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The Macroeconomic Effects of Labor and Product Market Reforms in Morocco

Author

Listed:
  • Babacar Sarr
  • Mokhtar Benlamine
  • Zsuzsa Munkacsi

Abstract

This paper studies the macroeconomic effects and sequencing of (LMRs) and product (PMRs) market reforms in Morocco. It finds that introducing LMRs and PMRs simultaneously would add about 2.5 percentage points (pp) of GDP growth and reduce unemployment by about 2.2 pp after five years. If sequencing is required, starting with PMRs would be more effective in boosting output, while starting with LMRs would reduce unemployment faster. Finally, increasing unemployment benefits would be more effective if this reform takes place after the implementation of LMRs and PMRs.

Suggested Citation

  • Babacar Sarr & Mokhtar Benlamine & Zsuzsa Munkacsi, 2019. "The Macroeconomic Effects of Labor and Product Market Reforms in Morocco," IMF Working Papers 19/222, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:19/222
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    Keywords

    Access to foreign markets; Bankruptcy; Banks; Basket of currency peg; Capital; Capital accumulation; Capital flows; Capital formation; Commodity markets; Commodity prices; Competition; Consumption; Corruption; Cost of capital; Credit; Demand; Development; Development sector; Economic conditions; Economic growth; Economic indicators; Economic sectors; Education; Education spending; Emerging markets; Employment; Employment policy; Environment; Equilibrium (Economics); Exchange rate regimes; Exchange rate stability; Export competitiveness; Export diversification; Exports; External shocks; Financial crises; Financial inclusion; Financial sector; Fiscal consolidation; Fiscal position; Fiscal space; Fiscal sustainability; Gender; General equilibrium models; Global competitiveness; Goods; Gross domestic product; Health; Higher education; Hiring; Household consumption; Human capital; Hydrocarbons; Imports; Inclusive growth; Income taxes; Informal sector; Insurance; International reserves; International trade; International trade agreements; Investment; Job creation; Labor; Labor costs; Labor demand; Labor force; Labor force participation; Labor market flexibility; Labor market institutions; Labor market policy; Labor market reforms; Labor market regulations; Labor markets; Labor policy; Labor productivity; Legislation; Lines of credit; Loans; Market economies; Minimum wages; Money; National income; Nonmetropolitan areas; Pensions; Political economy; Population; Potential output; Poverty; Price stabilization; Prices; Private consumption; Private investments; Private sector; Production; Production functions; Productivity; Products; Public debt; Public sector; Real wages; Shadow economy; Social assistance; Social insurance; Social safety nets; Social security; Stocks; Tariffs; Total factor productivity; Trade liberalization; Underemployment; Unemployment; Unemployment insurance; Wages; Women; structural reforms; growth; hiring costs; firms’ entry costs; informal economy; small-open economy; Morocco; WP; entry cost; unemployment benefit; structural reform; Moroccan economy; informal unit;

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