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Making Sense of Arab Labor Markets: The Enduring Legacy of Dualism

  • Assaad, Ragui

    ()

    (University of Minnesota)

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    It is well-established that Arab labor markets share certain common characteristics, including an oversized public sector, high unemployment for educated youth, weak private sector dependent on government welfare for their survival, rapid growth in educational attainment, but much of it focused on the pursuit of formal credentials rather than productive skills, and low and stagnant female labor force participation rates. I argue in this paper that all of these features can be explained by the deep and persistent dualism that characterizes Arab labor markets as a result of the use of labor markets by Arab regimes as tool of political appeasement in the context of the "authoritarian bargain" social contract that they have struck with their citizens in the post-independence period. Even as fiscal crises have long destabilized these arrangements in most non-oil Arab countries, culminating in the dramatic political upheavals of the Arab spring revolutions, the enduring legacy of dualism will continue to strongly shape the production and deployment of human capital in Arab economies for some time. This will undoubtedly pose serious challenges to any efforts to transform these economies into dynamic, rapidly growing and more equitable globally competitive economies.

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    File URL: http://ftp.iza.org/dp7573.pdf
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    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7573.

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    Length: 39 pages
    Date of creation: Aug 2013
    Date of revision:
    Publication status: published in: IZA Journal of Labor & Development, 2014, 3:6
    Handle: RePEc:iza:izadps:dp7573
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    1. Filipe R. Campante & Davin Chor, 2012. "Why Was the Arab World Poised for Revolution? Schooling, Economic Opportunities, and the Arab Spring," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 167-88, Spring.
    2. Robinson, James A & Torvik, Ragnar & Verdier, Thierry, 2002. "Political Foundations of the Resource Curse," CEPR Discussion Papers 3422, C.E.P.R. Discussion Papers.
    3. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    4. Ghazal Bayanpourtehrani & Kevin Sylwester, 2013. "Female Labour Force Participation And Religion: A Cross-Country Analysis," Bulletin of Economic Research, Wiley Blackwell, vol. 65(2), pages 107-133, 04.
    5. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
    6. Martin Baldwin-Edwards, 2011. "Labour immigration and labour markets in the GCC countries: national patterns and trends," LSE Research Online Documents on Economics 55239, London School of Economics and Political Science, LSE Library.
    7. repec:cup:cbooks:9780521113182 is not listed on IDEAS
    8. World Bank, 2004. "Gender and Development in the Middle East and North Africa : Women in the Public Sphere," World Bank Publications, The World Bank, number 15036.
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