Tunisia: From MILES to More
Transcript of Tunisia: From MILES to More
Contents
1. Tunisia: Country Context2. Issue3. Questions & Methodology4. Findings5. Evolution of the Policy Dialogue6. Going Operational: The DPL
Tunisia is a middle income country….
• With a population of 10.3m (2008)• …a GDP/ capita of $3,632 (2008)• …and an estimated poverty rate of
7%• Main exports are electronic and
mechanical goods, textiles, energy and tourism
• Life expectancy is 74 years• Adult literacy is 86% for males and
69% for females• Gross primary enrollment is 110
(male) and 107 (female) in % of the relevant age
• Infant mortality is 18 per 1000 live births
• There is no measurable infant malnutrition in children under 5yrs
Issue: stubborn unemployment in spite of growth…
0%
5%
10%
15%
20%
25%
1994 1999 2004 2005 2006 2007
Primary
Secondary
Higher
None
Average
• 4.8 % average annual growth of GDP over past 8 years (higher than average growth in MENA, 4.5%, and middle income countries, 4% )
• Unemployment rate relatively high at 14.2 % (6.4% for all middle income countries, 2008) and has barely fallen in the same time frame
• Unemployment affects the better educated:
• 46% of university graduates are unemployed 18 months after graduation, 32% 3.5 years after, and 19% average all people with higher education
0%
5%
10%
15%
20%
25%
30%
35%
40%
1994 1999 2004 2005 2006 2007
15-19
20-24
25-29
30-34
35-39
40-44
45-54
55+
Total
• The younger the jobseekers, the higher their unemployment rate
• Around 35% for the 15-19 year olds, and below 5% for the group 46+
….especially for ‘outsiders’, such as youth and women
•Newcomers, such as the young and women face a more difficult labor market situation. •Unemployment rate of women close to 18% vs. 13% for men•In addition, in 2008, the labor force participation rate among women aged 15 to 64 was 28%, compared to 74% among men (ILO, 2009).
Question: What are the constraints to employment, and in what order?
LABOR DEMAND
Firms invest
Firms shrink or grow
Firms start up
Need capital
Need specific
skills/ labor
LABOR SUPPLY
Graduates from
-former jobs
-university
-vocational
-secondary
-primary
Seek work/life mix
in line with skills
Quantity:
Firms demand labor, in function of
the market wage
People supply labor, in function of
the market wage
Quality:
Firms demand
specific skills, levels, contracts
People supply specific skills, levels
and contractual terms
In a free labor market, the wage (quantity + quality) mediates Demand and Supply
MACRO and LEGAL framework: e.g. social insurance, competition, property rights
LABOR MARKET
Methodology: MILES framework
• Tunisia benefited from a series of Programmatic Economic and Sector Work (Analytical Reports), a so-called ‘ESW’, from 2002 to 2006
• The tools that were used in the analytical work included: • simulation modeling, • surveys, • descriptive analysis from existing (Labor Force Survey LFS) and new surveys, • econometric (ex post) analysis, • legal review, • institutional process assessment
• Strong client co-operation in data collection, programming and increasingly, analysis• Statistical department of Ministry of Employment (Observatoire d’emploi)• Research institute affiliated to the Ministry of Cooperation (Institut d’Economie
Quantitative)• Technical staff of Ministries of Education and Higher Education
• Final integrating summary: MILES report
Methodology: MILES framework
Macro-economic (coop with Institut d’Economie Quantitative IEQ in Tunisia) • Computable General Equilibrium model, programmed in coop between DEC (the
Development Economics Research Group at the World Bank) and IEQInvestment climate (coop with IEQ): • Investment Climate Assessment Survey 2006Labor Market (coop with Observatoire d’Emploi et des Qualifications ONEQ) : • Panel tracer survey of university graduates & analysis & separate reports I and II • Tracer survey of microcredit recipients & analysis & separate report• Technical Note, assessing Tunisian portfolio of Active Labor Market Policies (ALMPs)
and presenting international Best Practice• Process Evaluation of public Employment ServicesEducation (coop with Min Employment and Min Education and Training)• Vocational Education and Training tracer survey & analysis• PISA (Program for International Student Assessment) 2006 micro-data descriptive
and econometric analysisSocial Protection: • Review of Labor Code• Technical Note (confidential) on Unemployment Insurance, simulation of costs
Findings: The main constraints are…
LABOR DEMAND
-Restricted access
to capital (collateral
and cost)
-Restricted access
to formal markets:
costly licensing for firms,
professional services
- Public sector wage and
security premium
-One of world’s most
restrictive firing laws
(need to ask permission
for individual layoff)
-Labor Inspection +
tax inspection
intrusive and highly discretionary
LABOR SUPPLY
-Youth bubble with
no reaping of
demographic dividend
-Edu system unresponsive
to labor market (historic
budgeting , wage distortions,
professors + teachers strong
interest group)
-Some technicians in scarce
supply, some graduates in
over-supply
- Difficulty to migrate
optimally: national
qualifications do
not translate
LABOR MARKET
Labor Institutions
and Regulations-Restrictions on wage flexibility:
Collective wage scales by edu level+seniority
- protection focus on jobs opposed to income:
no unemployment insurance to speak of
-54% of working people have no contract
-Share of fixed term contracts high
Matching of
Demand and Supply
- Queuing for desirable public sector
jobs and jobs with collectively agreed wage
-Employment Services overwhelmed:
no case management, little outsourcing
- Access to data difficult
Results: Where has the MILES influenced policy so far?
