‘Labor welfare’ between supply and demand

Are labor issues on the demand or supply side? And do labor market regulations have workers’ “welfare” at heart?

As far as problem solving is concerned, one has to dig deep and “get to the bottom of it”. The eternal dilemma of tackling how labor market regulations impact the labor market structure, performance and outcome has always been in identifying its essence. Inarguably, labor market issues are numerous and, depending on how you look at it, they could arise from both the demand and the supply sides; the supply side being education, training… etc. and the demand side presented in the employment sector.

The papers presented in this workshop  (Labor Market Institutions and Labor Market Performance and Outcomes) particularly focus on the demand side; specifically on the impact of labor market regulations, such as formality, gender employment and social security, on labor market outcomes. The closing session concluded with policy perspectives; engaging a panel chaired by Dr.Ahmed Galal in a discussion of different policy implications that have been brought up by earlier speakers. The panel involved Dr. Ragui Assaad (Humphrey School of Public Affairs), University of Minnesota), Dr. Mustapha Nabli (Former governor, Central Bank of Tunisia) and finally Dr. Nader Kabbani (Director of Research and Policy,Silatech).

Dr. Assaad goes first with concluding remarks on how challenging it can be to identify the real impacts of labor market regulations on the market structure and performance. He argues that clean identification is very hard to come by, as he explains when interviewed, due to the various distortions that could affect the making of regulations (such as economic crises or growth spurts), which makes it harder for economists to identify the real drivers and impacts on the market.

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Macroeconomics, Iran and Egypt experiences

Hoda Selim was the discussant for two papers falling under the macroeconomic theme at the ERF 20th Annual Conference. The first paper entitled ‘Iran’s inflation Experience: Demand Pressures, External Shocks, and Supply Constraints‘ co-authored by Magda Kandil and Ida Mirzaie, showcased the Iranian inflation experience, pressures, shocks and constraints. Although Iran is an oil producing country, and oil brings in a lot of liquidity and money from outside to the domestic market, inflationary pressures have heightened.

[youtube http://www.youtube.com/watch?v=gyAmE9LPlis]

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Upgrading and formalizing SMEs in MENA

Small and Medium Enterprises (SMEs) play a key role in the economic structure of developing countries. Which makes sense considering that they are mostly over-populated, their governments are low on budgets and inequality of opportunities is only natural. Economically speaking, SMEs constitute a major source of employment and generate significant domestic and export earnings (OECD, 2004).

Dr. Mona Said (Professor of Economics at the American University in Cairo) discusses two of the papers presented in a parallel session during the second day of the ERF 20th Annual Conference, looking at the upgrade and formalization of small and medium enterprises (SMEs) in MENA. The papers presented complementary evidence on the importance of certain factors, such as firm size, sector and degree of education.

[youtube http://www.youtube.com/watch?v=UaVtkXKi3YI]

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Equality of opportunity: What the people want vs. what is given

“Therein lies the problem with the idea of equal opportunity for all. Some people are simply better placed to take advantage of opportunity.”

—Deborah Orr

In the first panel at the ERF 20th Annual conference Marc Fleurbaey (Professor of Economics and Humanistic at Woodrow Wilson School of Public and International Affairs, Princeton University) gave an interesting presentation on alternative approaches to comprehensive measurement of equality of opportunity and how it could be implemented in developing countries. We caught up with Fleurbaey after the session and recorded the short interview below.

[youtube http://www.youtube.com/watch?v=n5VtPe9tLdo]

Fleurbaey explains that despite the lot of interesting research on the measurement of equality of opportunities, the majority only looks at opportunities, but then one would wonder what happens to the people who fail to seize the opportunities. In fact, he argues, it is rather hard to measure opportunities if you want to encompass all the circumstances that constrain people.

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ERF About to Launch Open Access Micro Data

ERF took the opportunity to launch one of its most important projects at the Annual Conference: its Open Access Micro Data project. It is impossible to do state of the art microeconomic research without access to data. Open data provides a low cost distribution technology. It is a right to be demanded by populations to enhance transparency and accountability as such.

Major progress in the MENA region has been achieved to make data available and accessible to the public. This is considered a huge opportunity for researchers to make use of this data to analyze questions, provide evidence and come up with solutions to current issues of our time; argues Nemat Shafik, International Monetary Fund (IMF).

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Role of firms and export performance in Syria – ERF Award Winner

The fourth and final plenary session at the Economic Research Forum’s Annual Conference on Corruption and Economic Development was dedicated to granting awards to distinguished papers presented for the Conference. Abstracts and papers presented went through a highly selective screening process where a number of factors were weighed, such as topic, scope, methodology, and rigour.

The paper Giving Credit Where Credit Is Due – The Firm Determinants of Recent Export Performances in Syria resulted amongst the winners. The paper has an international economics emphasis and it focuses on the role of firms in export trends in Syria. In the videos below, we caught up co-authors Rabie Nasser and Marc Schiffbauer.

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Labor market dynamics in Egypt and Turkey

Individuals with low education in Egypt, are subject to one job career which gives them very little opportunity for improving life standards. This was one of the findings of the paper  Structural labor market transitions and wage dispersion in Egypt by Chaimaa Yassine, discussed at the session on Labor market dynamics at the ERF’s 18th Annual Conference.

For Insan Tunali, University of Minnesota and ERF, who chaired the session, the paper indicates that arrival rates of offers for workers inEgypt are generally higher when unemployed than when employed.

He added that the paper studies labor market differentials across the different educational groups in Egypt showing that the wide variation in frictional transition parameters across these groups help in explaining persistent unemployment and wage differentials especially among the very high educated.

The second paper discussed in the session Labor mobility between the formal/informal divide inTurkey: evidence from individual level data, by Aysit Tansel and Elif Oznur Acar, implements the mobility analysis to Turkish Labor markets with a specific emphasis on informality. He added that persistence in the area where one starts from is the pattern in Turkey.

Tunali added that the study takes a labor mobility analysis in the context of formal/informal division in Turkey. One of the interesting findings was that Turkish women do not have much of a chance to move out of informal sectors if they start out there.