Labor market institutions, performance and outcomes: Regulations and reforms

The issues of labor market performance in the Arab region is one of the longest standing areas of economic study that ERF has embarked on over the years. The region has gone through a period of political distress that has certainly impacted the labor market dynamics negatively, however the political situation cannot be held solely liable for the pitfalls of the Arab labor market.

Today, ERF is holding a workshop on “Labor Market Institutions and Labor Market Performance and Outcomes”. The workshop provides a platform for discussion of the five papers that have resulted from the latest call for proposals on this particular theme. The papers tackle a number of important issues in the ERF region’s labor markets; including informality, job finding rates, social insurance and gender employment.

How constraining are Labor market regulations on labor market outcomes?

Following Dr. Ahmed Galal’s lead on the opening remarks, Dr. Ragui Assaad kick starts the workshop discussions, arguing how the labor market is largely understudied in the region, which he mainly blames on the lack of supporting data. He also highlights the important effect of labor market regulations that shape the performance as well as outcomes of the labor market. He also raises the issue of dynamism in MENA’s labor markets, especially in informal SMEs.

Dr. Jackline Wahba (SouthHampton University) takes on the discussion of her joint paper with Dr. Ragui Assaad; tackling “Labor Regulations and Informality in Egypt”. Dr. Jackline studies the state of contracted jobs in light of the Egyptian 2003 Labor Law in over a “before and after” 5-year period. The paper focuses on probabilities of starting, having and maintaining contracted jobs. She argues that, political situation aside, the 2003 labor law generally has a positive impact on formal employment and increasing job holdings , as it makes it easier for firms to “hire and fire”. She also concludes that reforms help increase flexibility; which reduces social security contribution that, in turn, encourages formal employment.

Finally, Dr. Irene Selwaness (Faculty of Economics & Political Science, Cairo University) concludes the first session with a paper, that is a joint effort with Dr. Rania Roushdy (Population Council), tackling Informality Dynamics on the Egyptian labor market, and correspondingly questions how long it takes employees to get social insurance. Irene argues that the lack of social insurance has caused a significant expansion of the informal sector in the Egyptian Labor market over the the 1998-2012 period. They study social security schemes also in light of the 2003 labor law, which is technically the logical step to follow landing a contract. The paper measures important variables that affect social insurance schemes; the most significant of which include age and employment sector. Finally they conclude that policy makers need out-of-the-box solutions that take a deeper look at different social security schemes.

 

Stay on the look out for more posts on this workshop.

Also don’t forget to follow the live feed on twitter @ERFLatest

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