Sectoral shifts, diversification, regional unemployment on the eve of revolution in Tunisia: a sequential spatial panel approach

Sectoral shifts, diversification, regional unemployment on the eve of revolution in Tunisia: a sequential spatial panel approach

This paper investigates how sectoral shifts and industry specialisation patterns have influenced Tunisian labour market performance in the recent past years. Building on a sequential spatial framework, while taking into account spatial dependencies and externalities, the empirical investigation highlights that sectoral shifts and congestion effects induced by labour-supply growth exert a negative impact on unemployment dynamics.

Results suggest that some Marshallian externalities manage to soften, and even reverse, the diversification induced effect on unemployment. Moreover, the authors report high spatial dependence, which evidences a higher degree of contagion. Additionally, negative spillovers of sectoral shifts contrast with positive spillovers of specialisation pattern, initial unemployment rate, labour-supply growth and the excess labor demand growth rate. Finally, the revolution had a detrimental effect on unemployment growth, except in the center-west region where unemployment was an inevitable result of an inner-process.

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