nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2021‒07‒12
twelve papers chosen by
Paul Makdissi
Université d’Ottawa

  1. The Making of a Lost Generation: Child Labor among Syrian Refugees in Turkey By Dayioglu-Tayfur, Meltem; Kirdar, Murat G.; Koc, Ismet
  2. Food subsidies and cash transfers in Egypt: Evaluating general equilibrium benefits and trade-offs By Breisinger, Clemens; Kassim, Yumna; Kurdi, Sikandra; Randriamamonjy, Josée; Thurlow, James
  3. Modeling the Impact of Corruption, Degree of Freedom to Invest and Democracy on Domestic Investment: Evidence from MENA Countries By Bakari, Sayef; Benzid, Lamia
  4. Understanding Saudi Private Sector Employment And Unemployment By Farah Hani; Michael Lopesciolo
  5. Keeping Refugee Children in School and Out of Work: Evidence from the World's Largest Humanitarian Cash Transfer Program By Aygün, Aysun Hızıroğlu; Kirdar, Murat G.; Koyuncu, Murat; Stoeffler, Quentin
  6. Towards the Reversal of Poverty and Income Inequality Setbacks Due to COVID-19: The Role of Globalisation and Resource Allocation By Ofori, Isaac Kwesi; Armah, Mark Kojo; Asmah, Emmanuel E.
  7. Does Knowledge Empower? Education, Legal Awareness and Intimate Partner Violence By Erten, Bilge; Keskin, Pinar
  8. COVID 19: Socio-economic context of companies after containment and the fiscal and social support measures implemented (Case of MOROCCO) By Hind Bouzekraoui
  9. The role of remittances in times of socio-political unrest: Evidence from Tunisia By Farid Makhlouf; Refk Selmi
  10. Impact of tax reforms in applied models: which functional forms should be chosen for the demand system ? Theory and application for Morocco By Touhami Abdelkhalek; Dorothee Boccanfuso
  11. The Impact of Tax Revenues and Domestic Investments on Economic Growth in Tunisia By Mkadmi, Jamel Eddine; Bakari, Sayef; Othmani, Ameni
  12. Classification of heritage residential building stock and defining sustainable retrofitting scenarios in Khedivial Cairo By Hanan Ibrahim; Ahmed Z. Khan; Shady Attia; Yehya Serag

  1. By: Dayioglu-Tayfur, Meltem (Middle East Technical University); Kirdar, Murat G. (Bogazici University); Koc, Ismet (Hacettepe University)
    Abstract: Millions of children are forcibly displaced around the world, making child labor a serious risk. However, little is known about this topic due to the difficulty of finding representative datasets for this population and information on child labor. In this study, we use a representative dataset on Syrian refugees in Turkey, the largest refugee group in any single country, to examine the incidence of child labor and its determinants. The incidence of paid work is remarkably high among boys. While 17.4% of 12-14 year-olds are in paid employment, a staggering 45.1% of 15-17 year-olds receive payment. We find that paid work is positively associated with poverty, proficiency in Turkish, living in an industrialized region in Turkey, originating from rural areas in Syria and living in a household with a young, female, or less-educated head. Family composition matters more for girls' employment than boys'. Boys' (girls') employment increases if their father (mother) is alive – suggesting network effects. Being older at arrival is highly associated with child labor, indicating that difficulty with school integration drives children into employment.
    Keywords: child labor, forced displacement, Syrian refugees, paid work, migrants, Turkey
    JEL: J13 J15 J61 O15 O53
    Date: 2021–06
  2. By: Breisinger, Clemens; Kassim, Yumna; Kurdi, Sikandra; Randriamamonjy, Josée; Thurlow, James
    Abstract: Most Egyptians receive food subsidies, which are the cornerstone of the country’s social protection system. The government recently attempted to reduce subsidies, with limited success, and introduced a cash transfer program targeting the poor. We use a dynamic general equilibrium model of the Egyptian economy to evaluate the growth and distributional impacts of subsidy reforms and cash transfers. We find that the welfare of poor households would be enhanced by a smaller, but better targeted food subsidy program, and that, if the cost savings from reforms are channeled into investment, faster economic growth would eventually outweigh any short-term welfare losses. However, most of the gains from subsidy reforms accrue to nonpoor households. Combining subsidy reforms with cash transfers leads to the largest welfare gains for the poor, while leaving the welfare of nonpoor households largely intact. The latter is crucial to maintaining support for ongoing subsidy reform efforts.
