International Labor Mobility and Employment Interactions in Tunisia

This paper analyzes the international labor mobility-employment nexus in Tunisia in a dynamic general equilibrium framework. The main innovations of the model consist in endogenizing the migration decision, its duration and the remittance rate. Labor demand is disaggregated by sector, skill and age. The production of skills and labor supply are also endogenous. A retrospective simulation shows that the high increase in the unemployment rate induced by the global crisis and the Tunisian revolution can be decomposed in labor demand and labor supply effects. Moreover, an increase of service exports intensive in Mode 4 activities could have a positive impact, particularly on the high skilled and thus reduce brain drain. However it benefits more to the non youth than to young workers. Finally, policies meant to attract skilled emigrants will also benefit low skilled domestic workers.