| Abstract: |
We tackle the problems of labour market segmentation and low occupational
mobility in MENA countries in relation to prospective formalisation policies.
First, we provide an overview of the informal economy in its taxonomy,
coverage and stylised facts, and drivers, across six MENA countries. Second,
using longitudinal microdata from Labor Market Panel Surveys and COVID-19 MENA
Monitors, we apply transition matrices and multinomial logistic regressions to
analyse workers? occupational mobility according to their pre-existing status,
age cohort, gender and other demographics. We find persistent segmentation and
weak 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. Third, assessing the existing formalisation
policies encapsulating distinct stick and carrot strategies, and business
versus worker targeting, we find rather modest impacts. We submit that
promoting social and solidarity enterprises, and extending microfinance to
informal enterprises holds a promise for the creation of formal, decent jobs. |