    Keywords: EGYPT, ARAB COUNTRIES, MIDDLE EAST, NORTH AFRICA, social protection, cash transfers, subsidies, poverty, models, dynamic general equilibrium model, trade off, food subsidies
    Date: 2021
  3. By: Bakari, Sayef; Benzid, Lamia
    Abstract: This study examines the impact of corruption, investment freedom, and democracy on domestic investment in countries in the Middle East and North Africa. In order to achieve this, the GMM model was used to test the annual data from 2011 to 2017. The empirical results show that corruption has a negative impact on domestic investment, but the degree of investment freedom and democracy have a positive impact on domestic investment. One of the major contributions of this work is to assert the requirement to wheel more awareness to the direct link between corruption, governance, investment freedom, and domestic investment.
    Keywords: Corruption; Degree of Freedom to Invest; Democracy; Domestic Investment; MENA Countries
    JEL: E10 E22 H10 H50 O16
    Date: 2021
  4. By: Farah Hani (Center for International Development at Harvard University); Michael Lopesciolo (Center for International Development at Harvard University)
    Abstract: This paper analyzes the changes in Saudi employment and unemployment between 2009 and 2018 and argues that a supply-demand skill mismatch exacerbated by insufficient job creation, and prevalent Saudi preferences and beliefs about employment underpin the high unemployment problem that coexists with low Saudi employment in the private sector in the country.
    Keywords: Saudi Arabia, Employment, Unemployment, Occupations, Jobs
    JEL: J21 J23 J24
    Date: 2021–03
  5. By: Aygün, Aysun Hızıroğlu (Istanbul Technical University); Kirdar, Murat G. (Bogazici University); Koyuncu, Murat (Bogazici University); Stoeffler, Quentin (Istanbul Technical University)
    Abstract: This paper investigates whether unconditional cash transfers can keep refugee children in school and out of work. We raise this question in the unique context of Turkey, which hosts the world's largest refugee population (including 3.6 million Syrians). Refugees in Turkey are supported by the world's largest cash transfer program for refugees, the Emergency Social Safety Net (ESSN). We exploit a program eligibility criterion to identify the causal impacts of the ESSN program using a regression discontinuity design. The results show a large effect on child labor and school enrollment among both male and female refugee children. Being a beneficiary household reduces the fraction of children working from 14.0 percent to 1.6 percent (a decrease of 88 percent) and the fraction of children aged 6–17 not in school from 36.2 to 13.7 percent (a reduction of 62 percent). By unpacking the mechanisms at play, we show that ESSN cash transfers become a significant part of a household's income, substantially alleviate extreme poverty, and reduce a family's need to resort to harmful coping strategies. Investigating the reasons for children not attending school, we find that the beneficiary households become more likely to send children to school because the cash transfer addresses both the opportunity cost and direct cost of schooling— although the former is more important. The findings have important implications for the design of policies aimed at supporting refugee children at scale.
    Keywords: refugees, cash transfers, education, child labor, regression discontinuity design, program evaluation, Turkey
    JEL: F22 I21 I28 I38 J21 O15 O22
    Date: 2021–06
  6. By: Ofori, Isaac Kwesi; Armah, Mark Kojo; Asmah, Emmanuel E.
    Abstract: Policy recommendations for building resilient and all-inclusive societies post COVID-19 pandemic continue to dominate the media and research landscapes. However, rigorous empirical content backing such claims, particularly, on both poverty and income inequality, is hard to find. Motivated by the bleak outlook of the Middle East and North Africa (MENA) region, as driven primarily by the floundering hydrocarbon sector, vulnerable employment, and low foreign direct investment, we analyse the poverty and income inequality effects of globalisation and resource allocation in the region. Using data from the World Bank’s Poverty and Equity Database for the period 1990–2019, we provide estimates robust to several econometric techniques- the pooled least square, fixed effect, random effect, and the system generalized method of moments estimators to show that: (1) while economic globalisation reduces both poverty and income inequality, social globalisation matters only for income inequality in MENA; (2) economic globalisation is remarkable in reducing income inequality through resource allocation. Policy recommendations are provided in the light of the geopolitical fragility and rise in social globalisation of the region.
