Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/124924 
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers No. 9404
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Labour market constraints constitute prominent obstacles to firm development and economic growth of countries located in the Middle East and North Africa (MENA) region. This paper aims at examining the implications of firm characteristics, national locations, and sectoral associations for the perceptions of firms concerning two basic labour market constraints: labour regulations and labour skill shortages. The empirical analysis is carried out using firm-level dataset sourced from the World Bank's Enterprise Surveys database. A bivariate probit estimator is used to account for potential correlations between the errors in the two labour market constraints' equations. We implement overall estimations and comparative cross-country and cross-sector analyses, and use alternative estimation models. The empirical results reveal some important implications of firm characteristics (e.g., firm size, labour compositions) for firm perceptions of labour regulations and labour skill shortages. They also delineate important cross-country and cross-sector variations. We also find significant heterogeneity in the factors' implications for the perceptions of firms belonging to different sectors and located in different MENA countries. This paper provides policy-makers with information needed in the design of labour policies that attenuate the impacts of labour market constraints and enhance the performance of firms and the long-run economic growth.
Subjects: 
labour regulations
labour skill shortages
labour market constraints
bivariate probit model
MENA region
JEL: 
J20
K20
K31
O53
Document Type: 
Working Paper

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