nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2017‒04‒30
sixteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. The Impact of Early Marriage on Women’s Employment in the Middle East and North Africa By Ragui Assaad; Caroline Krafft; Irene Selwaness
  2. Double squeeze on educational development: land inequality and ethnic conflict in Southeastern Turkey By Oyvat, Cem; Tekgüç, Hasan
  3. Transitions in Late-Life Living Arrangements and Socio-economic Conditions of the Elderly in Egypt, Jordan and Tunisia By Aurora Angeli; Marco Novelli
  4. A Macroeconometric Model of Turkey: Impact of Exchange Rate Shocks Under a High International Borrowing By Durmus Ozdemir; Mustafa Kemal Gündoğdu
  5. Rural-Urban Migration and Income Disparity in Tunisia: A Decomposition Analysis By Mohamed Amara; Hatem Jemmali; Mohamed Ayadi
  6. Reforms and physicians’ status in Turkey: Distribution of OOP Health Expenditures for Physicians and Hospitals By Burcay Erus
  7. Labor Market Effects of Pension Reform :an overlapping genenrations general equilibrium model applied to Tunisia By MOUNA BEN OTHMAN; Mohamed Ali MAROUANI
  8. A CGE Analysis of Pakistan-Turkey Free Trade Agreement By Ali, Ashfaque
  9. Is Value added Tax Progressive? Evidence from Egypt using a CGE Model By Abeer Elshennawy
  10. Israel; 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Israel By International Monetary Fund.
  11. Effects of reforms and supervisory organizations: Evidence from the Ottoman Empire and the Istanbul bourse By Elmas Yaldiz Hanedar; Avni Önder Hanedar; Ferdi Çelikay
  12. Analyse des canaux de transmission de la politique monétaire au Maroc By BENNOUNA, Hicham; LAHLOU, Kamal; MOSSADAK, Anas
  13. Evaluation de l’impact de l’Initiative Nationale pour le Développement Humain (INDH) sur la pauvreté en milieu rural au Maroc, une étude en enquête panel de ménages By Mohamed Benkassmi; Touhami Abdelkhalek; Fouzia Ejjanoui
  14. Sanayi Ulkelerindeki Kuresel Doviz Kuru Savaslarinin Gelisme Yolundaki Ulkelere Etkisi By Yilmaz Kilicaslan; Ilhom Temurov
  15. Kisa Vadeli Sermaye Hareketlerinin Doviz Kuru Iliskisi ve Turkiye icin Tobin Vergisi Tartismasi By Ibrahim Organ; Erdal Berk
  16. Kredi Hacmi Ile Cari Acik Arasindaki Iliski: Turkiye Icin Dinamik Bir Analiz By Pinar Karahan; Nilgun Caglairmak Uslu

  1. By: Ragui Assaad (University of Minnesota); Caroline Krafft; Irene Selwaness
    Abstract: Marriage is a central stage in the transition to adulthood in the Middle East and North Africa (MENA). This paper builds on the existing literature on the effect of marriage on women’s employment in MENA. Besides examining how different types of work are affected by early marriage (defined as marriage by the median age of marriage) in a multivariate setting, the contribution of this paper is to endogenize the marriage decision using an instrumental variable approach. We find that marriage by the median age reduces the probability of working for women by 47 percent in Jordan, 33 percent in Tunisia and 16 percent in Egypt. Much of the effect is due to a reduction in the probability of private wage work, which is reduced by 76 percent in Jordan, 57 percent in Tunisia and 40 percent in Egypt. Differences emerge across the three countries in the extent to which self-employment after marriage is available to women to compensate for the reduction in wage employment opportunities.
