Structural Change, Productivity, and Jobs Creation: Evidence from Tunisia

Although Tunisia has developed its higher education to move up the value chain, its economy has not been able to grow beyond low-skilled and low-wage activities. As a result, the newly unemployed have been mainly young and well-educated people, reflecting a structural mismatch between labor market demand for unskilled workers and an increasing supply of skilled labor. The employed population is mainly involved in activities with low added value (such as trade, transport and telecommunications, construction, textiles, and clothing), therefore requiring primary and/or secondary education profiles as a priority. The democratic transition after the 2011 revolutionary thrust has been accompanied by a severe economic recession which accounts for the difficulties experienced by Tunisia today, albeit partly. In the light of these serious challenges the country has to overcome, it needs a combination of several tools to ensure increased productivity and employment growth. Particularly, the identification of most productive and profitable sectors and sustainable job-creating firms should ensure investment reorientation towards the productive sectors and thus improve creating jobs and reducing unemployment. This policy brief focuses on implementation of sectors and firms that constitute the real opportunities for productive employment and social integration, using data from the Tunisian Business Register (RNE) over the last two decades.