0 38.6 24.0
ETHNIC GROUP
African 24.8 46.7 8.3 50.1 3.9 51.4 40.4
Indian 17.3 35.7 5.1 33.8 2.3 33.3 44.3
Mixed 27.4 17.7 7.8 16.1 3.4 15.3 13.8
Other 0.0 0.0 0.0 0.0 0.0 0.0 1.4
AGE IN YEARS
<=24 34.3 2.6 6.3 1.5 1.7 0.9 1.6
25-34 20.1 15.1 7.3 17.5 3.6 18.6 16.1
35-44 24.1 29.7 8.1 32.0 4.0 34.0 26.4
45-54 21.0 24.4 5.7 21.2 2.3 18.5 25.0
45-64 20.9 14.6 7.1 15.9 3.6 17.7 15.0
65+ 18.4 13.6 5.1 12.0 2.1 10.3 15.8
SCHOOLING
No school 28.5 5.5 7.1 4.4 3.4 4.5 4.1
Primary 25.4 74.1 8.2 76.9 3.8 77.9 62.5
Junior Secondary 28.6 7.4 7.2 6.0 2.7 4.9 5.6
Secondary 12.5 12.2 4.0 12.4 1.9 12.6 20.9
Post-secondary 2.8 0.6 0.3 0.2 0.0 0.0 4.6
Other 2.0 0.2 0.4 0.1 0.1 0.1 2.4
EMPLOYER
Statutory Board 11.0 2.0 4.3 2.5 2.4 3.0 3.8
Govt. State 12.3 5.4 3.1 4.4 1.0 3.1 9.4
Enterprise
State/Local 17.2 14.8 5.9 16.3 2.8 17.0 18.4
Government
Private Enterprise 22.5 26.8 6.9 26.4 3.0 24.6 25.4
Self-employed 23.8 15.8 7.0 14.9 3.1 14.5 14.2
Proprietor 9.7 1.0 3.0 1.0 0.9 0.7 2.2
Other 18.3 1.1 1.4 0.3 0.2 0.1 1.3
Unemployed 28.3 25.6 9.2 26.6 4.3 27.2 19.3
Never Worked 26.8 7.5 8.6 7.8 5.0 9.8 6.1
OVERALL 21.2 100.0 7.3 100.0 3.7 100.0 100.0
127
Table 5: Distribution of Poverty (extreme) by Country and Sector

Index Share of Index Share of Index Share of (%)
COUNTY
Port-of-Spain 13.4 2.6 2.4 3.0 0.9 2.3 4.1
San Fernando 11.0 2.0 3.6 2.2 1.9 2.6 2.0
St. George 12.4 41.4 3.7 42.3 1.7 41.0 37.4
Caroni 0.8 1.2 0.2 1.1 0.1 0.7 15.4
Nariva 13.7 3.5 4.1 3.5 1.7 3.1 2.8
St. Andrew 23.3 10.5 7.0 10.7 3.0 10.1 5.0
Victoria 12.7 19.0 2.8 14.2 1.1 12.2 16.8
St. Patrick 13.8 15.7 5.2 20.2 3.0 24.8 12.8
Tobago 6.0 2.0 2.3 2.6 1.3 3.2 3.8
SECTOR
Urban 12.4 48.3 3.6 47.6 1.6 45.9 43.5
Rural 10.2 51.7 3.1 52.4 1.5 54.1 56.5
Overall 11.2 100.0 3.3 100.0 1.5 100.0 100.0
Table 6: Poverty Status of the Population
Poor but not Extremely

County Not Poor extremely poor Poor
Port-of-Spain 86.6 0.0 13.4
San Fernando 78.0 11.0 11.0
St. George 75.0 12.6 12.4
Caroni 94.2 5.0 0.8
Nariva 77.7 8.6 13.7
St. Andrew 68.4 8.3 23.3
Victoria 75.6 11.7 12.7
St. Patrick 74.4 11.9 13.8
Tobago 82.6 11.5 6.0
Overall 78.5 10.3 11.2
Sample size 4885 639 696
128
Table 7: Distribution of Characteristics of the Household Head

Quintiles
Poorest II III IV Richest Total
Percent female 34.5 24.7 24.9 17.5 18.4 24.0
Mean age 47.2 48.9 48.7 48.4 48.5 48.3
Ethnic group (%)
African 47.1 43.9 40.2 34.1 36.9 40.4
Indian 35.8 42.2 45.0 49.3 49.3 44.3
Mixed 17.1 13.0 14.8 15.2 9.1 13.8
Other 0.0 1.0 0.0 1.5 4.7 1.4
Last school attended (%)
No school 5.9 4.7 2.8 3.4 3.9 4.1
Primary 73.3 71.3 70.6 56.4 41.0 62.5
Junior Secondary 7.2 4.9 3.5 6.6 5.7 5.6
Secondary 12.8 16.0 18.6 25.6 31.5 20.9
Post-secondary 0.6 2.1 1.8 5.6 12.6 4.6
Other 0.2 1.1 2.7 2.4 5.4 2.4
Employer (%)
Statutory Board 1.8 2.7 4.1 5.1 5.4 3.8
Govt. State Enterprise 5.8 7.3 8.2 12.4 13.2 9.4
State/Local Government 15.5 19.7 16.4 21.8 18.8 18.4
Private Enterprise 28.1 25.6 27.5 21.1 24.7 25.4
Self-employed 15.2 13.3 15.7 14.8 12.1 14.2
Proprietor 1.1 1.9 0.4 1.9 5.5 2.2
Other 0.5 1.8 1.4 0.6 2.2 1.3
Unemployed 25.9 20.1 19.8 16.7 14.2 19.3
Never Worked 6.2 7.7 6.5 5.7 3.9 6.0
Table 8: Mean Budget Shares

Quintiles
Mean annual
Goods I II III IV V Total expenditure
(TT$)
Meats 11.3 12.5 13.1 12.7 11.3 12.2 2918.1
Dairy Products 7.0 7.2 7.1 6.1 5.0 6.3 1391.8
Cereals, potatoes 16.4 11.8 10.3 8.0 6.1 9.6 1931.3
Vegetables & fruits 4.9 6.4 5.5 5.4 4.3 5.2 1197.9
Beverages 3.5 4.1 3.9 4.3 4.6 4.2 1069.0
Sweets, sugar 3.0 2.5 2.3 1.9 1.5 2.1 466.2
Spices & Condiments 2.9 3.3 3.1 2.7 2.0 2.7 594.7
Oils, butter, etc. 4.7 4.1 3.5 2.7 1.9 3.1 620.8
Nuts 1.7 1.6 1.4 1.2 1.0 1.3 298.2
Other food 2.3 3.2 3.3 3.3 4.0 3.3 933.9
Personal care 6.4 5.8 5.6 4.9 3.7 5.0 1100.9
Kitchen, household supplies 4.2 3.9 3.2 2.8 2.3 3.1 645.8
Reading, recreation 1.2 2.7 4.9 5.7 9.2 5.5 1794.0
Transport expenses 7.2 11.4 12.4 15.2 19.8 14.3 4706.4
Schooling expenses 5.0 3.1 2.8 2.8 2.3 3.0 884.7
Clothing 4.0 4.9 5.8 6.7 6.6 5.8 1721.3
Medical expenses 1.9 2.2 2.3 3.7 4.1 3.1 986.7
Rent, utilities 12.2 9.0 8.5 9.0 8.2 9.1 1919.3
Other non-food 0.1 0.2 0.9 0.7 2.3 1.0 471.5
Food Share 0.57 0.56 0.53 0.48 0.41 0.50
Mean per-capita expenditure 1612 2994 4416 6595 13296 5790
Survey of Living Conditions, 1992. N=1331
Source:
These calculations are based on data for 1331 households for which item-wise expenditure information for all food and
Note:
nonfood groups is available .
129
Table 9: Ownership of Consumer Durables (% Who Own At Least One)

Quintiles
Cars 15.3 23.6 33.7 54.0 71.2 39.6
Motorbikes 1.7 0.2 1.1 1.5 2.9 1.5
Freezers 62.3 77.2 90.0 92.9 94.2 83.4
Stereos 25.2 43.4 49.1 59.8 59.5 47.4
TVs 72.6 84.5 93.9 94.8 95.8 88.4
Stoves 94.0 96.7 97.7 98.3 98.6 97.0
Polishers 1.0 3.6 5.4 9.3 12.0 6.2
Radios 46.3 53.6 64.6 70.5 74.7 62.0
Air conditioners 0.0 1.5 3.2 7.0 11.9 4.7
Sewing Machines 28.8 38.5 50.6 56.1 58.0 46.5
Vacuum Cleaners 3.2 4.4 12.2 23.0 38.7 16.3
Washing Machines 15.2 27.6 44.0 58.8 71.2 43.4
Hot Water 0.7 2.0 5.2 14.8 30.7 10.7
Clothes Dryer 0.5 1.8 3.5 8.3 20.1 6.9
Lawn Mower 0.4 3.3 5.1 9.2 20.8 7.8
Bicycles 11.5 16.7 20.4 27.0 29.7 21.1
Other 23.5 16.6 15.5 10.5 9.0 15.0
Sample Size 1243 1235 1253 1241 1248 6220
Table 10: Housing Characteristics: Type of Wall

