Youth Unemployment in Tunisia: Characteristics and Policy Responses

In this paper we analyze the trends in youth employment and unemployment in Tunisia from 1984 to 2010.Next we evaluate the labor market reforms and active labor market policies undertaken by the Tunisian government in order to assess the effectiveness of these policies.We have three main findings.First, while unemployment is primarily a youth phenomenon in Tunisia, the long term trend indicates that workers with higher education have seen a deterioration of their job prospects for workers of all ages.Thus, there has been a failure by the Tunisian economy to produce a sufficient number of jobs for more educated workers.Second, the rise in schooling among Tunisian youth implies that this weakening of the job market has been particularly felt by the youth.Young Tunisians with higher education suffer from an unemployment rate over 50%.Finally, our evaluation of the active labor market policies and labor market reforms of the 1990s imply that these policies have done very little to improve the labor market conditions for Tunisian youth.In order to improve these conditions two factors are necessary: first, the macroeconomy needs to be improved; second, the educational system needs to focus on producing skills rather than credentials in order for young people to be able to contribute to the private sector.