EMANES Working Paper No 65

Why is there persistent labour market segmentation, as evidenced by gender patterns in employment and occupational mobility? What is the impact and potential of various formalisation policies in MENA countries?
We first provide an overview of the informal economy in its taxonomy, coverage and drivers, across six MENA countries. Next, we analyse workers’ occupational mobility. considering their pre-existing status, age cohort, gender and other demographics, using transition tables and multinomial logistic regressions applied to longitudinal microdata from Labour Market Panel Surveys. We find persistent segmentation and low occupational mobility in all countries, suggesting that informal employment is not driven by choice on the labour supply side but by structural constraints on the demand side. We also find rather modest impacts of existing formalisation policies that encapsulate distinct stick and carrot strategies, as well as business versus workers targeting. We conclude that promoting social and solidarity enterprises, and extending microfinance to informal enterprises, are promising policies for the creation of decent jobs.

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