Abstract:The combination of demographic factors and an increase in education has caused a significant rise of university graduates' unemployment in the Middle-East and North Africa regions. This article provides a prospective cost-effectiveness analysis of the impact of alternative labour market policies using a dynamic general equilibrium model. The model allows for an endogenous determination of unemployment through a multisectoral efficiency wage setting mechanism. The main finding is that a wage subsidy targeted at… Show more
“…High public investment in education has been shown to increase unemployment in some contexts, high-skilled unemployment sometimes even being higher than that of low and medium skilled. 2 The Middle East and North Africa (MENA) region, which has heavily invested in education over four decades, 3 serves as a good example of an unsuccessful absorption of young graduates into the labor market (Marouani 2010;Marouani and Robalino 2012). However, not only do employment figures matter in their own, it is also important to consider the type of employment facing young graduates.…”
The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned. By making any designation of or reference to a particular territory or geographic area, or by using the term "country" in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.
“…High public investment in education has been shown to increase unemployment in some contexts, high-skilled unemployment sometimes even being higher than that of low and medium skilled. 2 The Middle East and North Africa (MENA) region, which has heavily invested in education over four decades, 3 serves as a good example of an unsuccessful absorption of young graduates into the labor market (Marouani 2010;Marouani and Robalino 2012). However, not only do employment figures matter in their own, it is also important to consider the type of employment facing young graduates.…”
The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned. By making any designation of or reference to a particular territory or geographic area, or by using the term "country" in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.
“…In 2011, the unemployment rate among graduates was 30.5 percent, while it was 9.3 percent for those with no education. Graduates' unemployment has, therefore, become one of the biggest challenges in Tunisia (Marouani, ).…”
Section: The Tunisian Context and Model Calibrationmentioning
This article analyses how a crisis impacts labour markets in origin countries through migration channels. For this purpose, we develop a novel dynamic general equilibrium model with a focus on the interlinkages between migration, the labour market and education. The main innovation of the paper is the retrospective modelling in general equilibrium of the impact of an economic crisis to isolate the impact of migration on local unemployment. The impact of the crisis on education decision is captured through endogenous returns to education. The simultaneity of the crisis in Tunisia and its partners worsened the labour market situation mainly through the increase in labour supply. The main result of this study is that migration is indeed one of the main determinants of the unemployment increase and that remittances have a higher impact than the variation of emigration flows. The low skilled bear the highest costs in terms of unemployment and wage decline.
“…High public investment in education has been shown to increase unemployment in some contexts, high-skilled unemployment sometimes even being higher than that of low and medium-skilled 1 . The MENA region, which has heavily invested in education over four decades 2 serves as a good example of an unsuccessful absorption of young graduates into the labor market (Marouani 2010;Marouani and Robalino 2012). However, not only do employment figures matter in their own; it is also important to consider the type of employment facing young graduates.…”
During the last half-century, the evolution of educational attainment among Malaysians has been spectacular, and current enrollment rates suggest this progression will continue, albeit at a slower pace. Such a transformation of the educational attainment of labor should bring about macroeconomic effects such as wage compression, sectoral shifts and/or high skill unemployment , unless compensatory mechanisms exist. This article examines the impact of this evolution using a dynamic general equilibrium model applied to Malaysia. We argue that skill biased technological change occurred in Malaysia in recent years, and permitted unemployment figures to remain low and skill premia not to sink, despite the shift in skill structure. We run a retrospective simulation, looking at how unemployment and wages would have reacted had skill biased technological change not been prevalent. We also simulate the effects of a restriction in the supply of education to understand the impact of recent educational policy in Malaysia. The results are fed to a microdata set using a microaccounting technique, addressing distributional concerns. Our results show that the reduction in wage inequalities could have been substantially more important had skill biased technological change not been present. Furthermore, they suggest that the open-door higher education policy has contributed heavily to a reduction in wage inequalities.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.