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Labor Market and Growth in Morocco


  • Lahcen ACHY

    (INSEA, Rabat, Morocco)


The purpose of this paper is to investigate how the functioning of the labor market in Morocco is affecting economic growth. The first section examines the demographic factors affecting the supply side of the labor market such as the population growth, the pace of urbanization, and the increase of female labor force participation over the last decades. These three demographic factors, although dealt with jointly, don’t have the same effects on the labor market conditions and may be connected to economic growth through different channels. The second section explores the potential distorting effects of policy choices undertaken by policy makers in Morocco over the last four decades. For a long time, the government provided much more incentives to capital intensive investment at the extent of labor intensive technologies, which distorted the allocation of resources and crowded out the abundant labor force. As a consequence, formal sector has not crated enough job opportunities while survival activities in the informal sector have expanded very rapidly. The third section investigates the educational system as the main mechanism through which human capital is accumulated. As in Lucas-Uzawa framework, human capital is accumulated endogenously as a result of individual optimal investment decisions on the basis of the expected returns on the labor market. One of the key issues is the increasing rate of graduates unemployed. Does this mean that educational system is not adequately responding to the needs of the productive system? Or that the productive system is still underdeveloped to absorb all the available skilled labor supplied on the marketplace. The fourth section of the paper examines the contribution of the public sector to employment and the nature of qualifications required by public sector jobs. The public sector wage bill in Morocco is excessive and tends to put constantly pressure on the government budget, which threatens macroeconomic stability and restrains growth prospects. The fifth section presents briefly the labor market regulation in Morocco and the extent to which they are effectively enforced. It attempts to assess the extent to which the existence of minimum wage has protected the purchasing power of workers. It also deals with the impact of existing regulations imposed to the formal sector on the expansion of a large informal sector.

Suggested Citation

  • Lahcen ACHY, 2005. "Labor Market and Growth in Morocco," Labor and Demography 0512007, EconWPA.
  • Handle: RePEc:wpa:wuwpla:0512007
    Note: Type of Document - pdf; pages: 17. Interaction between labor market and economic performance

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    References listed on IDEAS

    1. Florence Jaumotte, 2003. "Female Labour Force Participation: Past Trends and Main Determinants in OECD Countries," OECD Economics Department Working Papers 376, OECD Publishing.
    2. Agar Brugiavini & Franco Peracchi, 2007. "Fiscal Implications of Pension Reforms in Italy," NBER Chapters,in: Social Security Programs and Retirement around the World: Fiscal Implications of Reform, pages 253-294 National Bureau of Economic Research, Inc.
    3. Jean-Marc Burniaux & Romain Duval & Florence Jaumotte, 2004. "Coping with Ageing: A Dynamic Approach to Quantify the Impact of Alternative Policy Options on Future Labour Supply in OECD Countries," OECD Economics Department Working Papers 371, OECD Publishing.
    4. repec:dau:papers:123456789/11049 is not listed on IDEAS
    5. Jonathan Gruber & David Wise, 2005. "Social Security Programs and Retirement around the World: Fiscal Implications, Introduction and Summary," NBER Working Papers 11290, National Bureau of Economic Research, Inc.
    6. Thai-Thanh Dang & Pablo Antolín & Howard Oxley, 2001. "Fiscal Implications of Ageing: Projections of Age-Related Spending," OECD Economics Department Working Papers 305, OECD Publishing.
    7. Romain Duval, 2003. "The Retirement Effects of Old-Age Pension and Early Retirement Schemes in OECD Countries," OECD Economics Department Working Papers 370, OECD Publishing.
    8. Productivity Commission, 2005. "Economic Implications of an Ageing Australia," Labor and Demography 0506001, EconWPA.
    9. Peter Scherer, 2002. "Age of Withdrawal from the Labour Force in OECD Countries," OECD Labour Market and Social Policy Occasional Papers 49, OECD Publishing.
    10. Joaquim Oliveira Martins & Frédéric Gonand & Pablo Antolín & Christine de la Maisonneuve & Kwang-Yeol Yoo, 2005. "The Impact of Ageing on Demand, Factor Markets and Growth," OECD Economics Department Working Papers 420, OECD Publishing.
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    Cited by:

    1. F Z Alaoui Moustain, 2004. "Market distortions and the informal economy: the case of Morocco," Working Papers 542774, Lancaster University Management School, Economics Department.
    2. Christophe Muller & Christophe Nordman, "undated". "Task Organization, Human Capital and Wages in Moroccan Exporting Firms," Discussion Papers 08/12, University of Nottingham, CREDIT.
    3. repec:pit:wpaper:270 is not listed on IDEAS
    4. Jellal, Mohamed, 2012. "Dualisme Migration et Chômage au Maroc
      [Morocco dualism migration and unemployment policies]
      ," MPRA Paper 38365, University Library of Munich, Germany.

    More about this item


    Labor Market; Education; Public employment; Morocco;

    JEL classification:

    • J - Labor and Demographic Economics

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