Publications

A review of the literature and the available data support the evidence that an increasing share of population outflows from the South Med region to the EU is individuals with tertiary education. In recent years, this has gone hand in hand with increasing educational attainments amongst the regional population. The latter is a predictor of both further migration and reduced concern about brain drain. The share of highly educated individuals amongst those who stay is still increasing and, in most countries, is more than those who choose to leave. Lack of job opportunities is the main driver of migration across the population. The impact of migration on the sending countries is not necessarily negative, as remittances – both financial and cultural – are large in the region and, de facto, migration works as a safety valve for mounting pressure, led by high unemployment, especially amongst youths. The key question is not about brain drain but about how to restore a positive dynamic between human capital creation and potential growth leading to job creation. This requires more targeted education policies but, above all, improvement in the quality of public and market institutions.

We provide new evidence on the participation of firms within Global Value Chains (GVCs) for a large pool of MENA countries included in the World Bank Enterprise Surveys (WBES). Making use of several firm-level GVC participation indices, we find a positive association with firm productivity gains. Based on this result, we further investigate the complexity of GVC relationships and examine how sector/country connectivity affects firm productivity. Using a multi-level model, we augment our analysis by including centrality indicators calculated on the intermediate trade network, constructed from the EORA input-output tables. Positioning within the network structure of trade in intermediate products also plays a role. Our results indicate a positive effect of the connectivity of the sector on the Total Factor Productivity (TFP) of firms. Results remain robust after we control for the endogeneity between firm productivity and participation in GVCs.

This paper analyses the effect of macroeconomic policies on employment. It contributes to the literature in three ways. First, we examine the effect of macroeconomic policies on employment. To do so, we rely on policy tools, rather than policy outcomes, since the former are less endogenous. In other words, we rely on tariffs to measure trade policy (instead of exports and imports), tax rates to measure fiscal policy (instead of government spending) and lending rate (instead of inflation rate) to measure monetary policy. Second, we distinguish between stabilisation policies and structural characteristics. Whilst the aforementioned policies measure the former, we measure the latter by the quality of economic institutions (time to enforce contracts), human capital (spending on tertiary education) and economic diversification (share of fuel exports). Third, we distinguish between the trend and the cyclical components of employment, to show to what extent policy tools have a stabilisation effect (on the cyclical component) or a better allocation effect (on the trend component).