    Date: 2017–04–23
  2. By: Oyvat, Cem; Tekgüç, Hasan
    Abstract: This paper examines two structural factors that have restricted educational development in Southeastern Turkey: land inequality and ethnic fractionalization/conflict. Until recently a semi-feudal structure persisted in the region with politically and economically powerful tribal leaders and large landowners called ağas. At the same time, the region has been the site of an ethnic conflict, which has been ongoing as an armed insurgency for over 30 years between Kurdish insurgents and the Turkish State. Using a province-level data set, we test the impact of land inequality, conflict and ethnicity on education investment and school enrollment for the period 1970-2012. We find that higher land inequality reduces the school enrollment rates due to budget constraints imposed on poorer households. However, the economic and political power of ağas in the region does not block education investments. Moreover, we find that although the armed conflict in the region did not directly hinder education investments, it did reduce school enrollment rates at middle and high school levels, while increasing enrollment at the primary school level. Finally, we find that provinces with higher percentages of Kurdish population received less education investment even after controlling for conflict and land inequality. These results suggest that high land inequality and the Turkish State’s neglect of Kurdish areas were the important factors behind Southeastern Turkey’s educational underdevelopment, while the conflict had mixed effects on the education in the region.
    Keywords: land distribution; agrarian structures; conflict; development; education
    JEL: D74 I24 O17 Q15
    Date: 2017–04–24
  3. By: Aurora Angeli (University of Bologna); Marco Novelli
    Abstract: Middle East and North Africa’s demographic trends reveal together a growing ageing population and an exceptional growth of the youth population. Increasing elderly population leads to significant consequences for the cost and organization of health systems. The rise in life expectancy has changed the arrangement of multigenerational families; relationships in ageing families have become more unstable and less predictable. In this paper, we investigate - in a gender and geographic perspective – differences in the socio-economic situation of the elderly and the determinants of late-life living arrangements in Egypt, Jordan and Tunisia starting from Labor Market Panel Surveys. Results are in line with both the different countries’ stages of the demographic transition and welfare state coverages. The family continues to be the basis for support to older people, as in general in the Arab area. A relevant socio-political group, calling for policy interventions, is represented by the elderly living alone.
    Date: 2017–04–20
  4. By: Durmus Ozdemir; Mustafa Kemal Gündoğdu
    Abstract: This paper examines the Marshall–Lerner condition under the simultaneity of exports and import flows in the Turkish economy. Due to the high interdependence between ratios of export and import flows to GDP, the traditional version of the Marshall–Lerner condition is not sustained. In the case of Turkey, the long-term estimations of the price elasticities of exports and imports, and the respective cross elasticities, lead us to conclude that currency devaluation would, in the long run, improve the balance of trade. Macroeconometric modeling Currency devaluation improve the the balance of trade in Turkish economy
    Keywords: Turkey, Macroeconometric modeling, Growth
    Date: 2016–07–04
  5. By: Mohamed Amara; Hatem Jemmali (University of Tunis ElManar); Mohamed Ayadi
    Abstract: Since the 1990s, massive migration from the marginalized and unprivileged rural areas to small and big towns has been one of the most dramatic and noticeable demographic changes in Tunisia. Even though it has been the focus of abundant research over the recent decades, no study has focused on the earnings differentials between rural-urban migrants and rural stayers. This paper may be the first to investigate such differentials in the Tunisian context. It uses firstly the ELL's methodology to impute into the 2004 census data the per capita expenditures from the 2005 household survey. Then, a decomposition analysis of the welfare gap between migrants and non-migrants is performed using the Oxaca and Blinder's method. It also investigates the main determinants that drive such disparities in order to evaluate how economic and social-demographic factors contribute to the earning gap between the two groups. Our findings indicate that even though some migrants incur welfares losses, rural-urban migration increases on average the welfare of migrants. They show as well that the welfare gaps between migrants and non-migrants are mainly due to the differences in endowments. Education is found to exert the strongest influence on welfare differences and big cities, more specifically the Greater Tunis, is found to attract massively the skilled migrants and enjoy the benefit of agglomeration economies.
    Date: 2017–04–20
  6. By: Burcay Erus (Bogazici University)
    Abstract: Turkish health care reforms brought about significant changes regarding the way physicians practice. Dual-time practice, which was very common among public hospital physicians, was gradually banned. While public insurance coverage has been extended to private hospitals, private practices have been left out. The resulting system rendered physicians more attached to the hospitals, public and private, and decreased their independence. This study explores the change in out-of-pocket payments to physicians and hospitals from 2003, the year reforms started, to 2013. We use a finite mixture model to examine changes in small and large expenditures. Our findings show a steep drop in payments to physicians both for small and large sums of payments. For hospitals, the drop in the size of the payments appear to be compensated by an increase in the number of households making a payment.
