Tunisia: Understanding Conflict 2012 - Johns Hopkins School of ...

Understanding Unemployment in Tunisia
Tony Tsai
High unemployment has been a consistent problem in Tunisia for over twenty years.
Despite averaging one of the highest GDP per capita in Africa, unemployment in Tunisia
is over 13% for the total populace and 30% for youth ages fifteen to twenty-four. Official
figures reached a high of 47% for recent college graduates and first-time job seekers.
Many argue that the country needs to enhance the efficiency and competitiveness of the
domestic economy through market liberalization, transparency incentives, and regulatory
reform; however, the labor market dynamics in Tunisia require a much more targeted
approach. Understanding the employment and labor market situation in Tunisia is critical
as the country reforms both its political institutions and economic policies.
Existing Literature
There are a myriad of explanations for the unemployment situation in Tunisia. Most of
the existing analysis adopts a macroeconomic framework. Some studies argue that given
the rapid expansion of the labor force, job creation was not high enough to lower
unemployment rates. Others argue that many sectors, such as private services, enjoyed
higher labor productivity, which resulted in lower employment growth. A deeper analysis
of labor markets is needed to guide both policy and institutional reform.
In 2000 and 2004, the World Bank conducted studies to explain why, despite high
growth rates, unemployment was rising. It concluded that the high and persistent
unemployment rates reflected demographic pressures and a decrease in the employment
intensity of growth. It highlighted the need to strengthen investment in the private sector
to sustain higher growth rates and generate jobs. Thus, it recommended that “creating
more and better jobs would call for moving up the value-added ladder, towards higherskill
exports and services, while facilitating the emergence of a knowledge-based
economy in the long-term.” Tunisia is moving towards a higher-skilled exports and
services economy, but these jobs are primarily filled by unskilled labor. Thus,
unemployment of unskilled labor has gone down and will continue to decrease as the
187