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This paper applies a search matching model with firing restrictions to examine whether the existence of firing restrictions affects the outcome of the matching process and the natural rate of unemployment in Tunisia. The paper concludes that the removal of firing restrictions is likely to produce a favorable but limited impact on unemployment in Tunisia.
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.
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.
The Tunisian Labor Market in an Era of Transition is a comprehensive examination of the central labor market issues facing this key Arab country. It includes contributions on the size, structure, and evolution of the labor force, the characteristics of labor demand, employment policies and regulations, and unemployment. Further chapters explore the wage formation process, gender differences in the labor market, the returns to education, child labor and schooling, and the trends and patterns of international migration from Tunisia. The Tunisian Labor Market in an Era of Transition is an essential reference on how youth employment, gender disparities, and informality contributed to political and social unrest in North African societies, and on the effect of migration flows from North Africa to Europe.
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.
The findings of the existing literature on the relationship between employment protection legislation and the unemployment rate are mixed. This thesis analyzes the relationship between employment protection legislation measured by the OECD Employment Protection Index and the unemployment rate between 2001 and 2008. After controlling country fixed effects, I find that more stringent employment protection legislation may not be a significant factor for higher a unemployment rate. The estimated model included output gap, government size, openness of the economy, real minimum wages, urbanization rate, population density, population, unemployment benefit generosity, and tax wedge as explanatory variables. I find that the output gap, as a measure of business cycle, and government size are significant factors determining the unemployment rate in selected 15 OECD countries. These findings suggest that employment protection legislation, especially in developed countries, may not be affective policy instrument for policy makers when combating unemployment.