Local employment growth in the coastal area of Tunisia: spatial filtering approach

Abstract

Since the mid-1980s, Tunisia has conducted a structural adjustment program characterized by more privatization and economic opening. This transition has created unequal growth in the economic performance and the employment opportunities between coastal and interior regions (inland areas). The 14 January revolution has started as social demands against unequal employment opportunities and corruption. The identification of various factors explaining the employment growth in Tunisia's coastal area is necessary to understand regional disparities. In this study, we attempt to assess the impacts of institutional factors and industrial structures on manufacturing employment growth. We seek to answer the following key question: Why does employment grow in one region and not in other? Using panel data on five manufacturing sectors associated to 138 Tunisian coastal small localities (delegations) along six years (2002–2007), we will give some empirical evidence on regional employment growth. We use a dynamic spatial panel data model in order to consider the spatial and temporal effects in the analysis of the local employment growth. Our results show that spillovers have been found to be significantly effective only within a range of 15 km for high-tech industries and 50 km for low-tech. Our econometric result stand that agglomeration and diversity have a positive effect on the local employment manufacturing growth. However, competition has a negative effect. In addition, our results show that industrial zones do not increase employment.