On the interaction between exports and labor market regulation: Evidence from the MENA countries

Irene Selwaness and Chahir Zaki

The Quarterly Review of Economics and Finance, 2019, vol. 73, issue C, 24-33

Abstract: Using a panel of MENA countries, this paper aims to examine the interaction between exports performance and labor market regulations on employment levels. The theoretical predictions on this literature show that the effects of exports in any given country can be altered by the nature of labor market regulations. Previous studies showed that trade liberalization was more likely to have a positive impact on employment rates in countries with flexible labor markets and vice versa, mainly because of how the labor market adjustment process to trade openness occurs. Our main findings how that labor market rigidity reduces the positive impact of exports on employment. Indeed, rigid labor markets may limit the easiness of creating new jobs that satisfy the increased labor demand in expanding sectors when a country experience an increase in its exports.

Keywords: Labor market rigidity; Exports; MENA (search for similar items in EconPapers)
JEL-codes: F14 F16 J08 J88 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:73:y:2019:i:c:p:24-33

DOI: 10.1016/j.qref.2018.05.011

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