    Date: 2017–04–25
    Abstract: Capture the interactions among pension reform, labor market and inter-generational distribution issues We use an overlapping generation general equilibrium model. The impact on the labor market is addressed on the aggregate level but also y distinguishing different age categories. Results: Increasing the contribution rate is the worst solution in terms of welfare and unemployment, particularly of the youth.Postponing the retirement age is the best option and it does not entail an increase of youth unemployment contrary to the traditional wisdom. The middle-aged are those who benefit the most from the reforms in terms of welfare.
    Keywords: TUNISIA, Labor market issues, General equilibrium modeling
    Date: 2016–07–04
  8. By: Ali, Ashfaque
    Abstract: This paper investigates the possible impacts of Pakistan-Turkey free trade agreement (Pak-Turk FTA) on various sectors of the economy in the two countries under four different possible FTA scenarios by using computable general equilibrium model GTAP. Global Trade Analysis Project (GTAP) model has been extensively used in FTAs and other Trade related studies to evaluate the economy-wide potential impact of economic policy reforms. Current study uses the GTAP database7 which includes; 57 tradable commodities and 113 regions across the world. Our findings suggest that; Turkey is more beneficial from Free Trade Agreement as compared to Pakistan .Overall impact of trade liberalization is favorable for both economies, but liberalization of protected sectors may prove to be unfavorable for the economy in case of Pakistan. And there is a huge potential for bilateral trade in textile and chemical sector.
    Keywords: Computable General Equilibrium (CGE) Analysis, Free Trade Agreement (FTA), Pakistan, and Turkey.
    JEL: F10 F14 F17
    Date: 2017–04–14
  9. By: Abeer Elshennawy
    Abstract: The objective is examine the effect of value added tax in Egypt on income distribution and inflation CGE model Contrary to the experience of many countries, the value added tax was found to be marginally progressive
    Keywords: Egypt, General equilibrium modeling, Macroeconometric modeling
    Date: 2016–07–04
  10. By: International Monetary Fund.
    Abstract: Israel is enjoying strong economic growth, estimated at 4 percent in 2016, supported by strong domestic demand—partly due to high vehicle sales ahead of a tax increase—and an export rebound. Unemployment declined to 4.4 percent in Q4 2016 and wage increases have picked up. Nonetheless, inflation remained below the 1–3 percent target range of the Bank of Israel (BOI), reflecting external factors and government measures to reduce the cost of living. The BOI has held the policy rate at 0.1 percent since February 2015 and stated that monetary policy in Israel will remain accommodative for a considerable time. Strong revenues contained the fiscal deficit to 2.1 percent of GDP in 2016 and the public debt ratio declined to 62 percent of GDP.
    Keywords: Article IV consultation reports;Economic conditions;Economic growth;Fiscal policy;Fiscal reforms;Monetary policy;Bank supervision;Housing;Macroprudential Policy;Economic indicators;Balance of payments statistics;Debt sustainability analysis;Staff Reports;Press releases;Israel;
    Date: 2017–03–28
  11. By: Elmas Yaldiz Hanedar (Yeditepe University, Faculty of Economics and Administrative Sciences, Istanbul, Turkey); Avni Önder Hanedar (Sakarya University, Faculty of Political Sciences, Sakarya, Turkey and Dokuz Eylül University, Faculty of Business, Izmir, Turkey); Ferdi Çelikay (Eskisehir Osmangazi University, Faculty of Economics and Administrative Sciences, Eskisehir, Turkey)
    Abstract: Inefficiencies in fiscal and monetary systems of the Ottoman Empire led to higher debt burden over time and the bankruptcy for the Ottoman state in 1875. To deal with these inefficiencies, reforms were implemented, as supervisory organizations were established during the default period. We ask how investors traded at the Istanbul bourse evaluated the outcomes of these reforms and organizations. We manually collect data on price of the General Debt bond from 1873 to 1883. Using the GARCH methodology, we examine the volatility jumps in return of the bond due to the reforms and supervisory organization in the Ottoman Empire. The volatility changes are indicators for risk perceptions of the investors. Our empirical results support that investors positively responded to foundation of the Ottoman Public Debt Administration and the acceptance of gold standard, heralding the persistent decrease in the risk premia over time. The Ottoman case is instructive for the understanding of today’s economic situation in emerging markets such as Greece, while we could argue that long-lived and comprehensive measures with foreign creditors’ supervision on fiscal and monetary systems matter more for investors’ perceptions. No empirical research studies the impacts of the reforms and supervisory organizations on the Istanbul bourse, as this large dataset has never been used before.
