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The linkages between formal and informal employment growth in Tunisia: a spatial simultaneous equations approach

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  • Mohamed Amara

    () (High Institute of Management of Sousse)

Abstract

Abstract This paper examines the links and interactions between the formal and informal employment growth as well as their determinants in 264 Tunisian delegations from 1996 to 2013. The empirical analysis based on non-spatial and spatial simultaneous equations models reveals that an increase in the informal employment growth in industry is positively associated with an increase in the formal employment at the same delegation, and vice versa. For the construction activities, the results show that the formal and informal sectors are opposite. With respect to agglomeration externalities, we find positive effects of local competition on employment growth for both formal and informal sectors. Furthermore, we find that formal employment is higher in delegations with higher average monthly wage and high levels of net migration.

Suggested Citation

  • Mohamed Amara, 2016. "The linkages between formal and informal employment growth in Tunisia: a spatial simultaneous equations approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 203-227, January.
  • Handle: RePEc:spr:anresc:v:56:y:2016:i:1:d:10.1007_s00168-015-0731-8
    DOI: 10.1007/s00168-015-0731-8
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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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