## Labor Market Dynamics in Oman: Oman

_Selected Issues Papers, April 15, 2025_

## Source details

**Canonical URL:** [Labor Market Dynamics in Oman: Oman](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/14/labor-market-dynamics-in-oman-oman-566110)

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## Bibliographic details
- Authors: Bilal Tabti, Haytem Troug
- Published: April 15, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229008174.018

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### Summary findings
- The prevalent strong preference for public sector employment among young Omanis, coupled with demographic pressures and medium-term fiscal sustainability objectives amid economic diversification away from hydrocarbons, underscores the urgency to pivot towards a more dynamic private sector that attracts Omanis towards private sector jobs.
- The note highlights distinct segmentation and limited mobility in Oman's labor market, which disincentivized upskilling and impeded sectoral labor reallocation.
- Comprehensive reforms are needed to narrow the public-private wage gap, boost private sector employment for nationals, and elevate overall productivity.
- Implementing these measures is pivotal for Oman to realize its Vision 2040 objectives, transitioning towards a knowledge-based economy, and achieving sustainable nonhydrocarbon growth.

### Key drivers and structural features
- Strong preference for public sector employment among young Omanis.
- Demographic pressures affecting labor supply and employment demand.
- Economic diversification away from hydrocarbons creating medium-term fiscal sustainability objectives.
- Labor market segmentation and limited mobility that disincentivized upskilling and impeded sectoral labor reallocation.
- Low female labor market participation identified as an area for improvement.
- Mobility of expatriate workers cited as an element to be enhanced to support adjustment.

### Policy recommendations
- Narrow the public-private wage gap by aligning wages with productivity.
- Improve vocational training to support upskilling and labor reallocation.
- Foster female labor market participation to expand the national labor pool.
- Enhance labor market mobility for expatriate workers to improve adjustment and allocation.
- Pursue comprehensive reforms to boost private sector employment for nationals and elevate overall productivity as part of advancing Vision 2040.

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## Content in this bundle

- **Labor Market Dynamics in Oman; Oman; IMF Selected Issues Paper No. 2025/034; December 18, 2024**
  - [Labor Market Dynamics in Oman; Oman; IMF Selected Issues Paper No. 2025/034; December 18, 2024 (Markdown version)](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025034.pdf.md){rel="alternate" type="text/markdown"}
  - [Labor Market Dynamics in Oman; Oman; IMF Selected Issues Paper No. 2025/034; December 18, 2024 (PDF)](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025034.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/14/labor-market-dynamics-in-oman-oman-566110_