IMF Working Papers

The Macroeconomic Effects of Labor and Product Market Reforms in Morocco

Author/Editor:

Babacar Sarr ; Mokhtar Benlamine ; Zsuzsa Munkacsi

Publication Date:

October 11, 2019

Electronic Access:

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Summary:

This paper studies the macroeconomic effects and sequencing of (LMRs) and product (PMRs) market reforms in Morocco. It finds that introducing LMRs and PMRs simultaneously would add about 2.5 percentage points (pp) of GDP growth and reduce unemployment by about 2.2 pp after five years. If sequencing is required, starting with PMRs would be more effective in boosting output, while starting with LMRs would reduce unemployment faster. Finally, increasing unemployment benefits would be more effective if this reform takes place after the implementation of LMRs and PMRs.

Series:

Working Paper No. 19/222

Subject:

Access to Foreign markets Bankruptcy Banks Basket of currency peg Capital Capital accumulation Capital flows Capital formation Commodity markets Commodity prices Competition Consumption Corruption Cost of capital Credit Demand Development Development sector Economic conditions Economic growth Economic indicators Economic sectors Education Education spending Emerging markets Employment Employment policy Environment Equilibrium (Economics) Exchange rate regimes Exchange rate stability Export competitiveness Export diversification Exports External shocks Financial crises Financial inclusion Financial sector Fiscal consolidation Fiscal position Fiscal space Fiscal sustainability Gender General equilibrium models Global competitiveness Goods Gross domestic product Health Higher education Hiring Household consumption Human capital Hydrocarbons Imports Inclusive growth Income taxes Informal sector Insurance International reserves International trade International trade agreements Investment Job creation Labor Labor costs Labor demand Labor force Labor force participation Labor market flexibility Labor market institutions Labor market policy Labor market reforms Labor market regulations Labor markets Labor policy Labor productivity Legislation Lines of credit Loans Market economies Minimum wages Money National income Nonmetropolitan areas P Pensions Political economy Population Potential output Prices Private consumption Private investments Private sector Production Production functions Productivity Products Public debt Public sector Real wages Shadow economy Social assistance Social insurance Social safety nets Social security Stocks Tariffs Total factor productivity Trade liberalization Underemployment Unemployment Unemployment insurance Wages Women