Wood &
Brick Concrete Concrete Wood Other
QUINTILE
Poorest 20 % 27.3 11.6 9.1 50.6 1.4
II 32.9 17.0 11.0 37.1 2.1
III 44.8 18.3 11.3 25.3 0.4
IV 46.1 22.0 15.2 16.6 0.1
Richest 20 % 51.6 28.2 10.5 9.7 0.0
COUNTY
Port-of-Spain 52.6 6.7 15.0 25.7 0.0
San Fernando 31.5 30.7 25.2 12.6 0.0
St. George 43.7 31.5 5.2 17.7 2.0
Caroni 53.4 7.1 10.3 27.2 1.9
Nariva 34.9 0.0 32.0 33.1 0.0
St. Andrew 74.1 0.0 4.2 21.7 0.0
Victoria 9.1 32.2 22.3 35.6 0.9
St. Patrick 35.9 0.9 7.8 54.5 0.9
Tobago 59.6 2.6 22.6 15.3 0.0
SECTOR
Urban 43.9 29.1 7.1 18.2 1.7
Rural 37.7 11.8 14.7 34.9 1.0
OVERALL 40.4 19.3 11.4 27.6 1.3
130
Table 11: Housing Characteristics: Type of Toilet

WC linked WC not linked
Pit Latrine to Sewage to sewage Other/None
QUINTILE
Poorest 20 % 67.5 9.7 21.5 1.3
II 55.9 11.7 32.2 0.2
III 40.5 15.4 44.1 0.0
IV 23.2 12.4 64.4 0.0
Richest 20 % 14.4 20.6 64.6 0.4
COUNTY
Port-of-Spain 32.0 59.3 8.7 0.0
San Fernando 1.6 74.0 20.5 3.9
St. George 32.8 24.2 42.5 0.5
Caroni 49.6 1.6 48.6 0.2
Nariva 57.7 1.4 38.9 0.0
St. Andrew 49.8 1.9 48.2 0.0
Victoria 39.0 0.0 61.0 0.0
St. Patrick 54.0 4.5 40.6 0.9
Tobago 40.0 0.0 60.0 0.0
Sector
Urban 31.3 29.8 38.3 0.6
Rural 47.2 1.8 50.7 0.3
Overall 40.3 14.0 45.3 0.4
Table 12: Housing Characteristics: Source of Lighting

Electricity Other
QUINTILE
Poorest 20 % 77.4 22.6
II 86.8 13.2
III 95.5 4.5
IV 95.1 4.9
Richest 20 % 96.8 3.2
COUNTY
Port-of-Spain 96.8 3.2
San Fernando 89.0 11.0
St. George 94.3 5.7
Caroni 86.5 13.5
Nariva 85.1 14.9
St. Andrew 88.5 11.5
Victoria 89.9 10.1
St. Patrick 82.4 17.7
Tobago 94.5 5.5
SECTOR
Urban 94.3 5.7
Rural 87.2 12.8
OVERALL 90.3 9.7
131
Table 13: Housing Characteristics: Water Source

Piped water Piped water Public
in dwelling in yard Standpipe Other
QUINTILE
Poorest 20 % 33.7 15.1 31.3 19.9
II 51.1 15.8 18.9 14.2
III 61.6 11.3 13.0 14.1
IV 75.5 10.2 6.5 7.8
Richest 20 % 80.3 7.0 5.1 7.6
COUNTY
Port-of-Spain 67.6 18.6 13.8 0.0
San Fernando 83.5 5.5 11.0 0.0
St. George 68.3 8.8 15.5 7.4
Caroni 44.5 22.5 10.8 22.3
Nariva 50.9 14.9 26.9 7.4
St. Andrew 40.9 14.7 10.2 34.2
Victoria 64.0 10.0 15.4 10.6
St. Patrick 55.4 5.8 19.2 19.7
Tobago 64.7 17.5 9.8 8.1
SECTOR
Urban 68.9 9.6 15.1 6.4
Rural 54.1 13.6 14.7 17.6
OVERALL 60.5 11.9 14.9 12.7
Table 14: Housing Characteristics: Availability of Water (Frequency)

More than 3 Twice Less than two
Daily times per week weekly times per week
QUINTILES
Poorest 20 % 51.6 20.6 5.3 22.6
II 58.4 18.7 5.3 17.5
III 60.8 18.5 6.4 14.3
IV 59.4 15.0 8.6 17.0
Richest 20 % 66.8 16.8 7.6 8.8
COUNTY
Port-of-Spain 72.7 6.7 8.3 12.3
San Fernando 82.7 14.2 3.2 0.0
St. George 75.5 13.4 3.6 7.5
Caroni 56.9 21.5 6.4 15.2
Nariva 55.4 38.9 0.0 5.7
St. Andrew 59.7 4.5 4.5 31.3
Victoria 55.3 24.5 8.7 11.5
St. Patrick 17.8 18.4 13.2 50.6
Tobago 46.4 33.6 13.2 6.8
SECTOR
Urban 75.6 12.8 4.1 7.6
Rural 47.1 21.9 8.6 22.5
OVERALL 59.4 17.9 6.6 16.0
132
Table 15: Mean Number of Persons (Per Household) and Mean Proportions (Per Household) in
Different Age Groups
Quintiles
I II III IV V Total
Mean numbers
0 to 18 years 3.23 2.43 1.73 1.44 0.80 1.73
19 to 24 years 0.76 0.55 0.45 0.38 0.33 0.46
25 to 54 years 1.73 1.78 1.66 1.63 1.39 1.61
55 to 64 years 0.17 0.19 0.17 0.28 0.26 0.22
65 and over 0.20 0.30 0.33 0.26 0.24 0.27
Mean proportions
0 to 18 years 48.6 40.6 34.6 29.4 18.0 31.7
19 to 24 years 12.5 9.9 9.1 8.7 9.4 9.7
25 to 54 years 29.8 35.3 38.5 40.6 48.4 40.0
55 to 64 years 3.9 5.3 4.0 8.9 11.4 7.4
65 and over 5.3 8.9 13.7 12.3 12.8 11.2
Table 16: Mean Number of Females and Mean Proportion Female in Different Age Groups
Quintiles
I II III IV V Total
Mean numbers
0 to 18 years 1.51 1.25 0.88 0.70 0.42 0.86
19 to 24 years 0.37 0.29 0.22 0.21 0.14 0.23
25 to 54 years 0.94 0.86 0.87 0.83 0.71 0.83
55 to 64 years 0.11 0.10 0.10 0.14 0.13 0.12
65 and over 0.11 0.15 0.16 0.13 0.11 0.13
Mean proportions
0 to 18 years 45.2 51.7 50.8 48.7 52.8 49.9
19 to 24 years 48.0 54.2 54.3 56.0 42.7 50.8
25 to 54 years 58.5 50.4 52.7 51.1 49.9 52.1
55 to 64 years 63.6 54.9 61.4 49.3 50.5 54.1
65 and over 52.9 50.0 48.7 49.0 46.6 48.9
133
Table 17: Distribution of Types of Households

Quintiles
Household type I II III IV V Total
Only household head 1.5 4.7 8.3 11.9 25.2 12.3
Head & Spouse / no children 1.5 2.1 4.8 8.0 11.9 6.6
Head, Spouse & own children 40.7 48.1 42.2 42.0 33.2 40.3
Head & Children / no spouse 17.7 11.1 13.2 11.2 10.9 12.4
Households with at least one 38.7 34.0 31.5 26.9 18.9 28.4
non-spouse, non-own child
member
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 18: Age Distribution of Non-Nuclear Household Members

Quintiles
Ages I II III IV V Total
0 to 18 69.3 64.3 57.8 62.4 46.5 61.0
19 to 24 12.6 10.0 10.9 9.1 15.5 11.4
25 to 54 15.4 17.2 24.0 20.0 26.1 20.0
55 to 64 0.9 0.9 1.0 1.8 4.2 1.6
65 and over 1.9 7.7 6.3 6.7 7.8 5.9
Note: Non-nuclear members refers to persons other than the household head, his/her
spouse, and head's children.
Table 19: Gender Distribution of Non-Nuclear Household Members

(% Female)
Quintiles
Ages I II III IV V Total
0 to 18 47.7 56.3 53.2 48.5 50.0 51.3
19 to 24 55.6 59.1 66.7 60.0 31.8 54.2
25 to 54 57.6 57.9 56.5 69.7 62.2 60.4
55 to 64 100.0 50.0 100.0 100.0 100.0 93.3
65 and over 100.0 52.9 66.7 72.7 72.7 67.3
Total 51.6 56.6 56.8 56.4 54.2 55.1
134
Table 20: Employment Status of Males and Females 25 to 54 Years of Age

Quintiles
Employment status 1 2 3 4 5 Total
Males:
Mean number who did not work last week 0.30 0.25 0.16 0.11 0.06 0.15
Mean number employed last week 0.46 0.62 0.60 0.68 0.62 0.60
Mean % who did not work 39.7 27.4 19.8 12.0 7.3 18.8
Mean % who have never worked 3.5 3.5 3.4 1.2 0.6 2.2
Females:
Mean number who did not work last week 0.28 0.21 0.25 0.15 0.14 0.20
Mean number employed last week 0.25 0.30 0.30 0.36 0.40 0.33
Mean % who did not work 55.1 41.7 44.7 31.2 26.7 37.8
Mean % who have never worked 43.1 40.6 37.5 39.3 24.2 36.1
Table 21: Mean Number of Persons (Per Household) With Secondary (7-Year) and Post-Secondary
Schooling
Quintile
Secondary
19-24 0.43 0.34 0.33 0.29 0.23 0.30
25-44 0.31 0.43 0.49 0.55 0.48 0.47
45-64 0.03 0.08 0.04 0.12 0.16 0.09
Post Secondary
19-24 0.02 0.03 0.02 0.04 0.07 0.04
25-44 0.01 0.03 0.05 0.12 0.14 0.08
45-64 0.01 0.01 0.01 0.02 0.07 0.03
Table 22: National Insurance Coverage: Percent Covered

