Sectoral shifts, diversification, regional unemployment on the eve of revolution in Tunisia : a sequential spatial panel approach

Abstract EN

This paper investigates how sectoral shifts and industry specialization patterns have influenced Tunisian labor market performance in the recent past years.

Building on a sequential spatial framework, while taking into account spatial dependencies and externalities, our empirical investigation highlights that sectoral shifts and congestion effects induced by labor-supply growth exert a negative impact on unemployment dynamics.

Our results suggest that some Marshallian externalities manage to soften, and even reverse, the diversification induced effect on unemployment.

Moreover, we report high spatial dependence, which evidences a higher degree of contagion.

Additionally, negative spillovers of sectoral shifts contrast with positive spillovers of specialization pattern, initial unemployment rate, labor-supply growth and the excess labor demand growth rate.

Finally, the revolution had a detrimental effect on unemployment growth, except in the center-west region where unemployment was an inevitable result of an inner-process.