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Young Gazelles and Aging Turtles: Understanding the Determinants of Employment Creation in the Labor Market in MENA Countries

Author

Listed:
  • Hassan Aly

    (Nile University)

  • Yousef Daoud
  • Amr Ragab
  • Ayhab Saad

Abstract

The Middle East region has suffered from major unemployment problems that constituted a chief determinant for the Arab Spring. Even during its best economic years, “jobless growth” was an issue. Thus, creating employment, in the private sector, is always on the top priority of all governments in the region. However, the success of increasing employment in the private sector requires an understanding of the factors and conditions necessary for private firms to create jobs. This paper tries to tackle this issue by shedding lights on some of determinants of job growth within firms across the region. This study is one of few that used firm-level data from the World Enterprise Surveys (WES), conducted by the World Bank, to analyze the labor market demand in the MENA region. As such, the study applies a two-part strategy: 1) a detailed statistical analysis of characteristics of each firm group, and 2) an econometric estimation using multinomial logit regressions to determine the significant drivers of job growth in each group. We then apply the appropriate robustness checks. One of the major study result indicates that governments would benefit from focusing on supporting new and young firms that are medium to large-sized with existing investments in R&D. The results, also, indicates that investment in R&D or NM is positively related to job creation. Finally, the study encourages new research of more factors that may be contributing to job creation such as labor market regulations; political activeness; access to foreign markets; practice of social responsibility and political corruption.

Suggested Citation

  • Hassan Aly & Yousef Daoud & Amr Ragab & Ayhab Saad, 2017. "Young Gazelles and Aging Turtles: Understanding the Determinants of Employment Creation in the Labor Market in MENA Countries," Working Papers 1121, Economic Research Forum, revised 07 2017.
    • Handle: RePEc:erg:wpaper:1121
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    Cited by:

    1. Hassan Arouri & Adel Ben Youssef & Francesco Quatraro & Marco Vivarelli, 2020. "Drivers of growth in Tunisia: young firms vs incumbents," Small Business Economics, Springer, vol. 54(1), pages 323-340, January.
    2. Hany Abdel-Latif & Hassan Aly, 2019. "Are politically connected firms turtles or gazelles? Evidence from the Egyptian uprising," Working Papers 1304, Economic Research Forum, revised 2019.
    3. Ayhab Saad, 2018. "The exceptional performance of exporters: Evidence from Egyptian ?rms," Working Papers 1208, Economic Research Forum, revised 12 Jun 2018.

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