Labor market in Timor-Leste

The 2022 Census measured the labor force as people aged 15 and over who were working or seeking work. Its employment-to-population ratio was 34.9%, and the unemployment rate was 2.9%. Men had a labor-force participation rate of 41.9% and an employment-to-population ratio of 40.7%; the corresponding figures for women were 29.7% and 28.8%. Participation among young people was 16.7%. In 2025, 30.5% of people aged 15 to 24 were not in employment, education or training, commonly abbreviated as NEET. The 2021 Labor Force Survey reported lower participation of 30.5%, employment of 28.9%, unemployment of 5.1% and labor underutilization of 28.9%. Its methods and definitions are not directly comparable with the 2022 Census, so the figures should not be treated as one continuous series. Agriculture, forestry and fishing employ the largest number of people. Among people aged 25 to 54, wholesale and retail trade accounted for 21.8% of employment. Manufacturing, construction and mining each accounted for no more than 2.2% in the reported age groups. In 2021, cereals represented 15.2% of recorded activities, non-specialized food retail 12.9%, public administration 10.3%, vegetables, melons, roots and tubers 6.0%, and building construction 5.8%. These figures show a labor market centred on primary production, small-scale trade and public employment rather than a broad industrial base. Work arrangements are also uneven. The 2022 Census recorded self-employment for 65% of workers. Among people aged 25 to 54, employees represented 27.3% of women and 43.4% of men. The 2021 survey classified 48.3% of workers as wage employees, 35.1% as own-account workers and 15.3% as contributing family workers. Women were more exposed to vulnerable work: the rate was 67.3% for women overall and 75.3% for women in rural areas. The survey estimated that 38.6% of all workers were in the informal sector, including 45.7% of women, 33.9% of men and 55.3% of young workers. Informal-sector employment was reported for 53.1% of workers with primary education or less and 8.2% of workers with tertiary education. A separate measure found that 93.6% of agricultural employment, 71.8% of industrial employment and 36.3% of service employment was outside the formal sector; these measures use different definitions and are not interchangeable. Location strongly affects access to work. The employment-to-population ratio was at least 40% in Liquica and Oe-Cusse but below 30% in Lautem and Ermera. In rural areas, 400,446 people, or 71.4% of the rural population aged 15 and over, were outside the labor force. Around 80% of people aged 15 and over had always lived in the same Suco, which indicates limited movement between municipalities for work. Non-petroleum business employment reached about 66,000 jobs in 2024, 27.6% more than in 2021, but more than 80% of these jobs were in Dili, especially in retail and construction. Average wages in Dili were about 2.5 times higher than in other municipalities. Education is a major dividing line. In 2022, 54.9% of the working-age population had completed primary education or less, and 85.5% had completed lower secondary education or less. Women were more likely than men to have no schooling, at 33.7% compared with 28.8%. In rural areas, 38.6% had no schooling and only 0.6% had a bachelor's degree or higher. At least 87.5% of people with disabilities had not completed primary education. In the 2021 labor force, people with less than primary education or no schooling represented 30.7%, while people with tertiary education represented 16.8%. Formal training and job-matching services exist but do not cover the whole country evenly. The Secretary of State for Vocational Training and Employment Policy, known as SEFOPE, oversees employment policy, training and labor migration. Training providers and institutions include CNEFP Tibar, CNFP Becora and SENAI. INDMO develops competency standards and manages certification. FEFOP supports vocational and entrepreneurship training, partnerships involving micro-credit, on-the-job training and first-job assistance. Eligibility depends on the individual program; no reliable nationwide cost or duration applies to all programs. Community-based and employer-based informal training remains a functional pathway where formal provision is limited. SEFOPE's SIMUWEB and Centro de Informacao do Mercado de Trabalho support job matching. Employers can submit vacancies, shortlist applicants and conduct interviews. Job seekers can create profiles, prepare a CV, apply for jobs and register for training. Complaints about discrimination can be made through the relevant system, but published information does not establish nationwide online access, standard fees or common application deadlines. There is also no reliable evidence of a fully nationwide network of municipal employment guidance centres. Pay varies considerably by location, sector and work arrangement. The national minimum wage is reported as USD 115 per month for the private sector, with the same amount applying to public service. Labour Code No. 4/2012 provided for government wage setting and a review every two years, but a more recent nationwide re-setting is not evidenced in the available research. The reported real median monthly wage was USD 185 in 2021, compared with USD 238 in 2013, while nominal wages increased by about 3% between 2021 and 2024. No reliable nationwide sector-by-sector wage table is available. Labour Code No. 4/2012 covers working conditions, occupational risks and related employment matters. SEFOPE and the General Labour Inspectorate, or IGT, handle labour oversight and can support inspection, mediation, conciliation and arbitration. Law No. 12/2016 established contributory social security through INSS from 2017. Employers must register and submit monthly remuneration declarations. Enforcement is more limited in informal work, where written arrangements, social-security registration and inspection may not operate in the same way as in formal employment. Public employment remains a major part of the formal economy. About 73% of paid employment was in the public sector in 2021, and public employment accounted for most formal jobs. Private-sector recovery since then has been strongest in services, construction and retail. Low productivity, concentrated growth in Dili, limited finance, uncertain land tenure, logistics constraints and regulation restrict wider expansion. Diversification opportunities include agriculture, tourism, digital services and private firms. Timor-Leste's ASEAN and WTO integration may broaden market and skills opportunities over time, but access will depend on training, business capacity and recognition of qualifications. Overseas employment provides additional pathways through SEFOPE-linked channels, including Australia's PALM scheme, South Korean labor schemes and Portugal's labor-mobility arrangements with a Social Security Convention. A typical pathway involves selection or intermediation, a visa and work permit, pre-departure training, legal and social support, worker protection, and possible return and reintegration assistance. Research from 2024 found weaknesses in skills recognition and the ability of the domestic economy to absorb returning or newly trained workers. In 2026, the government set a goal of placing 10,000 Timorese workers in Australia by 2028. The Australia–Timor-Leste Labour Mobility and Skills Partnership includes about USD 50 million over four years, a recruitment and training centre in Dili, English training and Australian-recognised qualifications. Costs, eligibility and processing times remain specific to each program. INETL produces labor-market statistics, including the Census, Labor Force Survey and business activity statistics. The Ministry of Finance has a statistical-governance role. SEFOPE, IGT, INDMO, FEFOP, SERVE and INSS have distinct responsibilities for employment policy, inspection, qualifications, training finance, business registration and social security. Private companies and households provide much of the labor demand. These responsibilities do not form a single centralized system, so the relevant institution depends on whether the question concerns training, a vacancy, certification, business registration, labor rights, social security or migration.