The Impact of the Employment Protection Legislation Reform on the Labor Market’s Flexicurity in Morocco

Said Toufik, Mohammed-Amine Arkhis and Youssef Oukhallou

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses the OECD’s methodology to build an Employment Protection Legislation index (EPL) for the Moroccan economy. In this framework, the main objective is to assess the impact of the new Labor Code’s provisions on the degree of flexicurity in the labor market. The paper also investigates the approximate influence of the EPL changes as regards to some employment-related variables. Our results show that after the 2004 Labor Code reform, the labor market’s flexibility level went down from 75 percent to 44 percent, as EPL became significantly stricter. Furthermore, our analysis suggests that the new legislation, although it brought relatively strict restrictions on hiring and firing, generated a significant increase in dismissals during the three first years of its implementation. And unlike the buckle of conventional literature and several empirical findings, the unemployment rate actually dropped, allegedly backed-up by a solid GDP growth during the 2000’s.

Keywords: Labor Market; Flexicurity; Employment Protection Legislation; EPL Index (search for similar items in EconPapers)
JEL-codes: E24 J81 K31 (search for similar items in EconPapers)
Date: 2016-12-17
New Economics Papers: this item is included in nep-ara, nep-law and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:75634

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