    Keywords: Economic Integration,Financial Deepening,GMM,MENA,Globalisation,Inequality,Poverty
    JEL: F14 F15 F6 I3 O53
    Date: 2021
  7. By: Erten, Bilge (Northeastern University); Keskin, Pinar (Wellesley College)
    Abstract: This paper uses an extension of compulsory schooling in Turkey to estimate the causal effects of education onwomen's legal awareness of laws thatwere designed to reduce gender inequality and prevent domestic violence. By implementing a regressiondiscontinuity design, we find that the reform-induced increase in female education improved legal awareness. Women exposed to the reform were more likely to have heard about the new laws and services through newspapers, journals, or books. However, despite these improvements in women's legal awareness, we find no evidence of a significant change in the risk of experiencing domestic violence or ability to quit abusive relationships.
    Keywords: legal knowledge, information acquisition, education, domestic violence, regression discontinuity
    JEL: J12 J16 I25
    Date: 2021–06
  8. By: Hind Bouzekraoui (UAE - Université Abdelmalek Essaadi, l'Ecole Nationale de Commerce et de Gestion Tanger)
    Abstract: More than a health pandemic, COVID-19 can now be described as a real economic crisis which will undoubtedly represent one of the most striking facts of the 21st century. Beyond the health and medical damage caused by this pandemic, the impact is no less for the world economy and the use of the word "Crisis" is no longer doubtful or questionable. Morocco, like many countries, proved his awareness about the magnitude of the effects of this crisis on the economic fabric, and was among the precursor countries to instore a panoply of support measures. These measures have concerned first of all the health side, but also and above all, tax side and social security on which our present article focuses more particularly. The preliminary objective of our article is first to expose the state of play of Moroccan companies among the particular situation of confinement, then to come back to the main fiscal and social measures put in place by the Moroccan authorities to counter the restrictive symptomatic effects of the COVID-19 crisis and avoid a cataclysmic state for the country's economy. Ultimately, to conclude, we present through our article, a critical analysis of the measures introduced by the competent authorities whose the boomerang effect is representing a real time bomb.
    Abstract: Plus qu'une pandémie sanitaire, le COVID-19 est désormais qualifiable d'une réelle crise économique qui représentera indéniablement l'un des faits les plus marquants du 21 ème siècle. Au-delà des dégâts sanitaires et médicaux qu'a engendré cette pandémie, l'impact n'en est pas moindre à l'égard de l'économie mondiale et l'usage du mot « Crise » n'est dorénavant plus chose contestable ou discutable. Conscient de l'ampleur des effets de cette crise sur le tissu économique, Le Maroc, à l'instar de plusieurs pays, était parmi les pays précurseurs à mettre en place une panoplie de dispositions d'accompagnement d'abord sanitaires mais aussi et surtout fiscales et sociales sur lesquelles se focalise plus particulièrement notre présent article. L'objectif préliminaire de notre article est d'exposer dans un premier temps l'état des lieux des entreprises marocaines à l'issue du confinement, de revenir ensuite sur les principales dispositions à caractère fiscal et social mises en place par les autorités marocaines pour contrer les effets astreignants symptomatiques de la crise COVID-19 et éviter un état cataclysmique pour l'économie du pays. En définitive, en guise de conclusion, nous présentons à travers notre article, une analyse critique des mesures et dispositions instaurées par les autorités compétentes dont l'effet boomerang y afférent représente une réelle bombe à retardement.
    Keywords: COVID-19,Crise économique,Entreprises maricaines,Mesures fiscales,Mesures sociales,Facilités bancaires,politique fiscale,Covid-19,facilités bancaires Covid 19,economic crisis,Moroccan companies,fiscal policy,social measures,banking facilities
    Date: 2021–06–10
  9. By: Farid Makhlouf (ESC Pau); Refk Selmi (ESC Pau)
    Abstract: The Tunisian political system is still in process of transitioning, causing high uncertainty and political instability. As remittances have long been perceived as a buffer against uncertainty surrounding unusual events, this study seeks to assess the role of remittances in times of rising socio-political unrest. To do so, we conduct an in-depth analysis of the behavior of remittances during troubled political transition. Specifically, detailed investigation of rescaled range(R/S) analysis to test whether remittances follow a long-memory process is carried out. Our findings tend to confirm the stable behavior of remittances. We can therefore characterize Tunisian migrants as regular customers in the future. This would affect positively both the balance of payments and the families who receive them. But this situation seems to be exogenous and is not related to the implementation of any policy to attract remittances. Hence the Paramount importance of designing a comprehensive strategy that enables remittances to play a more potential role in post-revolution periods and that renders emigration an integral part of growth strategies.