Age groups
19-24 25-54 55-64
QUINTILE
Poorest 20 % 14.4 21.0 14.3
II 11.5 31.3 25.0
III 26.5 38.7 31.3
IV 31.6 48.1 36.8
Richest 20 % 39.1 62.5 45.3
COUNTY
Port-of-Spain 30.8 55.4 65.0
St. George 26.7 44.4 27.1
Caroni 28.6 45.4 47.2
Nariva 6.7 17.5 42.9
St. Andrew 15.2 23.4 14.3
Victoria 20.0 39.0 34.5
St. Patrick 17.1 41.5 27.3
Tobago 36.4 61.0 56.3
SECTOR
Urban 27.4 45.5 31.8
Rural 22.0 40.5 36.7
OVERALL 24.3 42.7 34.7
Sample size 666 2321 320
135
Table 23: Remittances Received from Children, Relatives, and Others

Remitter
Children Relatives Others At least One
QUINTILE
Poorest 20 % 14.5 7.1 1.1 20.5
II 4.1 6.0 3.2 12.6
III 4.4 6.5 5.0 14.4
IV 3.6 3.1 2.9 8.9
Richest 20 % 4.1 1.6 5.8 9.4
COUNTY
Port-of-Spain 10.4 6.7 8.3 21.7
San Fernando 11.0 9.5 4.7 25.2
St. George 7.8 7.8 5.9 18.4
Caroni 1.2 1.4 2.7 5.2
Nariva 0.0 1.1 0.0 1.1
St. Andrew 6.1 0.0 0.0 6.1
Victoria 5.9 3.5 2.5 11.8
St. Patrick 4.0 3.8 0.4 8.2
Tobago 15.5 4.9 2.7 18.7
SECTOR
Urban 8.2 7.7 6.0 19.0
Rural 4.5 2.6 1.7 8.6
OVERALL 6.1 4.8 3.6 13.1
Sample Size 378 299 223 817
Household Remittances 4.6 5.2 3.6 12.25
Table 24: Age-Specific Enrollment Rates by Quintile & Region

Primary (5-11) Secondary (12-17)
QUINTILE
Poorest 92.6 69.9
II 94.8 73.4
III 98.2 84.5
IV 99.0 83.3
Richest 98.6 93.6
COUNTY
Port-of-Spain 98.0 92.6
San Fernando 100.0 84.6
St. George 95.7 82.7
Caroni 97.0 74.4
Nariva 97.4 69.6
St. Andrew/St. David 95.9 70.7
Victoria 97.0 79.2
St. Patrick 92.9 75.5
Tobago 97.1 86.2
OVERALL 96.1 79.3
Note: Primary N=1068; Secondary N=583
136
Table 25: Percentage With At Least Secondary (7-Year) Schooling

Age groups
19-24 25-54 55-64
County
Port-of-Spain 84.6 48.9 55.0
St. George 74.6 50.1 24.3
Caroni 52.1 33.4 11.3
Nariva 40.0 31.6 14.3
St. Andrew/St. David 66.7 40.5 9.5
Victoria 67.8 40.4 15.5
St. Patrick 69.5 34.2 12.1
Tobago 69.6 39.0 18.8
Total 67.6 42.4 19.4
Table 26: Distribution of Health Indicators

Quintiles
I II III IV V Total
Percent ill in past month 3.7 5.3 6.1 7.7 6.7 5.9
Percent who visited health 50.0 75.8 79.0 79.2 77.1 74.4
facility (out of those ill)
Percent covered by Private 0.6 1.8 7.5 9.7 23.1 8.5
health insurance or Employee
Medical Plan
Percent of children 3 to 15 85.8 82.6 85.2 82.7 83.7 84.2
years who have received
Measles vaccine
Table 27: Health Care Utilization

Quintiles
I II III IV V Total
Type of facility visited:
Private 43.5 52.0 45.0 63.2 60.9 55.0
Public 56.5 48.0 55.0 36.8 39.1 45.0
Mean distance to facility (miles) 8.3 4.9 7.2 7.2 4.7 6.3
Mean time taken to reach facility 39.3 30.1 32.5 32.5 22.2 30.3
(minutes)
Mean travel cost 8.0 12.0 7.0 7.0 4.7 7.0
Mean medicine cost 19.8 46.5 60.6 60.2 291.6 107.5
Mean total consultation cost 35.0 70.0 85.0 115.0 397.0 158.0
137
Table 28: Children's Health Status Indicators: Inoculations

Quintiles
I II III IV V Total
Type of inoculation
Yellow Fever 79.7 86.2 88.6 88.5 92.5 85.9
Measles 83.9 93.1 88.6 91.8 90.6 89.0
Mumps 58.5 64.4 68.6 62.3 62.3 62.7
Rubella 65.8 62.7 60.2 71.1 65.8 64.7
DPT1 79.6 87.8 87.2 88.0 91.4 85.8
DPT2 78.4 81.0 84.2 71.2 91.0 80.7
DPT3 75.6 79.4 83.6 69.1 85.5 78.2
Note: The sample is restricted to children between 2 and 5 years for yellow fever, measles,
mumps, and rubella. For DPT1 children younger than 6 months were excluded. For DPT2
children younger than 12 months were excluded, and for DPT3 those younger than 18
months were excluded.
Table 29: Children's health status indicators

Quintiles
I II III IV V Total
Percent children < 5 years old whose 92.3 91.3 95.9 96.0 97.5 94.1
birth was registered
Percent children < 5 years old who 9.8 6.2 5.0 5.3 2.6 6.3
had diarrhea in past 2 weeks
Percent children (last births) whose 95.1 96.8 99.0 100.0 98.8 97.4
mother consulted health professional
at least 5 times during pregnancy
Percent children (last birth) whose 79.9 91.5 92.0 97.3 96.3 89.9
mother consulted a health
professional at least once or within 6
months of delivery
Table 30: Duration of Breastfeeding (Children 1 to 5 Years of Age)

Quintiles
I II III IV V Total
Less than 1 month 12.8 6.7 5.5 6.8 7.5 8.3
1 to 3 months 14.5 14.4 19.2 25.4 20.9 17.9
More than 3 months 53.9 54.8 52.1 44.1 41.8 50.5
Partial 10.3 9.6 15.1 10.2 17.9 12.1
Never 8.6 14.4 8.2 13.6 11.9 11.2
Note: Data is available for all children under 5 years of age, but these percentages are based on
children between 1 and 5. See text for explanation.
138
Table 31: School Types and Enrollment of the Secondary Level

Type #of Schools Percentage Enrolled Program
Traditional Schools 49 28 Academic
Govt, Forms 1-5 or 7 19
Assisted, Forms 1-5 or 7 30
New Sector Schools General ed. & craft Mixed
Junior Secondary (Forms 1-3) 24 43 general, & pre-technical.
Senior Comprehensive (Forms 4-5) 16 22 Mixed general & pre-technical
Senior Secondary Comprehensive (Forms 1-5 3
Composite (Forms 1-5) 9 7
Total 101 100
Source: Education Policy Paper, p. 50-51.
Table 32: Age Group and Enrollment by Quintile

Per Capita Expenditure Quintile
I II III IV V Country-wide
(Poorest) (Richest)
Ages 2-4
Pre-school 18 25 38 35 47 30
Primary 3 1 5 2 4 3
Ages 5-11
Pre-school 3 4 5 7 3 4
Primary 89 88 93 90 94 90
Govt. & assisted 88 87 90 85 78 87
Private 1 1 3 5 16 4
Junior Secondary 0 1 0 2 0 1
Ages 12-15
Primary 20 24 10 13 19 19
Govt. & assisted 20 23 19 12 17 18
Private 0 1 1 1 2 1
Vocational 3 3 1 1 0 2
Upper Secondary 21 31 38 43 58 35
Govt. & Assisted 13 11 24 26 46 21
Private 0 1 2 2 5 2
Senior Comprehensive 5 16 5 10 5 9
Composite 3 3 6 5 2 4
Other 0 3 0 0 0 0
Ages 16-19
Vocational 4 7 2 4 3 4
Youth camps, etc. 0 1 0 0 0 0
Senior Secondary 24 23 42 36 51 34
Govt. & assisted 4 7 20 12 19 12
Private 0 1 4 4 8 3
Senior Comprehensive 19 11 12 16 21 16
Composite 1 2 1 2 0 1
Technical Institutes 0 1 5 1 3 2
University 0 0 0 1 4 1
Other 0 0 2 5 1 1
139
Table 33: Secondary School Enrollment by Grade and Income Group (Percentage)
Upper Middle Lower Others a % of Number of
Level Level Level Total Students
Form 1 6 49 31 15 100 17,157
Form 2 6 48 30 15 100 17,008
Form 3 6 50 29 14 100 16,359
Form 4 7 51 27 15 100 14,123
Form 5 8 51 26 15 100 14,263
Lower 6 20 60 13 7 100 2,261
Upper 7 18 61 11 10 100 2,143
Source: Jules, 1994, Table 6. P. 37
a. The category, other, includes housepersons (homemakers), not applicable, and no response.
Table 34: Mean Days of Attendance and Reasons for Non-Attendance

Expenditure Quintiles
I II III IV V Country-wide
A: Mean Days of Attendance Per Week
Pre-school 4.4 4.5 4.2 4.6 4.7 4.5