    Keywords: Reforms, Financial control organizations, Moratorium, the Istanbul bourse, Crises, GARCH.
    JEL: G1 N25 N45
    Date: 2017–04
  12. By: BENNOUNA, Hicham (Bank Al-Maghrib, Département de la Recherche); LAHLOU, Kamal (Bank Al-Maghrib, Département de la Recherche); MOSSADAK, Anas (Université Mohammed V de Rabat)
    Abstract: La compréhension de la transmission des décisions de politique monétaire présente un enjeu majeur pour les Banques centrales vu qu’elle permet d’informer sur leur capacité à orienter les sphères financière et réelle par le biais des instruments dont elles disposent. Dans cette perspective, ce travail présente une analyse des canaux de transmission de la politique monétaire au Maroc, moyennant d’une part, l’évaluation de l’environnement de mise en œuvre de la politique monétaire, et d’autre part, l’estimation de deux modèles SVAR et NKM permettant de mesurer empiriquement l’amplitude des réactions aux chocs monétaires. L’analyse du cadre institutionnel et de l’environnement macrofinancier révèle qu’en dépit de la persistance d’un certain nombre de rigidités, les réformes engagées durant la dernière décennie ont consolidé les prérequis permettant de renforcer l’effectivité des canaux de transmission. Sur le plan empirique, les résultats ont montré que la politique monétaire est en mesure d’influencer l’évolution des principaux agrégats macroéconomiques notamment via les canaux taux d’intérêt et crédit.
    Keywords: Politique monétaire; canaux de transmission; environnement macroéconomique; SVAR; NKM
    JEL: E50 E52
    Date: 2016–07–01
  13. By: Mohamed Benkassmi; Touhami Abdelkhalek; Fouzia Ejjanoui (l’Université Mohamed V)
    Abstract: In this paper, we conduct an impact evaluation of a great Moroccan development program of Community Driven Development type, namely the National Human Development Initiative (INDH), which aimed, among others, at fighting against rural poverty. We use data from three waves (2008, 2011 et 2013) of a household panel survey. Given the treatment status identification strategy of rural communes, we have chosen and used the impact evaluation approach of Regression Discontinuity Design (RDD). We estimated the impact of this program on several output indicators: economic outputs (income, consumption and wealth), human development outputs (education and health), multidimensional poverty indicators and self-assessed poverty status indicators. The most important impacts are found for economic outputs, between 2008 and 2011. The program effects seem to dissipate greatly between 2011 and 2013. For human development and multidimensional poverty indicators, our results show a general improvement in 2011 and 2013, in comparison with the reference year (2008). However, those improvements concern both the rural communes targeted, as well as those not targeted by the evaluated program. On the other hand, subjective poverty indicators have deteriorated significantly over time. One should note that the RDD method’s estimates depend strongly upon the selected bandwidth, making certain results not very robust. In addition, several rural control communes, in the sample, have been targeted by the INDH since 2011. Our findings recommend that the INDH, as a CDD, should be improved at the national and local levels coordination, as well as through a greater concentration on key objectives.