General Equilibrium Model (Macro) and Technical Note on ALMP (Labor Market):• -> Decree 349-2009 completely re-structures portfolio of Active Labor Market Policies
(ALMP)• introduces access conditionalities for both beneficiaries and employers• Introduces two ALMP which are strictly tailored to the employer and conditional
on an offer made• Employment Services mainstream Monitoring & Evaluation of ALMPs
• -> Ministry of Employment develops a pilot to expand Childcare through re-trained unemployed women
Process Evaluation of public Employment Services & Technical Note (Labor Market):• -> Decree 87-2010 introduces changes to the work processes of Employment
Services:• Case management for the long-term unemployed• Subcontracting to the private and third sectors
Panel tracer survey of university graduates & analysis (Labor Market/ Education)• -> Circulaire and Arrete of Ministries of Employment and Higher Education, 2009 ,
establish “Business Plan Competition for Students”, and Business Plans for Start-Up Companies as a valid Thesis Topic
Results: Where has the MILES changed the policy dialogue – for future measures?
LABOR DEMAND
-Private Sector DPL
addresses access to
finance
-No new dialogue on
access to formal markets
- No new dialogue on
public sector premium
-Presidential program and
Credit package (DPL)
foresee revising hiring
& firing dispositions
LABOR SUPPLY
-Higher Education law
allows more autonomy
for universities
-Decrees need to implement
-New competency-based
National Qualifications
Framework: need to implement
-Credit package (DPL)
foresees analytical work
to establish comparability
of Tunisian and European
Qualifications for
optimal migration
LABOR MARKET
Labor Institutions
and Regulations-protection focus on jobs opposed to income:
-Presidential program foresees revising
employment legislation,
-Credit Package (DPL) foresees evaluation
and reform of safety net of
redundant workers
Matching of
Demand and Supply
-Employment Services:
Credit Package addresses work processes
and subcontracting
- addresses access to data
of National Institute of Statistics
Building the policy dialogue
Instrument Definitions:• MILES = framework for Employment Analysis (Macro, Investment, Labor Market,
Education, Social Protection)• ESW = Economic and Sector Work (analytical studies)• TA = Technical Assistance (“consultancy” to the government, can be paid or un-paid)• IL = Investment Loan, a traditional loan package that finances concrete outputs, e.g.
schools, books, computers• DPL = Development Policy Loan, a credit package that offers non-earmarked budget
support in exchange for a series of reform measures Sector Definitions: • Edu = education• PSD = private sector development• FIN = financial sector
ESW (MILES)
TA & pilot
Supply-side
(Edu) IL
Labor Market
DPL series
Demand -(PSD/FIN)
DPL
Building the policy dialogue
Start by providing proof:• Programmatic ESW 2002-06• Creation of solid data and evidence base: graduate tracer survey, microcredit ALMP
tracer survey, VET tracer survey, ICA, CGE model• Capacity-building ‘on the job’: strong client co-operationTake one pilot operation forward to demonstrate results: • Client desire to reform ALMP portfolio and evaluate results• Pilot experience of Business Plan Thesis Competition (TA) for last year students.
Randomized experiment in order to allow rigor.• Results give good counterparts more profileGo ‘reform’ to tackle deeper constraints: • Client has recognized need for action, and ability of Bank to deliver• Employment = presidential top priority• Reform-minded counterpart has profile to champion• Demand for Employment DPL to implement reform actionsCreate momentum with help of partners:• Employment DPLs part of 5 year programmatic operations in coop with EU
ESW (MILES)
TA & pilot
Supply-side
(Edu) IL
Labor Market
DPL series
Demand -(PSD/FIN)
DPL
The Employment DPL series: Timing, instrument and partners
Client demand is very clear:• Client asks for long-term engagement, and for short-term funding• Funding volume commensurate with reform measures and crisis• Prefers DPL over investment loan: country procedures, package• Client explicitly asks WB and EU to partner
The final programmatic package responds: • Engagement over 5 years• First two years: two separate, but linked, World Bank DPLs• Last three years: EU programmatic grant• Matrix of reform measures over five years jointly elaborated with client and EU• Short term: institutional modernization employment services, pilot ALMPs,
regulation of migration intermediators, setting up commission for labor market reform
• Long term: implementing recommendations of the new commission for reform of (i) labor code (hiring, firing, collective wages) and (ii) introduction of unemployment insurance