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This book offers a comprehensive examination of the key labor market issues facing Tunisia, including the size, structure, and evolution of the labor force, employment and unemployment, wage formation, gender differences, education, and migration.
The weak economic performance and insufficient and low-quality job creation in Tunisia is primarily the result of an economic environment permeated by distortions, barriers to competition, and excessive red tape, including in the labor market.
This book discusses youth unemployment in post-revolutionary Tunisia, paying particular attention to the so-called skill mismatch. Youth unemployment was one of the major factors triggering the Tunisian revolution, and continues to be a central socio-economic challenge. The Tunisian labour market is marked by a strong increase of higher education graduates while the economic system is dominated by sectors mainly employing a less qualified labour force. This study investigates current labour market trends, and provides insights into the underlying causes of persisting high youth unemployment. The author argues that economic crisis, difficult political conditions since 2011, and inefficient labour market policies did not foster sufficient job creation, and that special attention needs to be paid to the educational causes of the skill mismatch in youth employment in future sustainable development models.
Tunisia has one of the highest unemployment rates within the Middle East and Central Asia. We look at the extent to which institutional factors explain those high unemployment levels. We also assess unemployment cyclicality, by looking at the determinants of labor market sensitivity to the output gap. We find that during the last decade the deterioration of institutional factors that affect labor demand explain not only about a quarter of the unemployment rate increase in Tunisia, but also Tunisia’s excess sensitivity of unemployment to the output gap. Our results suggest that an improved business environment and product market competition, increased labor market flexibility as well as reduced financial constraints and informality would help reduce Tunisia’s unemployment.
In spite of the Government's commitment to social development, with employment resting at the heart of Tunisia's Tenth Development Plan, the recent economic slowdown however, hampers expectations on meeting the employment goals of the Plan. Output growth would have to increase significantly in light of unchanged employment elasticity, to create enough jobs to absorb the increasing labor force. However, the Tunisian private sector has not played a dynamic role in terms of job creation: small and medium scale enterprises (SMEs), are mainly concentrated in the traditional manufacturing sectors, with low value-added; enterprise restructuring has not occurred, mainly due to an economic growth that has not led to enough reallocation of resources, despite the unexploited productivity gains in respect to reallocation of labor to high productivity sector; and, the high unemployment rates among educated youth, reflect gaps between skills in demand by employers, and skills offered by job seekers. Within this context, this report proposes broad policy options to help improve the country's employment strategy over the medium term. Several reforms - liberalization of the product markets, improvement of investment climate, and reforms in education and vocational training - have been implemented to improve labor market performance. The overall employment strategy needs to be based on the fundamentals of sound economic policies that promote competitive product markets, and private-sector-led growth, particularly in service industries. This will require an investment climate, and a favorable business environment, particularly for SME development, to promote both employment and productivity growth in high value-added sectors. Notwithstanding, investment policies should provide a better balance between utilization of capital and labor. And, regardless of its engagement to investments in human resources, Tunisia should ensure that ongoing reforms in education, and vocational training focus on market needs. Finally, labor market regulations and institutions need to be flexible, so as to adjust to changes in business conditions. This approach requires a more effective social protection system, through efficient active labor market programs and, perhaps, through income support for laid-off workers.