Labor market reforms, growth, and unemployment in labor-exporting countries in the Middle East and North Africa
Yousef, Tarik | Jensen, Henning Tarp | Agenor, Pierre-Richard | Nabli, Mustapha K.
This paper studies the impact of labor market policies on growth and unemployment in labor-exporting countries in the Middle East and North Africa. The analysis is based on a framework that captures many of the main features of the labor market in these countries. We conduct a variety of policy experiments, including a reduction in payroll taxation, cuts in public sector wages and employment, an increase in employment subsidies, a reduction in trade unions' bargaining power, and a composite reform program. Our key message is that to foster broad-based growth and job creation in the region, labor market reforms must not be viewed in isolation but rather as a component of a comprehensive program of structural reforms.
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