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The Labor Mobility-Employment Nexus: A General Equilibrium Analysis for Jordan

Author

Listed:
  • Anda David

    (PSL Université Paris Dauphine)

  • Mohamed Ali Marouani

    (Paris1-Pantheon-Sorbonne University)

Abstract

The global crisis had a negative impact on growth and unemployment in Jordan and this effect is likely to persist in the coming years. Besides, Jordan is a significant migrant sending country, thus providing an interesting context within which to investigate the interactions between international labor mobility and domestic labor market outcomes. The crisis scenario shows that the rise in unemployment is due to a simultaneous increase of labor supply, induced by lower transfers and a decrease in labor demand. Emigration decreases at the beginning of the period, but rebounds once the Gulf countries recover from the global crisis. The counterfactual increase of service exports has a positive impact on GDP growth and on aggregate unemployment. Emigration decreases, mainly for high skilled workers. The increase of receiving countries’ wages has a positive impact on unemployment reduction and wages. The effects are channeled through increased migration incentives and higher remittances which lower the pressure on the local labor market, mainly through higher emigration and a lower labor participation rate. When the wage increases are limited to highly skilled workers, the observed reduction of unemployment and the wage increase for high skilled workers is much higher than in the previous scenario. However, low and medium skilled workers’ unemployment levels increase. Finally, education transitions are significantly increased by the higher wage premium.

Suggested Citation

  • Anda David & Mohamed Ali Marouani, 2013. "The Labor Mobility-Employment Nexus: A General Equilibrium Analysis for Jordan," Working Papers 824, Economic Research Forum, revised Dec 2013.
    • Handle: RePEc:erg:wpaper:824
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    References listed on IDEAS

    as
    1. Omar Feraboli & Tim Trimborn, 2008. "Trade Liberalization and Income Distribution: A CGE Model for Jordan," International Trade and Finance Association Conference Papers 1117, International Trade and Finance Association.
    2. Mona Amer, 2012. "The School-to-Work Transition of Jordanian Youth," Working Papers 686, Economic Research Forum, revised 2012.
    3. Gordon H. Hanson, 2009. "The Economic Consequences of the International Migration of Labor," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 179-208, May.
    4. Ragui Assaad, 2012. "The Structure and Evolution of Employment in Jordan," Working Papers 674, Economic Research Forum, revised 2012.
    5. Michel Beine & Fréderic Docquier & Hillel Rapoport, 2008. "Brain Drain and Human Capital Formation in Developing Countries: Winners and Losers," Economic Journal, Royal Economic Society, vol. 118(528), pages 631-652, April.
    6. Sekkat, Khalid, 2010. "Arab Economic Integration: Missing links," CEPR Discussion Papers 7807, C.E.P.R. Discussion Papers.
    7. World Bank, 2008. "Jordan - Resolving Jordan's Labor Market Paradox of Concurrent Economic Growth and High Unemployment," World Bank Publications - Reports 18907, The World Bank Group.
    8. Jad Chaaban & Wael Mansour, 2012. "The Impact of Remittances on Education in Jordan, Syria and Lebanon," Working Papers 684, Economic Research Forum, revised 2012.
    9. Jackline Wahba, 2012. "Immigration, Emigration and the Labor Market in Jordan," Working Papers 671, Economic Research Forum, revised 2012.
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    Cited by:

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    2. Vladimir Hlasny & Shireen AlAzzawi, 2020. "Return Migration and Earnings Mobility in Egypt, Jordan and Tunisia," Working Papers 562, ECINEQ, Society for the Study of Economic Inequality.

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