Trade liberalization and demand labor elasticities : evidence from Tunisia

Ce papier étudie les effets de la libéralisation des échanges sur les élasticités de la demande du travail. Une équation de demande d'emploi est estimée en se fondant sur des données (1971-1996) portant sur six industries manufacturières tunisiennes. Les résultats des tests économétriques ne vérifient pas l'idée que la libéralisation des échanges peut permettre une augmentation de l'élasticité de la demande du travail. Dans la majorité des industries considérées, l'hypothèse de l'absence d'une relation entre l'ouverture commerciale et l'élasticité demande de travail ne peut pas être rejetée. La faiblesse de l'élasticité de demande de travail peut être expliquée par les régulations du marché du travail mises en place durant 1987-1996. Cependant, les résultats sont robustes par rapport au type de statut du travail considéré (main-d'oeuvre contractuelle et permanente). Ces résultats confortent l'idée qu'au cours de la période de libéralisation, le marché du travail est devenu plus flexible, et que les chefs d'entreprise préfèrent embaucher des travailleurs contractuels. This paper investigates the effects of trade liberalization on labor demand elasticities. Employment demand equation is estimated by using data (1971-1996) for manufacturing industries in Tunisia. Results from empirical testing using the model find a weak support for the idea assuming that trade liberalization will lead to an increase in labor demand elasticities: in the vast majority of the industries we consider, we cannot reject the hypothesis of no relationship between trade openness and labor-demand elasticities. This weakness of labor demand elasticity in practice is perhaps explained by the tight labor market regulations in place during the 1987-96. However, our results are robust to the type of labor considered (contract labor and permanent labor). This supports the conclusion that under liberalization period labor markets have become more flexible, and that employers prefer recruiting contracts worker. (Full text in english)

Consequences of trade liberalization on the labor market in developing economy : The case of Tunisia

This paper investigates short and long run effects of trade liberalization on employment and wages using a specific factor trade model. Employment and wage equations areestimated using data (1971-1996) for importable and exportable sectors in Tunisia. Results fromempirical testing using the model find some supports for the theoretical predictions of Edwards(1988) for the exportable sector. On the other hand, in the importable sectors, we find resultsthat are opposed to those predicted by Edwards (1988) since employment and wages increase. Apossible reason for the divergence of theory and practice is that the Edward's model is premisedon the basis of a fixed supply of labour. Exportable employment could therefore only rise ifimportable employment fell. However, as we have seen, the supply of labour increaseddramatically in Tunisia as women entered the labour market. This allowed employment inimportable to be maintained (even slightly increase) as the exportable sector expanded.

Labour-Use Efficiency in Tunisian Manufacturing Industries: A Flexible Adjustment Model

dynamics, employment, labour-use efficiency, panel data, Tunisia, speed of adjustment, technical change

Labour-Use Efficiency in the Tunisian's Manufacturing Industries: A Flexible Adjustment Model

This paper investigates the process of adjustment in employment. A dynamic model is applied to a panel of six Tunisian manufacturing industries observed over the period 1971-1996. The adjustment process is industry and time specific. The adjustment parameter is specified in terms of factors affecting the speed of adjustment. Industries are assumed to adjust their labour inputs towards a desired level of labour-use. A translog labour requirement function is specified in terms of observable variables and is used to model the desired level of labour-use.The labour requirement is specified to be function of wages, output, quasi-fixed capital stock and technology. The empirical results show that in the long-run, employment demand responds greatest to value added, followed by capital stock changes, and least by wages. The speed of adjustment in employment and the degree of labour-use efficiency show large variations among thesectors and over time.

The Impacts of Trade Liberalization on Employment and Wages in Tunisian Industries

trade, labour market, exports, imports, manufacturing, panel data, Tunisia

The impact of trade liberalization on employment and wages in Tunisian industries

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Youth Unemployment in Tunisia: Characteristics and Policy Responses

Abstract In this paper we analyze the trends in youth employment and unemployment in Tunisia from 1984 to 2010. Next we evaluate the labor market reforms and active labor market policies undertaken by the Tunisian government in order to assess the effectiveness of these policies. We have three main findings. First, while unemployment is primarily a youth phenomenon in Tunisia, the long term trend indicates that workers with higher education have seen a deterioration of their job prospects for workers of all ages. Thus, there has been a failure by the Tunisian economy to produce a sufficient number of jobs for more educated workers. Second, the rise in schooling among Tunisian youth implies that this weakening of the job market has been particularly felt by the youth. Young Tunisians with higher education suffer from an unemployment rate over 50%. Finally, our evaluation of the active labor market policies and labor market reforms of the 1990s imply that these policies have done very little to improve the labor market conditions for Tunisian youth. In order to improve these conditions two factors are necessary: first, the macroeconomy needs to be improved; second, the educational system needs to focus on producing skills rather than credentials in order for young people to be able to contribute to the private sector

The Impacts of Trade Liberalization on Employment and Wages in Tunisian Industries

Abstract This paper investigates short and long-run effects of trade liberalization on employment and wages. Employment and wage equations are estimated using data for importable and exportable sectors in Tunisia. Causality tests show that causality is unidirectional. Wages strongly causes employment but employment does not cause wages. There is significant difference in the direction of responses in the short and long-run. Results from empirical testing using the models find only support for the short-run theoretical predictions for the exportable sector. Similar results obtained for the importable sectors. We find the differences in the short and long-run wage and employment responses to changes in export to be explained by learning by doing, organizational changes and improved factor utilization and labour productivity. A possible reason for the divergence of theory and practice is that the theoretical model is premised on the basis of a fixed supply of labour. Exportable employment could therefore only rise if importable employment fell. However, as we have seen, the supply of labour increased dramatically in Tunisia as women entered the labour market. This allowed importable employment to be maintained (even slightly increased) as the exportable sector expanded