Labour market performance and migration flows - European ...

Chapter IFinal Reporttrue labour market policy is compounded by the absence of public strategic human-resource planning.The only reform was a 70% increase in the minimum wage in 2007, the first rise since 1996.3.1 Active Labour Market PoliciesIn several AMCs, employment policies are limited in practice to active labour market policies(ALMPs). ALMPs aim to correct labour market failures and have been used in Europe and the US todeal with high unemployment and deficient aggregate demand. These polices take the form of directjob creation to restore the employability of workers, labour market training to give workers theskills required by firms, and job brokerage to improve the match between job seekers and vacanciessuch as employment services that provide better information on vacancies or help to improve thesearch effectiveness of the unemployed. In several AMCs (notably Morocco and Tunisia, Egypt andto a lesser extent Algeria), ALMP have become the main tool of national employment policies,absorbing substantial financial resources.Several active labour market policies in the form of employment and training programmes havebeen set up in Egypt to promote job creation and reduce unemployment. De Gobbi and Nesporova(2005) argue that the ALMPs in Egypt have not always met their set targets since there are skillmismatches between workers and jobs and hence obstacles in job placements; and the credit schemesfor self-employment perform poorly. El-Megharbel (2007) argues that ALMPs should be considered asshort-term solutions to overcome labour market failures. Consequently, the impact of these policies onjob creation should not be overstated. These policies must also be aligned with macroeconomic policiesin the global framework of a national employment strategy that aims to increase employment. Assaadand Barsoum (2007) argue that most active labour market programs are primarily provided throughgovernmental or quasi-governmental bodies and suffer from limited efficiency, skewed targeting, and aheavy reliance on international donor support. These programs fail either because they came from thetop down, or because they were implemented badly. Many programs are initiated and supportedthrough foreign donor support and are insufficiently institutionalized or integrated into a policyframework. Despite the success of some NGOs, these programs remain limited in scale and dependheavily on grants and, therefore, are not sustainable over the long term. Finally, there have been nosystematic evaluations of most of the programs and policies addressing youth employment in Egypt.Studies with pre- and post-intervention designs involving control and intervention groups are very rare.This creates a huge knowledge gap that hinders the learning of lessons and the building of new projects.To conclude, ALMPs have not been effective in creating jobs in Egypt. There have been too manydispersed and uncoordinated policies. There is a need for a more integrated set of policies that addressthe roots of the malfunctioning of labour markets.In Tunisia, ALMP instruments are characterised by a wide diversity and an accumulation over theyears. This complexity poses problems of transparency, overlapping, coordination and relevance ofprogrammes in relation to the structure of unemployment. There is no systematic and regular process ofevaluation concerning their effectiveness and their equity, and they tend to benefit young graduates,whereas the vast majority of the unemployed (75%) have just a primary or secondary education. Onlypublic work programmes have a high orientation towards the unemployed with primary education.Despite a high concentration of unemployment in rural areas in certain regions, ALMPs are focused inurban areas, where all public labour market institutions are concentrated as well. The continuouseducation component of these policies does not exceed 4.5% of all expenses, and benefits big companiesmore often than SMEs. Between 1994 and 2004, there was a proliferation of public programmes to assistthe transition of young people from school to work or the promotion of self-employment. Often, theseprogrammes led to the creation of a large number of precarious, short-lived jobs. Due to theirmultiplicity and overlapping, often ALMPs do not distinguish, short of targeting and evaluation, betweenthe assistance dimension (passive employment policies) and a true promotion of labour integration(quality and stability). A recent assessment by the National Consultative Commission on Employment53