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Unemployment Insurance: Bahrain

Providing unemployment insurance for national and foreign workers, and first-time Bahraini job seekers

June 4, 2023
Author: Rabab Hteit

In 2006, Bahrain adopted its first unemployment insurance scheme, which provides unemployment protection for national and foreign workers in the public and private sectors, and for unemployed youth that are first-time job seekers. The programme has been hailed for reducing inequality of access to unemployment protection between nationals and migrant workers (who made up 63 percent of the workforce in 20201 and amongst unemployed youth (who constituted 7 percent of the youth labor force in 2021).

The unemployment insurance provides two types of reimbursements: a “compensation benefit” to nationals and foreign workers who lose their job, and an “unemployment aid benefit” to Bahraini first-time job seekers. The compensation benefit is particularly novel in that it covers migrant workers, who make up 63 percent of the Bahraini workforce and were not previously insured for unemployment. The unemployment aid benefit is also unique in that it provides monetary assistance to combat youth unemployment.

The compensation benefit provides the national/foreign worker with a monthly payment equivalent to 60 percent of their previous wage, with a minimum monthly payment of BD 200 (USD 530) and a maximum of BD 1,000 (USD 2,650), for a maximum period of nine months. Workers can apply for the benefit on multiple occasions, so long as they have worked in between each application. For the worker to benefit from the compensation, they must be registered in the General Organization of Social Insurance (GOSI) for at least 12 months, have not been laid-off for disciplinary issues, not have voluntarily resigned, and have a legal residency (for expatriates).2

The unemployment aid benefit, entitles first-time unemployed Bahraini job seekers (or those who have been employed for less than one year and so would consequently not qualify for the compensation benefit) to a monthly stipend of BD 200 (USD 530) if they hold a degree, or BD 150 (USD 398) if not. Stipends are paid for a maximum of six months in any 12-month period. Beneficiaries must undertake training programs provided by the Ministry of Labour (MoL) to qualify for the benefit. The training programs are then paired with job-matching suggestions and the Ministry of Labour matches youth with employment opportunities. Beneficiaries lose access to the unemployment aid benefit if they refuse the second job offer provided by the Ministry of Labour without a rational justification, i.e., if one is overqualified for the job, or having to travel a long distance to the workplace.3


Bahrain first tabled unemployment insurance in 2001 under its Decent Work Program.4 In 2006, supported by the International Labour Organization (ILO) and using the results of the 2004 labour force survey and an actuarial study,5 the Labour Law was amended and unemployment insurance was introduced through legislative decree number 78 of the Labour Law.6

The unemployment insurance schemes are managed by the Ministry of Labour and the General Organization of Social Insurance. The Ministry of Labour is responsible for the acceptance of applications, training applicants, and matching job seekers with vacancies, while the GOSI is responsible for collecting and disbursing funds. A coordination committee, consisting of representatives from both the Ministry of Labour and the GOSI, was established to implement the unemployment insurance scheme and ensure effective coordination between the agencies.7


The combined unemployment insurance schemes are funded by a one percent levy on employee wages, which is matched separately by the employer and by the Government of Bahrain for a total contribution of three percent.8

For 2020, the unemployment insurance fund received BD 78.6 million (USD 208.3 million) in contributions, and paid out BD 26.8 million (USD 71 million) in benefits. The net assets of the fund reached BD 508.7 million (USD 1.3 billion) by December 31, 2020.9


The ILO praised Bahrain’s unemployment insurance as a pioneer scheme in the Middle East and Arab Region.10 It has successfully protected workers from economic shocks and reduced access to unemployment protection inequalities, particularly for migrant workers by including them in the protection scheme.11

By the end of 2022, there were 29,000 registered beneficiaries of unemployment insurance, and 10,000 beneficiaries of training programs.12 With a 5.5 percent13 unemployment rate in Bahrain, the unemployment insurance would be covering 36 percent of the unemployed. Bahrain’s unemployment insurance played a role in protecting workers against large job losses amidst the economic downturn and movement restrictions during COVID-19. Between 2019 and 2021, there were 41,897 unemployment insurance beneficiaries and 24,344 young people were matched with jobs. 14

The unemployment aid benefit has not contributed towards reduced youth unemployment as hoped, as Bahrain has experienced (in line with the wider Arab Region) mass population growth and limited job creation. However, youth unemployment in Bahrain is relatively low (seven percent in 2021) compared to the Arab region (26 percent in 2021), which can likely be in part attributed to the unemployment aid benefit, particularly the training and job matching conditions provided by the Ministry of Labour.15

Not all Bahrainis are happy that unemployment insurance covers both national and foreign workers. During COVID-19, the government was forced to delete a twitter post that detailed its unemployment benefits for foreign workers amidst xenophobic backlash. This had no material impact on the policy, but has required the Government to visibly prioritize Bahraini citizens’ benefits in public posts.16