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Labor markets and economic growth in the MENA region

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Author Info

  • Marie-Ange VEGANZONES-VAROUDAKIS

    ()
    (Centre d'Etudes et de Recherches sur le Développement International)

  • PISSARIDES

Abstract

The labor market plays an important role in economic development through its impact on the acquisition and deployment of skills. This paper argues that countries in the MENA region failed to deploy human capital efficiently despite high levels of education because of a large public sector which has distorted incentives and because of excessive regulation in the private sector. The education system is geared to the needs of the public sector so the acquired skills are inappropriate for growth-enhancing activities. Excessive regulation of the private sector further removes the incentives for employers to recruit and train good workers. As a result, MENA countries found it difficult to adapt to new conditions in the 1990s and their rate of productivity growth fell to very low levels. The group as a whole failed to keep up with countries that used to be at a comparable level of development, such as East and South-East Asia.

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File URL: http://publi.cerdi.org/ed/2005/2005.35.pdf
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Bibliographic Info

Paper provided by CERDI in its series Working Papers with number 200535.

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Length: 21
Date of creation: 2005
Date of revision:
Handle: RePEc:cdi:wpaper:850

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Cited by:
  1. Stepan Jurajda & Katherine Terrell, 2002. "What Drives the Speed of Job Reallocation During Episodes of Massive Adjustment?," William Davidson Institute Working Papers Series 432, William Davidson Institute at the University of Michigan.
  2. Dalila NICET – CHENAF (GREThA UMR CNRS 5113) & Eric ROUGIER (GREThA UMR CNRS 5113), 2009. "Human capital and structural change: how do they interact with each other in growth?," Cahiers du GREThA 2009-14, Groupe de Recherche en Economie Théorique et Appliquée.
  3. Jean-Paul Carvalho, 2009. "A Theory of the Islamic Revival," Economics Series Working Papers 424, University of Oxford, Department of Economics.
  4. Binzel, Christine & Carvalho, Jean-Paul, 2013. "Education, Social Mobility and Religious Movements: A Theory of the Islamic Revival in Egypt," IZA Discussion Papers 7259, Institute for the Study of Labor (IZA).
  5. Laabas, Belkacem & Weshah, Razzak, 2011. "Economic Growth and The Quality of Human Capital," MPRA Paper 28727, University Library of Munich, Germany.

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