Primary 4.4 4.6 4.6 4.7 4.7 4.6
Junior Secondary 3.9 4.5 4.7 4.5 2.9 4.3
Senior Secondary 4.3 4.4 4.5 4.5 4.6 4.5
Primary School B: Reasons for Non-attendance (Percentage)
Illness 14 17 22 28 15 18
Finance problem 23 3 11 3 0 11
Transport problem 17 0 0 0 0 6
Home duty 0 0 0 3 0 0
Not worth 4 0 2 3 10 3
Holiday 22 34 26 35 25 28
Baby sitting 0 2 0 0 0 0
Other 21 41 39 28 50 33
No answer 0 3 0 0 0 1
Absences 27 24 20 15 14 1
Total Students 100 100 100 100 100 100
N= 292 248 231 194 143 1108
Secondary School
Illness 12 6 10 26 7 13
Finance problem 15 22 0 0 0 8
Transport 3 0 0 0 0 1
Working 0 0 0 4 0 1
Not worth 0 17 5 7 0 5
Holiday 33 11 29 30 20 26
Pregnant 0 0 0 4 0 1
Other 37 44 57 30 73 45
Absences 27 16 16 21 16 20
Total Students 100 100 100 100 100 100
N= 123 113 128 127 96 587
140
Table 35: Means of Transportation (Percentage)

Expenditure Quintile
I II III IV V Total Number of
Respondents
Walking 64 50 40 35 21 44 798
Cycling 0 0 1 0 0 0 5
Maxi Cab 9 16 15 13 11 13 234
Taxi 17 15 20 25 21 19 353
Bus 3 5 4 1 2 3 52
Private 7 13 20 25 44 20 369
Others 0 1 1 0 0 0 6
No Answer 0 0 0 0 0 0 1
Total 100 100 100 100 100 100
N= 424 380 383 357 274 1,818
Table 36: Travel and Lunch Cost by Education Level (TT$)

Expenditure Quintile
I II III IV V
A: Mean Days of Attendance Per Week
Pre-school
Travel 1 .4 .9 1.1 1.2
Lunch .7 .5 .6 1.3 .5
Primary
Travel .7 .8 1.2 .9 1.1
Lunch .8 .5 .8 1.1 0.9
Junior Secondary
Travel 3.2 4.6 3.5 4.3 3.3
Lunch 1.7 1.3 2.5 2.3 2.7
Senior Secondary
Travel 4.1 5.7 4.5 4.2 4.0
Lunch 1.5 2.2 2.3 2.3 3.2
B: Annual Travel and Lunch Cost Based on 195 School Days
Pre-school 332 176 293 486 332
Primary 292 254 390 390 390
Junior Secondary 1,062 1,151 1,170 1,287 1,170
Senior Secondary 1,092 1,541 1,326 1,268 1,404
141
Table 37: Mean CEE Score for Entrance to Secondary School by School Type and Enrollment in
Secondary Schools by School Type and Family Income Level
Upper Middle Lower Others

Mean CEE Score Number of Income Income Income Number of
(out of 100) Students (%) (%) (%) (%) Students
Junior Secondary
A.M. Shift 54 13,554 2 43 37 19 13,684
P.M. Shift 53 12,645 2 42 36 20 12,866
Whole Day 60 4,573 4 48 37 10 4,624
Sr. Comprehensive 55 13,254 3 49 32 17 15,991
Composite 57 7,546 2 43 36 19 7,983
5-yr. Traditional 75 9,992 10 62 19 9 10,460
7-yr. Traditional 82 14,193 20 61 11 8 17,423
6th Form College - - 14 63 13 10 284
% of Total - - 7 50 29 15 83,315
Source: Jules, 1994, Tables 5 & 30, p. 36
Table 38: Family Income and Mean CEE Score of Intakes into Secondary Schools from Various
Years
Income Group 1992 intake 1991 intake 1990 intake 1989 intake 1988 intake
No employment 52 57 55 55 58
Low 55 58 59 57 60
Middle 63 67 67 65 68
High 76 78 80 78 78
Source: Jules, 1994, Table 50, p. 266-268
Table 39: Distribution of Mean CEE Examination (Percentage)

Income Group No
Score Quartile Upper Middle Lower Unemployed Response
1 (Lowest) 5 19 33 3 41
2 9 23 31 29 26
3 20 27 25 22 18
4 (Highest) 66 31 12 11 15
Number = 75,755
Source: Jules, 1994, Table 52, p. 271
Table 40: CXC Examination Scores at Exit of Secondary Education (Form 5), 1988
Pass Rate (Percentage)
School Type Total Male Female
Senior Comprehensive 75 75 78
Govt. Secondary 91 91 91
Assisted Secondary 96 96 99
Private Secondary 90 90 91
Source: Examination Results for Secondary and Tertiary Schools (1986-1988),
p.xii
142
Table 41: Teachers’ Qualification at the Secondary Level

Without Without Degree
University & Without Total # of
Degree on Pedagogical Teachers Pupil/Teacher
Subject Matter Training (%) Ratio
(%)
Junior Secondary 55 5 1,337 28
Senior/Comprehensive 39 27 1,546 15
Composite 54 31 351 20
Traditional Govt. 37 13 697 17
Traditional Assisted 17 7 908 20
Source: Report on Education Statistics, 1990-1991 p. 31, 34-36
*
Table 42: Labor Force Participation Rates (by Age)
Age Participation Rates
Total Male Female
15-20 32.1 40.7 23.2
21-25 70.1 85.8 52.7
26-30 77.4 94.4 59.9
31-40 80.6 94.9 65.1
41-50 73.3 94.1 50.3
51-60 63.2 83.8 41.9
61-65 30.4 41.4 18.5
65+ 15.0 20.1 9.3
Total 60.2 74.8 44.7
No. of Observations 4006 2072 1934
*Tables 42-81 use the Survey of Living Conditions, 1992.
Table 43: Labor Force Participation Rates (by Region)

Region Participation Rates
Total Male Female
Urban 63.1 72.4 53.9
Rural 58.0 76.4 37.1
Total 60.2 74.8 44.7
Table 44: Labor Force Participation Rates (by Race)

Race Participation Rates
Total Male Female
African 64.8 73.0 55.8
Indian 56.9 78.4 33.8
Other 59.2 68.7 49.4
Total 60.2 74.8 44.7
143
Table 45: Labor Force Participation Rates (by Highest Degree Obtained)
Education Participation Rates
Male Female
No degree obtained 77.9 36.6
School Leaving 80.5 44.6
CXC Basic 16.3 13.0
GCE (O) 1-2 91.0 66.1
GCE (O) 3-4 90.3 70.2
GCE (O) >5 90.9 77.2
GCE (A) 1-2 60.0 66.7
GCE (A) >3 100.0 75.0
Diploma 91.1 91.4
Degree 78.7 70.6
Other 68.2 45.4
Total 74.8 44.7
Table 46: Labor Force Participants and Household Size

No. of Participants Proportion of Households Proportion of Average
Heads Household
Participating Size
0 11.1 0.00 2.38
1 42.8 0.81 3.62
2 27.9 0.84 4.46
3 11.2 0.76 5.88
4 4.9 0.78 7.17
5 1.1 0.56 8.37
>5 0.9 1.00 10.20
Total 100.0 0.71 4.25
Table 47: Participation Probits (Males)

Variable Coefficient Standard Error
Intercept -0.621 0.451
Number of Children Aged:
Below 5 0.043 0.079
6-11 0.002 0.057
12-15 -0.170 0.038
Household Size 0.049 0.017
No. of Working Adults in HH -0.021 0.037
Experience 0.108 .009
Experience Squared -0.002 0.001
Spouse of HH Head Working 0.294 0.122
Urban -0.183 0.137
Years of Education 0.095 0.012
Household Head 0.829 0.135
Race:
Indian -0.038 0.086
Other -0.208* 0.104
Local Unemployment Rates -2.906 1.243
Local Wages 0.211 0.274
Household Non-Labor Income (*1000) 0.000 0.008
No. of Observations 2067

*
Significant at the 5% level
144
Table 48: Participation Probits (Females)

Intercept -1.140* 0.446
Below 5 -0.132* 0.062
6-11 -0.097* 0.048
12-15 -0.094* 0.036
Household Size 0.036* 0.016
No. of Working Adults in HH -0.097* 0.035
Experience 0.068* 0.007
Experience Squared -0.001* 0.000
Spouse of HH Head Working 1.160* 0.101
Urban 0.248* 0.129
Yrs. of Education 0.150* 0.011
Household Head 0.859* 0.108
Race:
Indian -0.485* 0.081
African -0.249* 0.096
Local Unemployment Rates -0.828 1.179
Local Wages -0.166 0.529
Household Non-Labor Income -0.000 0.000
(*1000)
*
Table 49: Percentage Employed in Different Sectors (by Gender)

Sector of Employment Percentage Employed
Total Male Female
Formal Sector
Public Sector
Statutory Boards 5.4 4.1 7.7
Parastatals 9.9 11.3 7.2
Central/State Government 19.1 18.7 19.7
Employees
Private Formal Sector 42.5 39.6 48.0
Informal Sector
Unpaid Worker 1.2 1.6 1.1
Learner Apprentice 1.8 2.6 0.2
Own Account 17.4 19.0 13.8
Informal Sector Employer 2.7 3.0 2.5
Total 100.0 100.0 100.0
Number of Observations 1925 1259 666
145
Table 50: Percentage of Household Heads Employed in Different Sectors (by Gender)
Sector of Employment Percentage Employed
Total Male Female
Formal Sector
Public Sector
Employees
Informal Sector
Own Account 21.4 21.5 19.4
Total 100.0 100.0 100.0
Number of Observations 914 764 150
Table 51: Occupation (by Gender)

