Labour market outcomes of economic globalisation in Tunisia: a preliminary assessment

Abstract

The present paper considers the impact of the economic dimension of globalisation on the Tunisian labour market. Seventeen years after the signature of the free trade agreement between Tunisia and the European Union, this paper may serve as a preliminary appraisal of the labour market outcomes of economic globalisation in this country. In particular, this paper has two main objectives. First, it provides an empirical assessment of the impact of economic globalisation on aggregate labour demand and economy-wide average wage between 1983 and 2009. Second, it estimates the effects of economic globalisation on sectoral labour demand and wages. The econometric analysis suggests that economic globalisation positively affects the level of aggregate labour demand, while there is no significant effect on average wage. At the disaggregated level, we reveal that the impact of economic globalisation on sectoral labour demand is clearer in the manufacturing sector, whereas for agriculture and services, the relationship seems to be weak. Indeed, we find that economic globalisation exerts positive effects on wages in agriculture and services and negative effects on wages in manufacturing. In order to check the parameters stability, the cumulative sum of recursive residuals and the cumulative sum of squares of recursive residuals tests, suggested by Brown, Durbin, and Evans [1975. “Techniques for Testing the Constancy of Regression Relations Over Time.” Journal of the Royal Statistical Society 37 (2): 149–192], are performed.