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Labor market policies and unemployment in Morocco : a quantitative analysis

Author

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  • Agenor, Pierre-Richard
  • Aynaoui, Karim El

Abstract

The authors study the impact of labor market policies on unemployment in Morocco. They begin by reviewing the main features of the labor market. Then they present a quantitative framework that captures many of these features-such as a large public sector, high redundancy payments, powerful trade unions, and international labor migration. The authors simulate the impact of a cut in the minimum wage and a reduction in payroll taxation. The results indicate that these policies may have a significant impact in the short term on open unskilled unemployment. But they also show that labor market reforms, to be effective in the long run, may need to be accompanied by offsetting changes in the budget to avoid crowding-out effects on private investment.

Suggested Citation

  • Agenor, Pierre-Richard & Aynaoui, Karim El, 2003. "Labor market policies and unemployment in Morocco : a quantitative analysis," Policy Research Working Paper Series 3091, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3091
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    References listed on IDEAS

    as
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    7. AGENOR Pierre-Richard & IZQUIERDO Alejandro & FOFACK Hippolyte, 2010. "IMMPA: A Quantitative Macroeconomic Framework for the Analysis of Poverty Reduction Strategies," EcoMod2003 330700003, EcoMod.
    8. Dewatripont, Mathias & Michel, Gilles, 1987. "On closure rules, homogeneity and dynamics in applied general equilibrium models," Journal of Development Economics, Elsevier, vol. 26(1), pages 65-76, June.
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    10. AGENOR Pierre-Richard & FERNANDES Reynaldo & HADDAD Eduardo & VAN DER MENSBRUGGHE Dominique, 2010. "Analyzing the Impact of Adjustment Policies on the Poor: An IMMPA Framework for Brazil," EcoMod2003 330700002, EcoMod.
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    Full references (including those not matched with items on IDEAS)

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