INTRODUCTION

Georgia's post-pandemic recovery has been marked by strong macroeconomic performance, with real GDP surpassing pre-pandemic trends and labor market indicators showing notable improvement. However, this research note examines whether this recovery reflects genuine structural transformation or masks deeper challenges of labor market polarization. Drawing on labor force survey data and a novel skill-level decomposition of employment based on occupational task content, the study finds that recent employment growth has been disproportionately concentrated in low-skill service sectors, while the share of medium-skill jobs is declining and high-skill job creation remains limited. A decomposition analysis reveals that the expansion of low-skilled employment is primarily driven by sectoral reallocation rather than changes of skills composition within sectors. The findings point to an increasingly polarized labor market, raising concerns about the sustainability and inclusiveness of Georgia’s growth model. The note concludes that without targeted efforts to support skill development, productivity upgrading, and inclusive labor market participation, Georgia risks entrenching structural stagnation beneath a surface of rapid economic expansion.

For the complete paper, please refer to the attached research note (above).