Tatyana Bogomolova, Gregorio Impavido, Montserrat Pallares-Miralles rates. Survivors are modeled in an aggregated fashion as a fixed percentage of the total covered population.

# **Modeling changes in the number of active employees**

Changes in the number of active employees over time are modeled with the use of the “flow” method described in APPENDIX D. Under this method, an exogenous growth rate for the total number of employees is assumed, as well as the gender and age distribution of new employees joining the pension system. Subsequently, for each year of the simulation period, projections for the number of employees in each age and gender cohort based on these assumptions, as well as on the assumed mortality and retirement rates. Currently the number of civil servants is about 0.3% of the Uganda population while the number of teachers is about 0.6%. For the medium term assumptions regarding the recruitment policy (until 2014/15), we used recruitment projections contained in MPS (2005). This document discusses the pay reform policy (PRP) of 2001, analyzes the progress made in implementing it, and projects average wages and number of civil servants and teachers within a framework of the pay reform proposal. The assumptions on the growth of the total number of employed for the medium-term are summarized in the Table 19.

**Table 19: Medium term active population growth assumptions**

|**Year**|**2004/05 2**|**005/06 **|**2006/07 **|**2007/08 **|**2008/09 **|**2009/10 **|**2010/11**|**2011/12 **|**2012/13 **|**2013/14 **|**2014/15**|
|---|---|---|---|---|---|---|---|---|---|---|---|
|Government|70.3|69.7|70.0|70.2|70.5|70.8|71.0|71.2|71.3|71.5|71.7|
|Tecahers|144.0|146.5|149.1|151.7|154.2|156.8|159.3|161.9|164.5|167.0|170.8|
|Total|214.3|216.2|219.1|221.9|224.7|227.6|230.3|233.1|235.8|238.5|242.5|
|Growth rate - Government|0.91%|-0.91%|0.39%|0.39%|0.39%|0.39%|0.26%|0.26%|0.26%|0.26%|0.26%|
|Growth rate - Teachers|1.81%|1.78%|1.75%|1.72%|1.69%|1.66%|1.63%|1.61%|1.58%|1.56%|1.50%|
|Populationgrowth rate|2.55%|2.49%|2.46%|2.42%|2.39%|2.36%|2.34%|2.31%|2.29%|2.26%|2.24%|

**Source** : PROST projections based on MPS (2005) growth rates.

Compared to other countries, the size of civil service in Uganda is rather small relative to its population. For example, in neighboring Kenya central and local government civil servants account for around 1% of population while teachers account for another 1%. In Africa the average share of central civil servants (only) in population is 1.1%, in Asia – also 1.1%; it’s higher in Latin America – 1.5%, and even more high in OECD countries – 1.9% (Palacios and Whitehouse 2005). Indeed a thorough benchmarking of the size of the Uganda civil service population would require comparing whether countries have a centralized or decentralized governments. Nevertheless, the comparison with Kenya (country with similar administrative structure and size of informal labor market) suggests that the size of the Uganda civil servant population is small. Based on this information, it was assumed that in the long run the share of each group – civil servants and teachers – will gradually increase to around 1% of the population by around 2050 and will grow in line with population thereafter. Compared to the observed trend around the world, this is a conservative assumption. The projected growth of the total number of active employees in each of the sub-schemes is plotted in Figure 39.

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