The Macroeconomic Effects of Labor and Product Market Reforms in Morocco

Babacar Sarr, Mokhtar Benlamine and Zsuzsa Munkacsi ()

No 2019/222, IMF Working Papers from International Monetary Fund

Abstract: This paper studies the macroeconomic effects and sequencing of (LMRs) and product (PMRs) market reforms in Morocco. It finds that introducing LMRs and PMRs simultaneously would add about 2.5 percentage points (pp) of GDP growth and reduce unemployment by about 2.2 pp after five years. If sequencing is required, starting with PMRs would be more effective in boosting output, while starting with LMRs would reduce unemployment faster. Finally, increasing unemployment benefits would be more effective if this reform takes place after the implementation of LMRs and PMRs.

Keywords: WP; cost; enterprise; labor market; Morocco; unemployment insurance; structural reforms; growth; unemployment; hiring costs; firms’ entry costs; informal economy; small-open economy; hiring cost; market entry; growth-unemployment nexus; employment effect; enterprise survey; reducing unemployment; firms' hiring cost; hiring probability; employment survey; adjustment cost; employment effects of reform packaging; barriers to entry; Unemployment benefits; Labor markets; Employment; Labor market reforms; Global (search for similar items in EconPapers)
Pages: 35
Date: 2019-10-11
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