Occupation Percentage Employed
Total Male Female
Legislators, Senior Officials and 5.0 5.7 3.8
Managers
Professionals 3.8 3.7 3.9
Technicians and Associate 9.5 6.6 14.9
Professionals
Clerks 12.4 5.6 25.3
Service Workers 13.0 11.3 16.1
Agricultural Workers 4.5 5.7 2.4
Craft and Related Workers 15.9 21.5 5.4
Plant Machine Operators and 10.7 15.4 1.8
Assemblers
Elementary Occupations 25.2 24.6 26.4
Total 100.0 100.0 100.0
146
Table 52: Occupation of Household Heads (by Gender)

Occupation Percentage Employed
Total Male Female
Legislators, Senior Officials and 7.5 8.1 4.0
Managers
Professionals 4.3 4.5 3.3
Technicians and Associate 8.7 7.5 14.7
Professionals
Clerks 6.8 5.2 14.7
Service Workers 10.3 10.1 11.3
Agricultural Workers 6.3 6.7 4.0
Craft and Related Workers 13.6 15.1 6.0
Plant Machine Operators and 15.8 18.5 2.0
Assemblers
Elementary Occupations 26.9 24.3 40.0
Total 100.0 100.0 100.0
Table 53: Occupation by Region and Gender

Occupation Total Males Females
Urban Rural Urban Rural Urban Rural
Legislators, Senior Officials and 5.1 4.9 6.7 5.0 3.0 4.7
Managers
Professionals 6.3 1.7 7.3 1.3 4.9 2.7
Technicians and Associate 10.3 8.8 7.9 5.7 13.5 16.7
Professionals
Clerks 14.5 10.8 5.7 5.5 26.4 24.0
Service Workers 13.5 12.5 12.0 10.8 15.7 16.7
Agricultural Workers 4.0 5.0 5.3 5.9 2.2 2.7
Craft and Related Workers 15.5 16.3 22.1 21.1 6.6 4.0
Plant Machine Operators and 8.2 12.7 13.2 16.8 1.4 2.3
Assemblers
Elementary Occupations 22.6 27.3 19.9 27.7 26.4 26.3
Total 100.0 100.0 100.0 100.0 100.0 100.0
No. of Observations 857 1057 493 757 364 300
147
Table 54: Industry (by Gender)

Industry Percentage Employed
Total Male Female
Agriculture 11.5 14.8 5.5
Petroleum and Gas 3.8 5.2 1.3
Mining and quarrying 0.1 0.1 0.1
Other Manufacturing 10.4 11.1 9.1
Electricity and Water 1.9 2.5 0.8
Construction 10.8 15.0 3.0
Trade, Restaurants and Hotels 17.1 13.1 24.6
Transport, Storage and 7.2 9.5 3.2
Communications
Financing, Insurance, Real Estate 7.2 5.6 9.9
Community, Social and Personal 30.0 23.2 42.6
Services
Total 100.0 100.0 100.0
Table 55: Household Workers (Sector of Work)

Sector of Work Number of Households Percentage of Average
Households Household Size
Households with 1 worker...
Public Sector 254 21.7 3.7
Private Sector 263 22.4 4.1
Informal Sector 152 13.0 3.9
Households with multiple workers...
All in Public Sector 77 6.6 5.2
All in Private Formal Sector 102 8.7 5.2
All in Informal Sector 35 3.0 5.1
Both in Public Sector and Private 135 11.5 5.4
Formal Sector
Both in Public Sector and Informal 53 4.5 5.4
Sector
Both in Private Formal and Informal 81 6.9 5.6
Sector
Workers in All Three Sectors 17 1.5 7.9
Total 1169 100.0 4.55
Note: The percentage of households with at least one worker was 78.6 percent and the percentage of households with
at least two workers was 33.6 percent (i.e. 500/1487). The overall average household size is 4.25.
148
Table 56: Hours Worked in Different Sectors (by Gender)

Sector of Employment Hours Worked
Total Male Female
Formal Sector
Public Sector
Employees
Informal Sector
Own Account 39.5 40.1 37.0
Total 39.8 40.3 38.8
Table 57: Monthly Wages on Primary Job in Different Sectors (by Gender)
Sector of Employment Average Monthly Wage
Total Male Female
Formal Sector
Public Sector
Statutory Boards 2486 2531 2444
Parastatals 2507 2528 2429
Central/State Government 2137 2120 2166
Employees
Private Formal Sector 1446 1655 1129
Informal Sector
Unpaid Worker NA NA NA
Learner Apprentice 211 215 120
Own Account 1005 1089 772
Informal Sector Employer 2210 2584 2066
Total 1660 1750 1500
149
Table 58: Monthly Wages on Primary Job in Different Sectors (by Region)
Sector of Employment Average Monthly Wage
Total Urban Rural
Formal Sector
Public Sector
Statutory Boards 2486 2787 2171
Parastatals 2507 2335 2625
Central/State Government 2137 2204 2097
Employees
Private Formal Sector 1446 1622 1278
Informal Sector
Unpaid Worker NA NA NA
Learner Apprentice 211 296 176
Own Account 1005 1072 969
Informal Sector Employer 2210 3781 2125
Total 1660 1790 1568
Table 59: Monthly Wages on Primary Job in Different Occupation (by Gender)
Occupation Average Monthly Wage
Total Male Female
Legislators, Senior Officials and 3130 3544 1950
Managers
Professionals 4926 5261 4325
Technicians and Associate 2769 3053 2547
Professionals
Clerks 1734 1784 1713
Service Workers 1356 1724 902
Agricultural Workers 866 977 354
Craft and Related Workers 1195 1241 852
Plant Machine Operators and 1708 1736 1183
Assemblers
Elementary Occupations 1016 1116 844
Total 1660 1750 1500
150
Table 60: Monthly Wages on Primary Job in Different Occupation (by Region)
Occupation Average Monthly Wage
Total Urban Rural
Legislators, Senior Officials and 3130 3748 2585
Managers
Professionals 4926 4945 4872
Technicians and Associate 2769 2601 2922
Professionals
Clerks 1734 1869 1593
Service Workers 1356 1221 1468
Agricultural Workers 866 830 886
Craft and Related Workers 1195 1246 1160
Plant Machine Operators and 1708 1464 1822
Assemblers
Elementary Occupations 1016 957 1050
Total 1660 1790 1568
Table 61: Monthly Earnings (by Highest Degree Obtained)

Education Male Female
No degree 1270 788
School Leaving 1769 1392
CXC Basic 877 872
GCE (O) 1-2 1509 1083
GCE (O) 3-4 1698 1307
GCE (O) >5 2790 1956
GCE (A) 1-2 2011 2690
GCE (A) >3 2242 2162
Diploma 2859 2740
Degree 5746 3531
Other 1600 1352
Total 1750 1500
Table 62: Unemployment Rates (by Age)

Unemployment Rates
Age Total Male Female
15-20 31.1 21.6 48.1
21-25 27.4 29.1 25.0
26-30 21.7 22.4 20.4
31-40 19.3 17.9 21.0
41-50 12.2 11.5 14.2
51-60 18.1 15.5 22.7
61-65 17.0 17.2 16.7
65+ 28.0 19.4 46.7
Total 20.8 19.0 23.4
151
Table 63: Unemployment Rates (by Race)

Unemployment Rates
Race Total Male Female
African 22.3 21.1 24.2
Indian 16.4 15.1 20.3
Other 26.9 27.0 26.9
Total 20.8 19.0 23.4
Table 64: Unemployment Rates (by Region)

Unemployment Rates
Region Total Male Female
Urban 21.8 20.5 22.9
Rural 19.7 18.2 24.0
Total 20.8 19.0 23.4
Table 65: Unemployment Rates (by Highest Degree Obtained)

Unemployment Rates
Education Male Female
No degree 22.9 28.5
School Leaving 17.9 16.2
CXC Basic 36.4 22.7
GCE (O) 1-2 15.4 34.6
GCE (O) 3-4 6.0 21.2
GCE (O) >5 14.3 16.7
GCE (A) 1-2 8.3 0.0
GCE (A) >3 12.5 0.0
Diploma 9.81 20.3
Degree 2.1 0.0
Other 18.0 22.0
Total 19.0 23.4
152
Table 66: Duration of Unemployment

Duration Proportion Unemployed
Total Male Female
< 3 months 29.1 35.4 20.8
>=3 months and < 6 months 13.2 14.5 10.4
>=24 months 25.2 18.2 35.6
Total 100.0 100.0 100.0
Table 67: Reasons for Underemployment: Proportion Voluntarily and Involuntarily Underemployed
Total Males Females
Voluntarily Involuntarily Voluntarily Involuntarily Voluntarily Involuntarily
Hours Under- Under- Under- Under- Under- Under-
Worked employed employed employed employed employed employed
<1 85.5 14.5 81.6 18.3 100.0 0.0
1-8 33.3 66.7 33.3 66.7 33.3 66.7
9-16 34.1 65.9 36.4 63.6 31.8 68.2
17-24 43.2 56.8 38.5 61.5 50.0 50.0
25-32 58.9 41.1 62.2 37.8 53.5 46.5
Total 53.9 46.1 55.6 44.4 51.4 48.6
Table 68: Unemployment Probits (Males)

