1. Some unemployment patterns in the Mediterranean region
Yacine BELARBI
Senior researcher
CREAD
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

2. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
Aims
Analyze the difference in unemployment tendencies between the countries of the Mediterranean region.
We observe nine countries taken between 2008 and the countries are Algeria, Egypt, Morocco and Tunisia from the South and France, Greece, Italy, Portugal and Spain from the North.
We discuss the correlations of the unemployment with growth, level of education, youth, FDI, market institutions and the educated female participation
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

3. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
First Observation
In the South side : the economies are Heterogeneous in term of development capacities and industrial structure
From the North side : the development gape is important and the convergence process between the south and the north seems to be very slow (or simply absent)
Following the geographical structure, the risks are common to all countries of the region and their costs have to be equitably shared
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

4. Unemployment and Economic Growth
In South Europe Countries Unemployment is 6 time more sensible to variation in GDP growth than it is in North African countries
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

5. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
The relatively weak tradeoff between economic growth and unemployment in the south part of the region can be explained by :
A slow response in output to global demand increases,
ineffective fiscal policy generally because of contradictory macroeconomic goals (Exp. unemployment and high inflation)
rural–urban migrants in the labor market,
inappropriate technology to the the underdevelopment economic conditions. Because less labor-intensive technologies.
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

6. Unemployment and the Level of education
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

7. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
High unemployment among the educated because the major employer of educated workers is the public sector, where wage structure adjust slowly
The potentiality to create high qualified jobs is limited because of the limited industrial structure
Generally, educated peoples wait for well-paid jobs rather than accept an immediate job that pays less.
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

8. Unemployment and Youth
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

9. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
Unemployed Youth rate is more important that the total unemployment rate in all the region because :
1. Financial crisis exacerbated the youth unemployment specially for Greece and Spain.
2. Skills mismatch : because of skills, young experiencing a difficult school-to-work transition, and businesses are unable to find suitable candidates for their positions.
3. Lack of entrepreneurship education: because school curriculums neglecting entrepreneurial training
4. Lack of access to capital: Young people who want to make their own jobs by starting businesses often struggle to find access to affordable loans. The World Bank notes that <1% of loan portfolios of loan providers are directed at those under the age of 30.
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

10. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
Unemployment and FDI
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

11. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
FDI provide capital for productive investments, foster economic growth, create jobs, contribute to the economy via technology and productivity spillovers and improvements in production and competitiveness.
Many empirical studies found an negative impact of FDI on unemployment in emerging market economies
What about their effect on unemployment in the South countries of the Mediterranean region
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

12. Unemployment and labor market efficiency
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

13. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
Economic theory suggests that rigid labor markets will have higher unemployment rates.
Increases in the flexibility of labor market regulations and institutions have a negative impact both on the level and the change of unemployment outcomes (i.e., total, youth, and long-term unemployment).
Employment protection should be designed not to inhibit job creation and labor reallocation.
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

14. Labor Female participation
We know that historically, Labor Female participation is positively and strongly associated with educational attainment.
In the MENA region, the changing composition of the female population towards higher education levels did not induce a strong increase in female participation rate.
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

15. Average Years of Schooling by Year of Birth and Sex
The gender gap in education has essentially closed in all four countries
Average Years of Schooling by Year of Birth and Sex
Tunisia
Algeria
Egypt
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
Source: Algeria 2010, Egypt: ELMPS 2012, Jordan: JLMPS 2010, Tunisia: TLMPS 2014

16. Female Labor Force Participation Ages, 15-64 (percentage)
Very weak increases in labor force participation
Female Labor Force Participation Ages, (percentage)
Algeria
Egypt
Tunisia
Source: Egypt: CAPMAS, Labor Force Survey, Jordan : DoS, Employment and Unemployment Survey, Tunisia: INS, Labor Force Survey, Algeria: ONS, Labor Force Survey.
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

17. MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018
Relationship between participation and educational attainment is weakening for women
Educated women are facing a much more adverse labor market due to the decline in public sector employment
Married women are more affected because of the inappropriate environment they face in the private sector
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018

18. To Conclude, Some Questions
How can the north contribute to improve the positive externality effects on the south economies trough :
Stimulate growth to generate more employment
Involve more FDI participation in the modernization of the industrial sectors and the technological transfers.
Improve the quality of institutions for more flexible labor market
Create a Mediterranean home market effect
MedThink Forum Dialogue 5+5 Algiers, 25, 26 and 27 June 2018