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On the Interaction between Trade Reforms and Labor Market Regulation: Evidence from the MENA Countries’ Labor Markets

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  • Selwaness, Irène
  • Zaki, Chahir

Abstract

Using a panel of MENA countries, this paper tries to examine the interaction between trade reforms and labor market regulations on the outcome of the labor market. The theoretical predictions on this literature show that the effects of trade liberalization in any given country are conditional on the nature of labor market regulations since trade liberalization is more likely to have a positive impact on employment and wages in countries with flexible labor markets and vice versa. Moreover, more regulated labor markets tend to have higher wages at the expense of sector wide employment. Our main findings show that labor market rigidity reduces the positive impact of trade reform on employment. While this result is stronger for females, it is not for males.

Suggested Citation

  • Selwaness, Irène & Zaki, Chahir, 2017. "On the Interaction between Trade Reforms and Labor Market Regulation: Evidence from the MENA Countries’ Labor Markets," GLO Discussion Paper Series 27, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:27
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    References listed on IDEAS

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    1. Adriana Kugler, 2000. "The Incidence of Job Security Regulations on Labor Market Flexibility and Compliance in Colombia: Evidence from the 1990 Reform," Research Department Publications 3094, Inter-American Development Bank, Research Department.
    2. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
    3. Carmen Pagés-Serra, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2000), pages 109-154, August.
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    5. Carmen Pagés-Serra & James J. Heckman, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," Research Department Publications 4227, Inter-American Development Bank, Research Department.
    6. Di Tella, Rafael & MacCulloch, Robert, 2005. "The consequences of labor market flexibility: Panel evidence based on survey data," European Economic Review, Elsevier, vol. 49(5), pages 1225-1259, July.
    7. Rovelli, Riccardo & Bruno, Randolph Luca, 2007. "Labor Market Policies and Outcomes: Cross Country Evidence for the EU-27," IZA Discussion Papers 3161, Institute of Labor Economics (IZA).
    8. Chahir Zaki, 2014. "On Trade Policies and Wage Disparity: Evidence from Egyptian Microeconomic Data," International Economic Journal, Taylor & Francis Journals, vol. 28(1), pages 37-69, March.
    9. Adriana Kugler, 2000. "The Incidence of Job Security Regulations on Labor Market Flexibility and Compliance in Colombia: Evidence from the 1990 Reform," IDB Publications (Working Papers) 43042, Inter-American Development Bank.
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    Cited by:

    1. Nora Aboushady & Chahir Zaki, 2019. "Investment climate and Trade Margins in Egypt: Which Factors Do Matter?," Economics Bulletin, AccessEcon, vol. 39(4), pages 2275-2301.

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    More about this item

    Keywords

    Labor Market Rigidity; Trade; MENA;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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