Although total unemployment is decreasing, skilled unemployment is on the rise
Persistent skilled unemployment in Morocco might come from the following factors:
- External shocks affecting sectors that employ skilled workers;
- Wait-and-see behavior resulting from past and or existing expectation due to public-sector employment patterns;
- High reservation wages that reinforce above mentioned behaviour;
- An over-supply of skilled labour unmatched by the demand of the workforce;
- A change in the economy’s degree of openness ( sum of exports and imports over GDP in Morocco ) → reduction in the degree of openness could imply less demand for skilled workers
There is an increasing number of students with non-technical uni degree holders failing to find employment and this can be explained by the fact that “too many” graduates are leaving the education system with non-STEM (humanities and other social sciences) degrees in contrast to “too few” STEM-type degrees
In the absence of skill premia data, and since labor demand is latent and not directly observable, anecdotal evidence could suggest that
(i) either demand in the labor market for STEM-type degree holders is higher than that of non-STEM degree holders,
(ii) employers use STEM-type degrees as a cut-off criteria to define minimum levels of qualifications prior to hiring.
According to the World Bank4 (2012), Moroccan students are not only scoring low in international tests, but also showing high dropout rates, with 72% of students exiting lower levels of the education system without proper qualifications. According to the IMF (2016 – Article IV), evidence of specific skills mismatch (in undiversified economies and in Morocco specifically) are tied to the rapid increase in enrollment ratios for education systems ill-prepared to maintain the same level of quality for much larger cohorts of students.
New entrees to the job market are "outsiders" because of labour unions and a complex regulatory framework (?)
Labour market rigidities in Morocco tend to more negatively affect skilled over unskilled workers since the latter can also rely on the informal labor market, given it is less subject to complex regulatory frameworks and elevated hiring and dismissal costs.
Unemployment and its duration appear to be affected by changes in quantity and length of unemployment benefits over time. On the one hand, these benefits seem to facilitate a more active search for employment, serving as a “subsidy for the search process”.
Expected wage differentials between public and private sector jobs can play a significant role in workers’ search-behavior, affecting skilled unemployment. Over the past decade, university graduates have perhaps found jobs more easily with humanities and social sciences degrees.
University graduates sometimes chose to remain unemployed (even in long-term unemployment) due to preferences towards highly-demanded and selective public formal sector work that offer better wages and benefits
Although the frequency of shocks in MICs is known to produce growth volatility, the Middle-East and North Africa (MENA) region has managed to obtain strong and stable levels of growth. The region has, however, found it much more difficult to sustain them, illustrated by high growth volatility (IMF 2003). Real per capita GDP growth volatility has been double that of developing countries average. That characteristic implies that agents have a low propensity to invest in the long term, often leading to high levels of unemployment – including skilled unemployment.
Structural and other efficiency-related reforms generally aim to improve economic performance by reducing the size of the public sector and its tendency to develop as an “employer of last resort”. But, if other structures labor market reforms do not complete this process, temporary unemployment arise.
- Reforms might change the role of the public sector and its social and welfare programs. This process might lead to an unequal redistribution of cost and benefits, creating new pressure on both the education and labor markets. Youth unemployment is therefore affected partly by the aftermath of such reforms, but also by the students’ soft and hard skill weaknesses, in turn negatively affecting their employability.
The restructuring of the Moroccan economy and the reduction of the role of the state as a formal job creator were conducted in parallel to increasing public policies to favor employment. Nonetheless, overly-diverse approaches aimed at substituting the role of the state as employer of last resort were pursued to push graduates into the labor market.
External shocks cause a positive effect on skilled unemployment