Archive for August, 2013

Education Attainment, Further Female Participation & Feminization of Labor Markets in Arab Countries

August 25, 2013

By Fatima-Zohra Filali Adib, Ahmed Driouchi and Amale Achehboune

Policy Brief:

The current paper analyzes the integrated supply chain starting from education enrollment and ending with labor markets with focus on drop-out rates in the context of Arab economies. It uses descriptive statistics and regression analysis aiming at linking education and access to labor markets for women in comparison with men while benchmarking with the economies of Eastern and Central Europe (ECE).

The attained results show that while Arab countries have an increasing trend in enrollment, they have a decreasing pattern in drop-out from school, for both genders at all education levels. Out-of-school rates for primary education for females have been decreasing from 15.3% to 13.8% in the past four years. As of 2011, there were 14.53% male out of school in comparison to 18.94% female in the Arab states. However, while the amount of decline of female out of school rate is nearly 4% over three years, the corresponding level for male is hardly 1%. This is in line with the findings of authors who acknowledged the decrease of the gender gap in  education in the Arab world. Out-of-school rates for males and females are now closer than this was the case few years ago. In tertiary institutions, the trend has been moving towards more schooling for women than for men. Reverse gender gap has started to show up in some countries. Therefore, at all levels, women are more present in schools and statistics show a significant decrease in the gap between genders.

Labor participation rates for females have been slightly decreasing in ECE in contrast with Arab countries. Running regressions using the square of the independent variables only shows quadratic relationships. Therefore, U-shaped type of association between labor market and education is present in some cases. A more accurate observation is that this relationship is mainly associated with females. In Morocco, the U-shaped trend was prevalent for males since the coefficient is both significant and negative. Just like for the simple linear regressions, the largest coefficients are associated with the UAE followed by Jordan.

Given the current economic situation of the Arab world, the feminization of the job market is progressing and is not a choice but a consequence of education. In order to develop the economies, Arab countries need to enhance the contribution of their human resources with the involvement of more women starting with enrollment and drop-out minimization. But as labor markets require skilled human resources, both public and private sectors in Arab economies increasingly need educated women. This is why education is gradually becoming the most important mean for the promotion of more females in accessing labor markets. In the present research, the average schooling years of Barro and Lee (2010) is used as a proxy for the educational level. The effect of its change on labor participation shows how feminization is induced by education. While education positively contributes to increasing labor participation for females in the Arab countries, it did not seem to be significant in the case of Central and Eastern European economies as more women are already in the job market.

Such trends have to be enhanced through enrolling more girls in education and creating more incentives to ensure the attainment of higher level of knowledge with the opening of labor markets to talents.


Structural Change in MENA Remittance Flows

August 5, 2013

By George S. Naufal and Ismail H. Genc


Policy Brief:


Blessed with generous natural endowments of oil and gas, but lacking an economically and educationally suitable indigenous population, the Gulf Cooperation Council (GCC) countries[1] have turned to foreign workers to satisfy the labor demand. Initially the source countries were fellow Arabs from the MENA region due to cultural, religious and geographical proximity. Given that the GCC is among top remitters in the world, this policy resulted in the flow of tremendous sums of income to labor sending countries in the MENA region. GCC employment policy however has changed over time shifting the interest in hiring to mainly the Indian Subcontinent.[2] We, in fact, find in our study[3] that a gradual but permanent shift in the direction of remittances occurred in early 1990s depriving countries such as Egypt of a significant source of income through overseas employment, especially that of the youth.


Our study does not directly analyze the employment issues in the labor source countries, in particular those in the MENA region. But it stands to reason that these countries have long ignored and/or failed to cope with the actual implications of the GCC labor policy shift. Naturally, labor exporting countries should have taken timely precautions to eliminate economic hardships, with likely significant social implications. However, large remittance inflows allowed receiving countries to avoid real labor market reforms. Unfortunately, the resultant impact of the aforementioned problems rendered their solutions intractable. The stress piled up on their citizens and governments. Eventually, the situation came to a full blown social explosion in 2010, toppling the long running dynasties in some countries in the Middle East. Obviously, a more focused study on the causes and effects of labor sending countries’ employment policies is needed to more precisely shed light on the impact of the implied policy failures. Yet, our study aims at pointing to a relationship between the shift in the direction of remittance flows in the MENA region and likely employment, and eventual political consequences.

[1] The GCC countries are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia (KSA) and United Arab Emirates (UAE).

[2] To such countries as India, Bangladesh, Pakistan and the Philippines.

[3] Naufal, G. S. and I. H. Genc (2013) “Structural Change in MENA Remittance Flows,” IZA Discussion Paper Series IZA DP No. 7485, (July).