Intercept -0.914* 0.070
Below 5 0.090 0.066
6-11 -0.095* 0.057
12-15 -0.032 0.047
Household Size 0.034* 0.020
No. of Working Adults in HH -0.192* 0.047
Experience -0.0179* 0.012
Experience* Squared 0.000 0.000
Spouse of HH Head Working -0.948* 0.188
Urban -0.237 0.150
Years of Education -0.068* 0.014
Household Head -0.556* 0.124
Race:
Indian -0.251* 0.095
Other Ethnic 0.229* 0.116
Local Unemployment Rates 0.799 1.392
Local Wages 0.672* 0.303

*
153
Table 69: Unemployment Probits (Females)

Intercept 2.116* 0.776
Below 5 0.288* 0.101
6-11 0.037 0.078
12-15 0.135* 0.060
Household Size -0.032 0.030
No. of Working Adults in HH -0.000 0.058
Experience -0.040* 0.013
Experience* Squared 0.001* 0.000
Spouse of HH Head Working -1.471* 0.176
Urban 0.357* 0.214
Years of Education -0.050* 0.016
Household Head -0.429* 0.150
Race:
Indian -0.275* 0.135
Other Ethnic 0.156 0.139
Local Unemployment Rates 0.611 1.938
Local Wages -1.109* 0.611
* Significant at the 5% level
154
Table 70: Earnings Functions (Males)
Variable Model 1 Model 2 Model 3

Intercept 2.610* 2.509* 3.423*
Log(Monthly Hours) 0.457* 0.428* 0.378*
Experience 0.088* 0.078* 0.068*
Experience*Experience -0.001* -0.000* -0.000*
Urban 0.003 0.018 0.006
Years of Education 0.129* 0.118* 0.092*
Race:
Indian -0.029 0.026 0.008
Other Ethnic 0.059 0.076 0.049
Local Unemployment Rates -0.522 -0.416 0.061
Local Wages 0.137 0.123 0.089
Sector of Work:
Public - 0.655* 0.674*
*
Private Formal - 0.417 0.385*
Occupation:
Senior Managers - - 0.071
Assoc. Professionals - - -0.127
Clerks - - -0.347*
Services - - -0.290*
Agriculture - - -0.707*
Crafts - - -0.490*
Operators (m/c) - - -0.142
Elementary -0.534*

R2 0.351 0.363 0.374
* Significant at the 5% level
Note: Standard Errors not reported
155
Table 71: Earnings Functions (Females)

Variable Model 1 Model 2 Model 3
Intercept 1.987* 2.276* 3.597*
Log(Monthly Hours) 0.611* 0.555* 0.511*
Experience 0.043* 0.033* 0.027*
Experience*Experience -0.001* -0.000* -0.000*
Urban -0.049 -0.029 -0.006
Years of Education 0.138* 0.112* 0.078*
Race:
Indian -0.110 0.004 -0.002
Other Ethnic 0.028 0.130 -0.112
Local Unemployment Rates -0.716 -0.891 -0.944
Local Wages 0.156 0.103 0.054
Sector of Work:
Public - 0.866* 0.743*
Private Formal - 0.343* 0.271*
Occupation:
Senior Managers - - -0.389
Assoc. Professionals - - -0.353*
Clerks - - -0.385*
Services - - -0.871*
Agriculture - - -1.337*
Crafts - - -0.811*
Operators (m/c) - - -0.411
Elementary - - -0.886*

R2 0.373 0.375 0.401
*
Note: Standard Errors not reported
156
Table 72: Household and Individual Characteristics by Quintile and Poor/Non-Poor

Per Capita Consumption Quintiles Poor/Non-Poor
Characteristics All T&T Q1 Q2 Q3 Q4 Q5 Poor Non-Poor
Household Level (HH)...
No. Of HH in sample 1487 204 235 289 312 413 219 1234
Urban (%) 44.11 49.01 37.02 44.29 39.10 47.21 48.40 42.62
Male Headed HH(%) 73.43 63.72 72.76 72.31 77.56 77.48 63.47 75.60
Age of HH Head 48.83 46.87 48.86 49.42 48.91 48.94 47.00 49.03
HH Size 4.25 6.09 5.25 4.33 3.97 3.02 6.09 3.95
No. of Children (<16) 1.38 2.49 1.82 1.34 1.10 0.63 2.44 1.13
No. of Workers/HH 1.30 1.17 1.25 1.24 1.41 1.38 1.16 1.33
No. of Unemployed/HH 0.45 0.82 0.68 0.43 0.35 0.21 0.81 0.38
Per Capita Expenditure 7250 1654 2992 4435 6630 14876 1702 8235
Individual Level...
Participation Rate (%) 60.2 57.1 56.4 56.0 61.1 68.5 56.4 61.1
Unemployment Rate (%) 20.4 36.2 28.9 20.2 14.6 10.0 36.0 17.1
Employed Individuals...
Sector of Work (%)
Public 34.3 20.8 29.3 27.1 38.8 44.0 20.6 36.6
Private Formal 42.5 51.3 43.8 48.9 39.7 36.3 50.0 41.3
Informal 23.1 28.0 26.9 23.9 21.5 19.7 29.4 22.1
Occupation (%)
Senior Professionals 5.0 1.3 2.1 2.8 4.6 10.0 1.2 5.7
Professionals 3.8 0.9 0.3 1.4 2.7 8.5 0.8 4.0
Associate Professionals 9.5 3.0 4.2 5.1 12.1 15.7 3.2 10.5
Clerks 12.4 6.4 9.4 9.6 13.5 17.6 6.8 13.4
Services 13.0 12.9 14.3 13.8 12.8 11.8 12.4 13.0
Agriculture 4.5 6.9 5.9 4.0 4.6 2.6 7.2 3.9
Crafts 15.9 22.3 20.2 19.8 13.5 10.0 21.7 14.8
Machine Operators 10.7 7.3 9.4 11.9 13.2 10.2 7.2 11.3
Elementary Occupations 25.2 39.1 34.1 31.6 23.1 13.6 39.4 23.4
Table 73: Household Characteristics by Quintile

Household Q1 Q2 Q3 Q4 Q5 Total
Characteristics
Number of Households 204 235 289 312 413 1453
Proportion of 14.0 16.2 19.9 21.5 28.4 100.0
Households
Household Head:
Female 19.4 16.7 21.0 18.4 24.4 100.0
Male 12.1 15.9 19.5 22.5 29.9 100.0
Race:
African 15.5 17.3 19.8 19.4 28.0 100.0
Indian 11.7 15.9 20.5 23.1 28.8 100.0
Other Ethnic 16.3 13.5 18.3 23.1 28.8 100.0
Region:
Urban 15.8 13.8 20.3 19.3 30.9 100.0
Rural 12.7 18.0 19.6 23.1 26.6 100.0
Household Head:
Not working 20.8 17.9 22.4 18.8 20.1 100.0
Working 10.0 15.3 18.5 23.4 33.9 100.0
157
Table 74: Household Labor Force Characteristics

Characteristics Q1 Q2 Q3 Q4 Q5
HH with 0 Participants..
Total Number 22 15 44 38 49
HH with 1 Participant..
Total Number 83 101 127 130 174
Proportion of HH with 1 E 44.6 67.3 78.0 82.3 87.9
Proportion of HH with 1 U 55.4 32.7 22.0 17.7 12.1
Total Number 43 68 62 93 130
Proportion of HH with 1 E 1 U 23.3 22.1 24.2 21.5 17.7
Notes: E - Employed
U - Unemployed
Table 75: Characteristics of Individual Labor Market Participants by Quintiles

Participants 57.1 56.4 56.0 61.1 68.5
Non-Participants 42.9 43.6 44.0 38.9 31.5
Total 100.0 100.0 100.0 100.0 100.0
Unemployed 36.2 32.6 21.8 16.3 10.3
Education:
None 75.1 69.6 62.8 56.8 40.4
Primary 18.4 17.4 23.0 21.2 17.4
Secondary 5.0 8.9 10.1 14.3 22.3
Tertiary 1.5 4.0 4.1 7.7 19.8
Total 100.0 100.0 100.0 100.0 100.0
Sector of Work:
Public 20.8 29.3 27.1 38.8 44.0
Private 51.3 43.8 48.9 39.7 36.3
Informal 27.9 26.9 24.0 21.5 19.7
Total 100.0 100.0 100.0 100.0 100.0
Occupation:
Senior Professionals 1.3 2.8 2.8 4.6 10.0
Professionals 0.9 1.4 1.4 2.7 8.5
Associate Professionals 3.0 5.1 5.1 12.1 15.7
Clerks 6.4 9.6 9.6 13.5 17.6
Services 12.9 13.8 13.8 12.8 11.8
Agriculture 6.9 4.0 4.0 4.6 2.6
Crafts 22.3 19.8 19.8 13.5 10.0
Machine Operators 7.3 11.9 11.9 13.2 10.2
Elementary Occupations 39.1 31.6 31.6 23.1 13.6
Total 100.0 100.0 100.0 100.0 100.0
158
Table 76: Characteristics of Individual Labor Market Participants by Quintiles (Males)

Participants 74.7 74.5 70.5 75.8 78.3
Total 100.0 100.0 100.0 100.0 100.0
Unemployed 35.1 26.6 18.1 11.6 8.5
Education:
None 79.0 73.4 67.4 59.2 43.3
Primary 16.2 16.3 19.2 22.0 17.7
Secondary 3.8 5.9 9.2 10.5 18.4
Tertiary 1.0 4.4 4.2 8.3 20.6
Total 100.0 100.0 100.0 100.0 100.0
Sector of Work:
Public 20.5 27.9 29.7 38.3 43.6
Private 46.2 42.8 43.2 39.0 32.9
Informal 33.3 29.4 27.1 22.8 23.5
Total 100.0 100.0 100.0 100.0 100.0
Occupation:
Professionals 0.6 0.5 1.7 2.8 8.2
Clerks 1.3 3.0 3.9 5.9 9.6
Services 9.8 12.6 9.9 12.4 10.8
Agriculture 8.5 7.6 4.3 5.2 4.3
Crafts 31.4 27.3 26.2 17.9 13.0
Total 100.0 100.0 100.0 100.0 100.0
Table 77: Characteristics of Individual Labor Market Participants by Quintiles (Females)

