Why Is Tunisia’s Unemployment So High? Evidence From Policy Factors
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Summary:
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.
Series:
Working Paper No. 2023/219
Subject:
Employment protection Labor Labor market regulations Labor markets Unemployment Unemployment rate
Frequency:
regular
English
Publication Date:
October 27, 2023
ISBN/ISSN:
9798400257025/1018-5941
Stock No:
WPIEA2023219
Format:
Paper
Pages:
39
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