TUNESS Chart of the Week (TCW), Friday Jan 25, 2013
As the fundamentals of the labor market in Tunisia continue to deteriorate, we study this week one of its main indicators, that’s the worker productivity. This index, often proxied by the GDP over the total number of active employees remains quite informative to assess the efficiency of the factors of production used by economy to generate its final output. The Tunisian labor force , like most other employees across the Arab world has been empirically found in past studies to have a moderate productivity level.
The literature often imputes this finding mainly to; (a) the inadequate stock of capital with which those workers are endowed (due to low domestic saving and investment rates) and; (b) the mismatch between the employee’s skills and the actual needs of the jobs. We propose to explore additional correlates of the domestic productivity by analyzing data from a sample of 103 countries. We found for instance that, a higher productivity level is intrinsically intertwined with the reduction of the bureaucratic burden and also with the elimination of bribery and favoritism (e.g., nepotism) that are found to be one of the a main criteria in the recruitment process in many countries. Hired employees do not (very often) have the right profile to carry out the duties of their jobs which negatively impacts their productivity. Another conclusion from the chart above which appears at odds with the conventional wisdom, is that the existence of strict national laws regulating the terms of the employment contracts (e.g., hiring and firing conditions) appears not to be associated (at least significantly) with either high or low productivity level. Finally and not surprisingly, the improvement of the education level continues to be a critical factor in boosting the productivity growth of the labor force.
(Chart prepared by TUNESS Research Team)
Data source: Fraser Institute Database.