    Date: 2017–04–24
  14. By: Yilmaz Kilicaslan (Anadolu University, Department of Economics); Ilhom Temurov (Anadolu University, Department of Economics)
    Abstract: This paper examines the relation between import substitution, labour productivity and industrial competitiveness. More specifically this paper tests if the import substitution enhances both labour productivity and competitiveness in Korean and Turkish manufacturing industries. The data used in the analysis are obtained from UNIDO Industrial Demand Supply (2013) and UNIDO Industrial Statistics (2013) databases and cover the period of 1981-2001. Our results show that Turkish economy has really left import substitution after 1980. However, we found significant share of import substitution in total production in professional and scientific equipment, transportation equipment, electrical machinery, miscellaneous petroleum products, industrial chemicals industries and petroleum refineries in Korea especially in the 1990s. The results based on unbalanced dynamic panel data estimations showed that import substitution did not enhance labour productivity in manufacturing industry of both Korea and Turkey. However, we found that import substitution affects industrial competitiveness positively in both Korea and Turkey. Apart from the positive impact of import substitution on competitive-ness, we also found in this study that while Korean manufacturing industry competitiveness is closely associated with labour productivity, competitiveness of Turkish manufacturing industry depends on the factors such as exchange rates, wage differentials rather than labour productivity.
    Keywords: productivity, competitiveness, import substitution, manufacturing, Turkey, Korea
    JEL: L60 O12 O25 O47
    Date: 2015–12
  15. By: Ibrahim Organ (Pamukkale University, Department of Public Finance); Erdal Berk (Pamukkale University, Department of Public Finance)
    Abstract: Calismada spekulatif amacli sermaye hareketlerini kisitlamaya yonelik olarak ortaya atilan Tobin vergisinin etkinligi ve Turkiye'de uygulanabilirligi arastirilmistir. Arastirmanin temelini, gelismekte olan ulkelerin makroekonomik dengeleri uzerinde buyuk etkilere sahip olan kisa vadeli sermaye hareketlerinin ulastigi buyukluk olusturmakta ve calismada bu sermaye hareketleriyle ulkelerin makroekonomik istikrar ve buyumenin temel politika araclarindan biri olan doviz kurlarinda olusan ciddi istikrarsizliklar esas alinmaktadir. Turkiye ornegi uzerinde kisa vadeli sermeye hareketleri ile doviz kuru arasindaki iliski ampirik olarak 2005:M1-2014:M12 donemi icin incelenmistir. VAR analizi kullanilarak yapilan calismada bu iliskinin etki-tepki fonksiyonlari analiz edilerek, Tobin vergisinin etkinligi tartisilmistir.
    Keywords: Kisa Vadeli Sermaye Hareketleri, Doviz Kuru, Tobin Vergisi, VAR Analizi
    Date: 2016–04
  16. By: Pinar Karahan (Anadolu University, Department of Economics); Nilgun Caglairmak Uslu (Anadolu University, Department of Economics)
    Abstract: Turkiye'nin en onemli makroekonomik sorunlarindan biri, sureklilik arz eden cari islemler acigidir. Turkiye ekonomisinde kredi hacmi ozellikle kuresel finans krizinden sonra cari islemler aciginin temel belirleyicileri arasinda gosterilmektedir. TCMB, 2008 yili kuresel finans krizi sonrasi yasanan hizli kredi genislemesinin cari dengeyi olumsuz yonde etkilemesine karsilik, kredi genislemesini yavaslatarak finansal istikrarin saglanmasina yonelik politika uygulamaya baslamistir. Bu calismada, Turkiye'deki mevduat bankalarinin ozel sektore kullandirdigi krediler ile cari islemler acigi arasindaki iliski, 2005:Q1-2015:Q3 donemi verileri kullanilarak, Sinir testi yaklasimi, ARDL modeli ve Kalman Filtresi yaklasimiyla analiz edilmistir. Sinir testi sonuclari cari islemler acigi ile kredi hacmi arasinda esbutunlesme iliskisinin oldugunu; ARDL modeli sonuclari kredi hacminin cari islemler acigini kisa ve uzun donemde pozitif ve istatistiksel olarak anlamli etkiledigini gostermistir. Kalman Filtresi modeli sonuclari ise kredi hacminin cari islemler acigi uzerindeki etkisinin kuresel finans krizi doneminde azaldigini ortaya koymustur.
    Keywords: Cari Acik, Kredi Hacmi, Sinir Testi, Kalman Filtresi
    JEL: E42 E51 F32 C32
    Date: 2016–10

This nep-ara issue is ©2017 by Paul Makdissi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.