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

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ather than shifts from low to high productivity sectors. Consequently, workers have not<br />

moved from low to high productivity sectors with higher earnings potential. New jobs did<br />

not require a more educated populace but simply more unskilled labor to fulfill the<br />

increase in productivity.<br />

<strong>Tunisia</strong>n Unskilled Labor Market<br />

The main employers <strong>of</strong> unskilled youth labor for non-qualified jobs or intermediate<br />

qualifications such as clerical support, service and sales, agriculture, plant and machine<br />

operation and assembling are in the following sectors: agriculture, public administration,<br />

construction, retail, manufacturing, transportation, telecommunications, hotels, and<br />

restaurants. In almost all these sectors, the net generation <strong>of</strong> youth employment exceeded<br />

the growth rate <strong>of</strong> youth labor participation due to the general growth in the private sector<br />

over the past decade. As a result, unemployment rates in these sectors have decreased.<br />

This clearly demonstrates that labor markets are not inefficient for unskilled workers.<br />

Thus, sustained economic growth <strong>of</strong> the private sector will help reduce youth<br />

unemployment, especially in the unskilled labor markets over the next 5-6 years.<br />

According to Marco Stampini and Audrey Verdier-Chouchane’s forecasting<br />

analysis, using the assumptions that: (a) the GDP elasticity <strong>of</strong> youth employment will<br />

remain constant at 0.24 (the average for the period 2005-07), and (b) GDP will grow by<br />

1.6% in 2011 (as a result <strong>of</strong> the revolution) and by a constant 4.5% from <strong>2012</strong>; youth<br />

unemployment is expected to have peaked at 26.2% in 2008, to have currently decreased<br />

to 25.4%, and to further decrease to 10.5% by 2018. Thus, creating more jobs for<br />

unskilled labor requires developing a business climate that fosters private investment,<br />

both foreign and domestic (See chapter by Rebekah Chang).<br />

Foreign investment from Europe and around the world will doubtless slowly<br />

increase as the country stabilizes; however, domestic investments such as building<br />

infrastructure are necessary in the short term to promote jobs and stabilize the economy<br />

in the long run. These investments will not only help jumpstart the economy by reducing<br />

the number <strong>of</strong> unemployed unskilled laborers, it will also help close the widening income<br />

and social gap between the richer coastal cities and the poor interior.<br />

189

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