Participants 39.1 37.6 41.0 45.5 57.3
Total 100.0 100.0 100.0 100.0 100.0
Unemployed 38.4 33.6 23.9 20.0 12.2
Education:
None 71.6 65.8 58.5 54.4 37.5
Primary 20.3 18.6 26.6 20.4 17.2
Secondary 6.1 12.0 11.0 18.1 26.4
Tertiary 2.0 3.6 4.0 7.1 19.0
Total 100.0 100.0 100.0 100.0 100.0
Sector of Work:
Public 21.3 32.6 22.1 39.9 44.7
Private 61.3 46.1 59.8 41.2 41.9
Informal 17.5 21.4 18.0 18.9 13.5
Total 100.0 100.0 100.0 100.0 100.0
Occupation:
Professionals 1.3 0.0 0.8 2.7 8.8
Clerks 16.3 23.6 20.7 28.4 30.7
Services 18.8 18.0 21.5 13.5 13.5
Agriculture 3.8 2.3 3.3 3.4 0.0
Crafts 5.0 4.5 7.4 4.7 5.1
Total 100.0 100.0 100.0 100.0 100.0
159
Table 78: Characteristics of Individual Labor Market Participants Across Quintiles

Characteristics Q1 Q2 Q3 Q4 Q5 Total
Participants 15.6 17.3 18.6 21.7 26.7 100.0
Non-Participants 17.8 20.3 22.2 21.0 18.6 100.0
Unemployed 26.1 26.0 18.8 16.4 12.7 100.0
Education:
None 21.8 20.5 21.6 20.1 16.0 100.0
Primary 16.2 15.7 24.1 22.9 21.0 100.0
Secondary 6.8 12.3 16.2 23.6 41.2 100.0
Tertiary 3.2 8.7 10.4 20.1 57.6 100.0
Sector of Work:
Public 7.5 13.1 14.9 26.1 38.4 100.0
Private 15.1 15.8 21.8 21.7 25.7 100.0
Informal 15.1 17.9 19.7 21.6 25.7 100.0
Occupation:
Senior Professionals 3.1 6.3 10.4 20.8 59.4 100.0
Professionals 2.9 1.5 7.4 17.6 70.6 100.0
Associate Professionals 3.9 6.7 10.1 29.6 49.7 100.0
Clerks 6.4 11.5 14.5 25.1 42.6 100.0
Services 12.3 16.9 20.2 23.0 27.6 100.0
Agriculture 19.5 20.7 17.1 24.4 18.3 100.0
Crafts 17.6 19.6 23.6 19.9 19.3 100.0
Machine Operators 8.4 13.4 20.8 28.7 28.7 100.0
Table 79: Characteristics of Individual Labor Market Participants Across Quintiles (Males)
Participants 16.1 18.1 18.6 21.7 25.5 100.0
Unemployed 30.6 26.0 18.1 13.5 11.7 100.0
Education:
None 20.8 20.8 21.5 20.3 16.6 100.0
Primary 14.6 15.7 20.9 25.7 23.1 100.0
Secondary 6.2 10.3 18.0 22.2 43.3 100.0
Tertiary 1.9 9.3 9.9 21.0 58.0 100.0
Sector of Work:
Public 7.6 13.2 16.6 26.2 36.4 100.0
Private 14.7 17.6 20.9 23.1 23.7 100.0
Informal 16.1 18.2 19.8 20.4 25.6 100.0
Occupation:
Professionals 2.3 2.3 9.3 18.6 67.4 100.0
Associate Professionals 4.8 4.9 11.0 28.1 51.2 100.0
Clerks 2.9 8.8 13.2 25.0 50.0 100.0
Services 11.0 18.3 16.8 26.3 27.7 100.0
Agriculture 19.1 22.1 14.7 22.1 22.1 100.0
Crafts 18.4 20.7 23.4 19.9 17.6 100.0
160
Table 80: Characteristics of Individual Labor Market Participants Across Quintiles (Females)
Participants 14.7 15.8 18.7 21.8 29.0 100.0
Unemployed 24.2 22.7 19.2 18.7 15.2 100.0
Education:
None 22.8 20.2 21.7 19.9 15.3 100.0
Primary 17.7 15.7 27.0 20.5 19.2 100.0
Secondary 7.1 13.6 15.0 24.5 39.8 100.0
Tertiary 4.8 8.2 10.9 19.1 57.1 100.0
Sector of Work:
Public 7.5 12.7 11.8 25.9 42.1 100.0
Private 15.6 13.1 23.3 19.4 28.7 100.0
Informal 12.5 17.0 19.6 25.0 25.9 100.0
Occupation:
Professionals 4.0 0.0 4.0 16.0 76.0 100.0
Associate 3.1 8.3 9.3 30.9 48.5 100.0
Professionals
Clerks 7.8 12.6 15.0 25.2 39.5 100.0
Services 14.2 15.1 24.5 18.9 27.4 100.0
Agriculture 21.4 14.3 28.6 35.7 0.0 100.0
Crafts 11.4 11.4 25.7 20.0 31.4 100.0
Elementary 23.3 20.4 23.8 18.0 14.5 100.0
Occupations
161
Table 81: Poverty Simulations

Group Percent in Percent Total Cost Average Cost
Poverty as a moved out of (million $) per person
% of Total Poverty as a moved out of
Population % of Total Poverty ($)
Population
Poor Individuals 21.46 - - -
Poor Individuals living in HH 1.78 - - -
with no labor market participants
Poor Individuals living in HH 19.68 - - -
with at least one labor market
participant
To move all individuals out of 0.00 21.46 205.54 755
poverty
Proportion of Individuals 15.45 - - -

staying in HH with at least 1
employed member
Give each worker an annual
lump sum transfer of ...
$300 14.92 0.53 15.59 2318
$600 13.46 1.99 31.19 1234
$900 12.12 3.33 46.78 1109
$1200 11.43 4.02 62.38 1224
$1500 10.00 5.45 77.97 1128
Increase wages of workers by
10% 13.31 2.14 - -
20% 9.47 5.98 - -
Proportion of Individuals 11.40 - - -
staying in HH with at least 1
unemployed member
Introduce annual
unemployment benefits at ...
$300 11.06 0.34 10.88 2543
$600 10.55 0.85 21.77 2015
$900 9.12 2.28 32.65 1128
$1200 8.70 2.70 43.54 1271
$1500 7.96 3.44 54.43 1248
162
Table 82: Percentage Change in Real Weekly Earnings by Industry, 1982-93

Average Weekly
Earning
Industry 1993 1982-1993 1982-1988 1988-1993
Food Processing Industry:
Meat, poultry, and fish 377 -50.0 -22.3 -35.8
Dairy Products 823 -37.7 -26.4 -15.4
Fruit and vegetable processing 709 -11.9 10.2 -20.1
Grain and feedmills 600 -41.6 -6.8 -37.7
Edible oils and fats 998 -27.3 -10.5 -18.8
Bakeries 462 -22.2 -2.8 -26.6
All other food 466 -31.7 -7.3 -26.4
Drink and Tobacco:
Tobacco 1,164 -29.9 -16.6 -16.0
Alcoholic beverages 844 -40.0 -14.2 -30.0
Non-alcoholic beverages 410 -40.7 -21.8 -24.1
Textile Garments & Footwear:
Textiles and Garments 212 -54.8 -29.3 -36.0
Footwear 176 -72.3 -30.9 -40.0
Printing Publishing & Paper Converters:
Newspaper publishers 817 -25.5 9.1 -31.9
Printers 490 -33.7 -24.6 -12.0
Paper converters 445 -58.8 -34.5 -34.3
Wood Related Products:
Sawmills 211 -55.3 -46.3 -17.0
Furniture/mattresses 170 -72.0 -30.5 -59.7
Chemical & Non-Metallic Products
Industrial gases and paints 675 -22.0 18.6 -34.2
Pharmaceuticals, cosmetics, etc. 499 -16.6 23.8 -32.6
Clay brick 385 -67.1 -12.8 62.3
Cement 1,086 -20.8 1.9 -22.3
Concrete products 617 -35.2 -7.3 -30.2
Glass and plastic products for construction 982 -28.6 -5.5 -24.5
Petrochemicals 1,510 -19.7 4.9 -23.4
Assembly-Type & Related Industries:
Motor vehicles 705 -46.4 -45.1 -2.3
Batteries, mufflers and tires 587 -52.6 14.8 -58.7
Household appliances 448 -45.8 -4.9 -42.9
Ship and boat building and repairs 233 -82.1 -63.1 -51.6
Metal building materials 898 -7.5 39.1 -33.5
Metal containers 770 -47.4 -44.9 -0.5
Metal furniture 508 -65.3 -28.6 -34.4
Miscellaneous Manufacturing Industries 617 1.9 43.9 -29.8
Electricity 1,139 -14.9 -3.3 -11.9
Oil refining 1,102 -40.0 -15.6 -28.9
Sugar refining 636 -43.9 -23.0 -27.2
Source: Central Statistical Office. Economic Indicators, several issues.
163
THE WORLD BANK GROUP
ROUTING SLIP DATE: May 25, 1995
NAME ROOM. NO.

