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Labor markets and economic growth in the MENA region

Listed author(s):
  • Marie-Ange VEGANZONES-VAROUDAKIS

    ()

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • PISSARIDES

The labor market plays an important role in economic development through its impact on the acquisition and deployment of skills. This paper argues that countries in the MENA region failed to deploy human capital efficiently despite high levels of education because of a large public sector which has distorted incentives and because of excessive regulation in the private sector. The education system is geared to the needs of the public sector so the acquired skills are inappropriate for growth-enhancing activities. Excessive regulation of the private sector further removes the incentives for employers to recruit and train good workers. As a result, MENA countries found it difficult to adapt to new conditions in the 1990s and their rate of productivity growth fell to very low levels. The group as a whole failed to keep up with countries that used to be at a comparable level of development, such as East and South-East Asia.

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File URL: http://publi.cerdi.org/ed/2005/2005.35.pdf
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Paper provided by CERDI in its series Working Papers with number 200535.

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Length: 21
Date of creation: 2005
Handle: RePEc:cdi:wpaper:850
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  1. anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2,4-6.
  2. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
  3. Luis A. Rivera-Batiz & Paul M. Romer, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 531-555.
  4. Alvaro Forteza & Martín Rama, 2000. "Labor Market "Rigidity" and the Success of Economic Reforms Across more than One Hundred Countries," Documentos de Trabajo (working papers) 0600, Department of Economics - dECON.
  5. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
  6. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
  7. World Bank, 2004. "Unlocking the Employment Potential in the Middle East and North Africa : Toward a New Social Contract," World Bank Publications, The World Bank, number 15011, December.
  8. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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