The survey of the Iraqi workforce, carried out by the UN's Office for the Coordination of Humanitarian Affairs, has found that 43 per cent of those in work are now employed in government jobs.
This proportion is double the level recorded in 2005, and the report suggests it is hindering the development of a diverse jobs market in Iraq.
At the same time, full-time employment in the private sector - which is critical as the country attempts to rebuild its economy - has dropped to 17 per cent from 25 per cent.
OCHA says that the fall in oil prices since last summer means government coffers cannot sustain this level of public sector employment.
"In a climate of financial constraint caused by the drop in oil prices, public sector salaries and pensions (constituting 35 percent of planned expenditure in 2009) will strain the government budget," it says.
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