Diego Angel-Urdinola

While economic growth has been sustained for a number of years in many countries in the Middle East and North Africa (MENA) region, this has not resulted in the creation of an adequate number of jobs and has succeeded, at best, in generating low-quality, informal jobs. While there is a great deal of heterogeneity across countries, informality in MENA is widespread, and some countries in the region are amongst the most informal economies in the world. The book looks at informality through a human development angle and focuses specifically on informal employment. In line with this approach, the working definition for informality adopted in the book is “lack of social security coverage” (usually understood as pensions, or if a pension system does not exist, as health insurance), which captures well the vulnerability associated with informal employment. Informal workers in MENA are generally engaged in low productivity jobs - more so than in comparator countries -, are paid less for otherwise similar work in the formal sector, and self-report low levels of satisfaction at work. Also, informal workers in MENA face important mobility barriers into formal employment and thus lack of social security coverage against health, unemployment, and old-age risks. Formal employment in the MENA region is strongly associated with public sector employment. Opportunities for formal employment in the private sector in the region remain very limited. The book identifies 5 strategic directions to promote long-term inclusive growth and formality, namely: (i) fostering competition; (ii) realigning incentives in the public sector; (iii) moving towards labor regulations that promote labor mobility and provide support to workers in periods of transition; (iv) enhancing the productivity of informal workers through training and skills upgrading; and (v) reforming existing social insurance systems and introduce new instruments for coverage extension. This book is addressed to policy makers, academics, and practitioners who wish to understand the phenomenon of informal employment, and policy options for promoting more inclusive and productive labor market opportunities.

In the aftermath of the Arab Spring, when thousands of young women and men fought for the opportunity to realise their aspirations and potential, the question of jobs continues to be crucial in the Middle East and North Africa region. This report uses jobs as a lens to weave together the complex dynamics of employment creation, skills supply, and the institutional environment of labour markets. Consistent with the framework of the 2013 World Development Report on jobs, of which this report is the regional companion, this work goes beyond the traditional links between jobs, productivity, and living standards to include an understanding of how jobs matter for individual dignity and expectations - an aspect that was clearly central to the Arab Spring. Just as important, this report complements the economic perspective with an analysis of political economy equilibrium, with a view to identifying mechanisms that would trigger a reform process. As such, the report has three objectives:1. It seeks to provide an in-depth characterisation of the dynamics of labour markets in the Middle East and North Africa and to analyse the barriers to the creation of more and better jobs. It does so by taking a cross-sectoral approach and identifying the distortions and incentives that the many actors, firms, governments, workers, students, education, and training systems currently face, and which ultimately determine the equilibrium in labour markets.2. It proposes a medium term roadmap of policy options that could promote the robust and inclusive growth needed to tackle the structural employment challenge for the region.3. It aims to inform and open up a platform for debate on jobs among a broad set of stakeholders, with the ultimate goal of contributing to reach a shared view of the employment challenges and the reform path ahead.