Structural Change, Productivity and Job Creation: Evidence from Tunisia
Date
2022-08
Authors
Amara, Mohamed
Zidi, Faycel
Jeddi, Hela
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
This paper combines macro and micro level analysis to identify the main sectors and
firms that present the greatest potential to boost productive employment in Tunisia.
The macro level analysis uses aggregate data at the sectoral level to understand the
main characteristics of structural changes, employment, and productivity growth. The
micro or firm-level analysis goes into more details of the process of reallocation by
using microdata from the Tunisian Business Register covering the last two decades.
The empirical results show that a 1% increase in industry output generates twice
as much employment as the services sector for the population in the working age
groups 15–64-year-old; while a 1% increase in services output generates twice as
much employment as industry sector for youth between 15 and 25 years. In addition,
growth in value-added per capita between 2011 and 2018 was “jobless growth”. It
was driven by increased productivity and participation rate, rather than an increase
in the employment rate. Tunisian manufacturing sector is hampered by a waste and
a misallocation of resources between firms as capital inputs are directed from their
productive uses with too many resources going to less productive firms. Within-firm
and between-firm components negatively impact labour productivity growth and slow
down efforts aimed at reducing unemployment. This is providing clear evidence of
low firm performance as job creators, while entry and exit contributed only negligibly
to changes in labour productivity between 2000 and 2020.
Description
Keywords
Job creation; Structural change; Misallocation; Productivity; Youth; Tunisia