    Keywords: R/S analysis,Hurst Exponent (H),Fractal Analysis,Extensive remittances,Tunisia
    Date: 2021–06–17
  10. By: Touhami Abdelkhalek; Dorothee Boccanfuso
    Abstract: When researchers and policymakers conduct impact analyses of economic reforms, especially fiscal reforms, the specification of the household demand system becomes crucial. There is a trade-off between using demand systems simple to manipulate but less realistic and other systems that are more realistic but often more complex and difficult to estimate or calibrate. In this paper, we compare the results from two different demand systems: a simple one, the Cobb-Douglas (CD), and a more complex one, the Constant Difference Elasticity (CDE). We develop an hybrid method of estimation - calibration based on the estimation of the parameters and elasticities of a QUAIDS system and on the calibration of those of the CDE system using a cross-entropy approach. The estimates obtained are introduced into a micro-simulated partial equilibrium model to approximate the impact of the VAT reform on poverty measures in Morocco. We show that when the simulated shocks are moderate, the gain of using a CDE system instead of a CD system is marginal but, when these shocks are stronger, the differences become significant and increase. Then the use of these models can lead to different results when evaluating public policies and their impacts on poverty measures.
    Keywords: Demand systems, Estimation-calibration, Tax reform, Morocco
    JEL: C51 D12 I32 H31
    Date: 2021–06
  11. By: Mkadmi, Jamel Eddine; Bakari, Sayef; Othmani, Ameni
    Abstract: The aim of this work is to study the impact of tax revenues and domestic investments on social and economic well-being in Tunisia over the period 1976 – 2018. This study is based on co-integration analysis and Vector Error Correction Model. Empirical results indicate that in the long run domestic investment has a negative impact on economic growth, while the impact of tax revenues is positive. Also, results indicate that domestic investment and economic growth influence positively tax revenues. However, Tax revenue and economic growth don’t have any effect on domestic investment in the long run. It is seen that in Tunisia the strategy policy of tax revenue is not safe for domestic investment and the strategy policy of domestic investment is not safe for economic growth. Therefore, we should encourage immediate intervention to take the necessary measures before the situation causes a greater disaster.
    Keywords: Tax revenue; Domestic investment; Economic growth, Tunisia
    JEL: E62 H21 H26 O47 O55
    Date: 2021–02
  12. By: Hanan Ibrahim; Ahmed Z. Khan; Shady Attia; Yehya Serag
    Abstract: This study aims to develop an integrated classification methodology for retrofitting that preserves both energy use and cultural value aspects in hot climates, especially, in North Africa, as a hot zone, which lacks retrofitting initiatives of built heritage. Despite the number of existing methods of classification for energy purposes, little attention has been paid to integrate the perceptions of cultural values in those methods. The proposed methodology classifies heritage building stocks based on building physical characteristics, as well as heritage significance levels, and then later integrates the outcomes into a matrix to propose sustainable retrofitting scenarios based on three dimensions, i.e. heritage value locations, types, and heritage significance level. For validation, the methodology was applied to the heritage residential building stock along with a microscale analysis on a building in Khedivial Cairo, Egypt. The findings include extracting twelve building classes, providing a reference building for each class, and a detailed catalogue of the extracted reference buildings that includes retrofitting scenarios for creating energy models. The originality of this work lies in integrating cultural values in a building classification methodology and providing a list of sustainable retrofitting scenarios for reference buildings. The findings contribute to fill the gap in existing building classifications, more specifically in hot climates.
    Keywords: Built heritage; Cultural values; Downtown Cairo; Energy retrofitting; Hot climates
    Date: 2021–01

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