Labour market performance and migration flows - European ...

European CommissionOccasional Paper 60, Volume IIn December 2007, the European Commission organized a “Euro-Med Employment Workshop” inpreparation for the first Euro-Mediterranean Conference of Employment and Labour Ministers held inMarrakech in November 2008 5 . FEMISE, the European Training Foundation and the InternationalLabour Organization prepared reports for this workshop (see ILO 2007.)Two very recent reports returned to these issues: the World Bank (2009) Shaping the Future. A LongTerm Perspective of People and Job Mobility in the Middle East and North Africa report (see below inSection 4.1, since it deals precisely with the interaction between labour migration and national labourmarkets), and the recent Middle East Youth Initiative report on employment prospects for young peoplein the region. The latter (Middle East Youth Initiative 2009) summarises several years of research and aseries of working papers from across the region. It stresses the challenges imposed by the mismatchbetween the qualifications of young people in the Middle East and North Africa and the demands of thelabour market, in particular as the six years of economic boom since 2008 have not contributed much tofix those challenges or reduce youth unemployment. It looks particularly at the school-to-work transitionand how institutional arrangements in MENA countries are at the heart of youth exclusion in the regionbefore focussing on the new risks the economic crisis entails for young people.Finally, it is important to refer to the five editions of the Arab Human Development Report (UNDP2002, 2003, 2005, 2006 and 2009). The first of the series pointed to the “knowledge gap” and the“capabilities deficit” on the one hand (UNDP 2003), the underutilization of women’s capabilitiesthrough political and economic participation (UNDP 2006), and the lag in “participatory governance”(UNDP 2005) as the main factors in Arab underdevelopment. The 2007 report on human security paysspecial attention to unemployment as one major component of human insecurity in Arab countries(UNDP 2009, pp. 10-11 and 108-111).2.2 Regulation of Labour Markets in AMCsAs shown in the National Background Papers detailed descriptions of labour law concerning hiring andfiring and Boni (2009), AMC labour legislation is extremely rigid on paper – with labour regulationssimilar to the ones in continental Europe and levels of labour market rigidity close to or even above thoseof the OECD – but highly flexible in practice due to poor enforcement and the prevalence of informalemployment.The Doing Business Database of the World Bank summarizes this situation: AMCs, with theexceptions of Tunisia and Jordan, are in the lowest bracket of the world ranking (under rank 100 out of183 countries in the database) (World Bank 2009b). Significantly, no single AMC undertook anylabour market regulation reforms in 2006, 2007, 2008 or 2009 (last major labour code reforms in theregion date back to 2003 in Egypt and Morocco). This lack of reform endeavours in the “Employingworkers” field contrasts with the remarkable reform zeal of AMCs in other “Doing Business”dimensions, in particular in Jordan and Egypt (World Bank 2009b, pp. 3-7). Given the labour marketsreforms undertaken in other regions of the world, the relative rank of most AMCs is deteriorating (inall of them but Syria and Tunisia, see World Bank 2008).The consequences of this kind of rigidity are straightforward: as shown by the same report, rigidlabour markets regulations are associated with a high informality rates and high femaleunemployment. Figure 2.2.1 shows this correlation and just how relevant it is for AMCs (see sections2.4 and 2.5).5 Conclusions of the first Euro-Mediterranean Conference of Employment and Labour Ministers, Marrakech, 9-10 November 2008,http://ec.europa.eu/external_relations/euromed/conf/employment_health_conclusions_1108_en.pdf.38