Morocco: Selected Issues

July 16, 2019

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Format: Chicago

Morocco: Selected Issues, (USA: International Monetary Fund, 2019) accessed December 22, 2024

Summary

This Selected Issues paper studies the potential for well-sequenced labor and product market reforms to play a more important role in promoting growth and job creation in Morocco. A Dynamic General Equilibrium model is used to assess the macroeconomic effects of different reform scenarios (isolated, coordinated, or sequenced) that reduce hiring costs and/or firms’ entry costs in the presence of a large informal sector. The paper highlights that reforms are most effective if executed in a coordinated fashion, as implementing simultaneous reforms in the labor and product markets could add about 2.5 percent of gross domestic product growth and reduce unemployment by about 2.2 percentage points after five years. If reforms are to be introduced sequentially, due for instance to capacity or political economy constraints, starting with product market reforms is more effective in boosting output in the short-run while starting with labor market reforms would reduce unemployment faster.

Subject: Employment, Job creation, Labor, Labor market reforms, Labor markets, Unemployment

Keywords: Africa, Cost, CR, Economic growth, Employment, Enterprise survey, Firm, Global, Hiring cost, ISCR, Job creation, Labor market, Labor market reforms, Labor market regulation, Labor markets, Market entry, Middle East, North Africa, Unemployment

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2019/231
Stock No:

1MAREA2019004
ISBN:

9781498325905
ISSN:

1934-7685

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