The weak economic performance and insufficient and low-quality job creation in Tunisia is primarily the result of an economic environment permeated by distortions, barriers to competition, and excessive red tape, including in the labor market. This has resulted in the creation of a insufficient number of jobs, especially in the formal sector. To change this situation, policy makers need to address five strategic directives that can promote long-term inclusive growth and formality: foster competition; realign incentives, pay, and benefit packages in the public sector; move toward labor regulations that promote labor mobility and provide support to workers in periods of transition; enhance the productivity of informal workers through training and skills building; and reform existing social insurance systems and introduce new instruments to attain broader coverage.
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Diego F. Angel-Urdinola is a senior economist in the Human Development Department of the Middle East and North Africa Region of the World Bank, where he conducts applied research on poverty, inequality, labor markets, international migration, and human development. He has contributed to operational research for various developing countries, especially in Latin America, Europe and Central Asia, Sub-Saharan Africa, and North Africa. He has published articles in various academic and nonacademic publications, including the Journal of Economic Inequality, Journal of International Development, Economics Bulletin, and Labour, as well as several working paper series. He holds a PhD in economics from Georgetown University, USA.
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