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Labor markets and economic growth in the MENA region

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  • Marie-Ange VEGANZONES-VAROUDAKIS

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

  • PISSARIDES

Abstract

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.

Suggested Citation

  • Marie-Ange VEGANZONES-VAROUDAKIS & PISSARIDES, 2005. "Labor markets and economic growth in the MENA region," Working Papers 200535, CERDI.
  • Handle: RePEc:cdi:wpaper:850
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    Cited by:

    1. Laabas, Belkacem & Weshah, Razzak, 2011. "Economic Growth and The Quality of Human Capital," MPRA Paper 28727, University Library of Munich, Germany.
    2. Dioikitopoulos, Evangelos & Turnovsky, Stephen & Wendner, Ronald, 2017. "Dynamic Status Effects, Savings, and Income Inequality," MPRA Paper 81005, University Library of Munich, Germany.
    3. Stepan Jurajda & Katherine Terrell, 2001. "What Drives the Speed of Job Reallocation during Episodes of Massive Adjustment?," CERGE-EI Working Papers wp170, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    4. Isabelle Terraz, 2016. "Economic Growth: The Case of Irreversibility of Investment with Bargaining Power of Workers," International Economic Journal, Taylor & Francis Journals, vol. 30(1), pages 75-86, March.
    5. Binzel, Christine & Carvalho, Jean-Paul, 2013. "Education, Social Mobility and Religious Movements: A Theory of the Islamic Revival in Egypt," IZA Discussion Papers 7259, Institute for the Study of Labor (IZA).
    6. Dalila Nicet-Chenaf & Eric Rougier, 2009. "Human capital and structural change: how do they interact with each other in growth?," Post-Print hal-00389040, HAL.
    7. Hagos, Fitsum, 2008. "Water supply and sanitation (WSS) and poverty: micro-level linkages in Ethiopia," IWMI Working Papers H041794, International Water Management Institute.
    8. repec:rss:jnljef:v3i2p3 is not listed on IDEAS
    9. Jean-Paul Carvalho, 2009. "A Theory of the Islamic Revival," Economics Series Working Papers 424, University of Oxford, Department of Economics.

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