Mssrs./Mmes. Inside Region
Edwards (LACCE) (2); Abe, Crown, Hicks (LA3DR) I8459; I5015,I5009,I5003
Nouvel, Lewin, Demiraydin; HLStaff (LA3C2) I5187,I5195,I5194
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Mssrs./Mmes. Outside Region
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Title FirstNa LastNa JobTitl Compa Addres Addres City Countr
me me e ny s1 s2 y
The Basdeo Panday Prime Office Central Indepen Port Trinidad
Hono Minister of the Bank dence of &
rable Prime Tower, Square Spain Tobago
Minister Eric
William
s Plaza
The Wade Mark Minister (Public Central Indepen Port Trinidad
Hono in Adminis Bank dence of and
rable Office tration Tower, Square Spain Tobago
of the and Eric
Prime Informa William
Minister tion) s Plaza
The Ralph Maraj Minister Ministry Knowsl Queen's Port Trinidad
Hono of of ey Park of and
rable Foreing Foreign Building West Spain Tobago
Affairs Affairs
The Hamza Rafeeq Minister Ministry 10-12 Port Trinidad
Hono of of Indepen of and
rable Health Health dence Spain Tobago
Dr. Square
The Sadiq Baksh Minister Ministry Level 5, Frederic Port Trinidad
Hono of of Salvator k Street of and
rable Works Works i Spain Tobago
and and Building
Transpo Transpo
rt rt
The Pamela Nichols Minister Ministry Issa Duke Port Trinidad
Hono on of of Nichola and of and
rable Sports Sports s Frederic Spain Tobago
and and Building k Streets
Youth Youth
Affairs Affairs
The Ganga Singh Minister Ministry 16-18 Port Trinidad
Hono of of Sackvill of and
rable Public Public e Street Spain Tobago
Utilities Utilities
The Finbar Ganga Minister Ministry Level 9, Picadilly Port Trinidad
Hono of of Riversid and of and
rable Energy Energy e Plaza Basson Spain Tobago
and and Streets
Energy Energy
Industri Industri
es es
me me e ny s1 s2 y
The Jospeh Theodor Minister Ministry Knox Port Trinidad
Hono e of of Street of and
rable National National Spain Tobago
Col. Security Security
The Adesh Nanan Minister Ministry Alexand Port Trinidad
Hono of of er of and
rable Educati Educati Street, Spain Tobago
Dr. on on St. Clair
The Mervyn Assam Minister Ministry Eric Indepen Port Trinidad
Hono of of William dence of and
rable Trade, Trade, s Square Spain Tobago
Industry Industry Finance
and and Building
Consum Consum
mer mer
Affairs Affairs
The Harry Partap Minister Ministry Level Picadilly Port Trinidad
Hono of of 11, and of and
rable Labor Labor Riversid Besson Spain Tobago
and Co- and Co- e Plaza Streets
operativ operativ
es es
The Reeza Moham Minister Ministry St. Clair Port Trinidad
Hono med of of Circle, of and
rable Agricult Agricult St. Clair Spain Tobago
ure, ure
Land
and
Marine
Resourc
es
The Dhanraj Singh Minister Ministry Kent Port Trinidad
Hono of Local of Local House, of and
rable Govern Govern Maraval Spain Tobago
ment ment
The Manoha Ramsar Minister Ministry Level 1 Frederic Port Trinidad
Hono r an of of & 4, k Street of and
rable Social Social Salvator Spain Tobago
Develop Develop i
ment ment Building
The Daphne Phillips Minister and Algico Jerningh Port Trinidad
Hono of Women' Building am of and
rable Commu s Affairs Avenue Spain Tobago
me me e ny s1 s2 y
Dr. nity
Develop
ment,
Culture
The John Humphr Minister Ministry N.H.A. 44-46 Port Trinidad
Hono ey of of Building south of and
rable Housing Housing Quay Spain Tobago
and and
Settlem Settlem
ents ents
The Kamla Persad- Attorne Office Winsure 24-28 Port Trinidad
Hono Bissessa y of the Building Richmo of and
rable r General Attorne nd Spain Tobago
y Street
General
and
Ministry
of Legal
Affairs
The Honorable Basdeo Panday
Prime Minister The Honorable Wade Mark
Office of the Prime Minister Minister in Office of the Prime Minister
Central Bank Tower, Eric Williams Plaza (Public Administration and Information)
Independence Square Central Bank Tower, Eric Williams Plaza
Port of Spain, Trinidad & Tobago Independence Square
Port of Spain, Trinidad and Tobago
The Honorable Ralph Maraj The Honorable Dr. Hamza Rafeeq

Minister of Foreign Affairs Minister of Health
Ministry of Foreign Affairs Ministry of Health
Knowsley Building 10-12 Independence Square
Queen's Park West Port of Spain, Trinidad and Tobago
The Honorable Sadiq Baksh The Honorable Pamela Nicholson

Minister of Works and Transport Minister of Sports and Youth Affairs
Ministry of Works and Transport Ministry of Sports and Youth Affairs
Level 5, Salvatori Building Issa Nicholas Building
Frederick Street Duke and Frederick Streets
Port of Spain, Trinidad and Tobago Port of Spain, Trinidad and Tobago
The Honorable Ganga Singh The Honorable Finbar Ganga

Minister of Public Utilities Minister of Energy and Energy Industries
Ministry of Public Utilities Ministry of Energy and Energy Industries
16-18 Sackville Street Level 9, Riverside Plaza
Port of Spain, Trinidad and Tobago Picadilly and Basson Streets
The Honorable Col. Joseph Theodore The Honorable Dr. Adesh Nanan
Minister of National Security Minister of Education
Ministry of National Security Ministry of Education
Knox Street Alexander Street, St. Clair
The Honorable Mervyn Assam The Honorable Harry Partap
Minister of Trade, Industry and Consummer Affairs Minister of Labor and Co-operatives
Ministry of Trade, Industry and Consummer Affairs Ministry of Labor and Co-operatives
Eric Williams Finance Building Level 11, Riverside Plaza
Independence Square Picadilly and Besson Streets
The Honorable Reeza Mohammed The Honorable Dhanraj Singh

Minister of Agriculture, Land and Marine Resources Minister of Local Government
Ministry of Agriculture Ministry of Local Government
St. Clair Circle, St. Clair Kent House, Maraval
The Honorable Manohar Ramsaran The Honorable Dr. Daphne Phillips

Minister of Social Development Minister of Community Development, Culture
Ministry of Social Development and Women's Affairs
Level 1 & 4, Salvatori Building Algico Building
Frederick Street Jerningham Avenue
The Honorable John Humphrey The Honorable Kamla Persad-Bissessar

Minister of Housing and Settlements Attorney General
Ministry of Housing and Settlements Office of the Attorney General and Ministry of Legal
N.H.A. Building Affairs
44-46 South Quay Winsure Building
Port of Spain, Trinidad and Tobago 24-28 Richmond Street
The Honorable Col. Joseph Theodore

Minister of National Security
Ministry of National Security
Knox Street

Poverty and Unemployment in Oil Based Economy

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Report No.

Trinidad and Tobago

October 27, 1995

Country Department III

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distribution and may be used by

Equity and quality issues in the education system......................................................47

5 The social safety net....................................................................................................... 63

Why is there poverty and unemployment in Trinidad and Tobago?

What are the characteristics of poverty?

Do the poor have access to basic services?

What are the characteristics of the unemployed?

What can be done to address the problems of poverty and unemployment?

• Promoting Broad-Based Economic Growth. Overcoming the persistent

• Improving the Functioning of the Labor Market. To promote and

to the employer. As a result, employers should be more willing to assume risks

• Improving Quality and Equity in Education. The recently approved

• Promoting Health Reform. The current health sector reform appears to

3. In 1988, the Government of Trinidad and Tobago underwent an adjustment

4. It is difficult to measure the impact of these macroeconomic changes on the

Living standards today

Figure 1: Trends in Per Capita GDP and Unemployment

70 Per Capita GDP

9. The inequality in the distribution of welfare in Trinidad and Tobago is similar to

The characteristics of the poor

Table 1.1: Characteristics of poor households, 1992

Gender and family composition

19. Approximately one-quarter of households are headed by females with the

21. A final important finding regarding female-headed households (based on probit

23. The educational attainment of heads of household differed enormously by

Figure 2: Unemployment by Expenditure Group

Income and expenditure patterns

Housing, water and sewage

Crime and violence

33. The existence of crime can potentially be a deterrent to investment by imposing

Government policies and programs to reduce unemployment

Characteristics of the labor force

Labor force participation

45. A large number of households, approximately 12 percent, have no labor force

50. By occupational groupings, individuals employed as professionals earn the highest

Table 2.1: Characteristics of the labor force, 1992

Source: 1992 Survey of Living Conditions, N=4006 individuals.

Box 2.1: Women in the Labor Market

Unemployment and underemployment

57. Though long-term unemployment is not the dominant characteristic of the

Box 2.2: Characteristics of the Unemployed, 1992

• Unemployment rates are 20.8 percent--19.0 percent for males and

58. Underemployment is also prevalent in Trinidad and Tobago.49 Approximately 15

The institutional setting governing employment practices and industrial relations

The industrial relations act

The retrenchment and severance benefits act

Box 2.3 Retrenchment and Severance Schemes

Legal minimum wages

76. NUMBER OF MINIMUM WAGES. Currently, the industry-by-industry detailed

Wage determination: Institutional forces and markets

79. Institutional forces play a prominent role in the determination of wages in a

The industrial court

is relatively simple and non-intrusive. As a result, the administrative and judicial