Understanding unemployment in the arab countries : towards a policy framework

Abstract EN

The paper uses a sample of five Arab countries (namely Algeria, Egypt, Jordan, Morocco and Tunisia) in a dataset covering the period from 1990 to 2006.

Two-stage least squares methodology is used to find estimates of growth and human capital variables from a search of deeper instruments, and fitted values from these regressions are then used in a second-stage estimation of unemployment behaviour in the general population and separately for men.

Results suggest that while growth, by itself, does tend to achieve significant reduction in unemployment, the lack of sustainability of growth works in the opposite direction raising unemployment so that the net effect is rather modest.

Moreover, while educational contribution to lowering of unemployment is likely to be of a modest magnitude for all, the labour market appears to strongly discriminate against women’s skills.

Rising longevity appears to predict rising unemployment via participation which would call for faster job creation in order to meet the growing aspirations of the public.