Trade Liberalization and the Labor Market: Empirical Evidence From Tunisia

This paper deals with the role of foreign trade liberalization in the changes occurring on the labor market in Tunisia.A two-equation model for employment and wages was estimated relying on a two-dimensional approach, time and sector.The main results firstly revealed that imports and exports are the least significant variables because of their marginal effect on labor demand, whereas production and delayed employment are the most explanatory variables, without being sector specific.Secondly, the real wage level determination depends on imports and exports which have different short-or long-run effects that are sector dependent (exportable or importable).Moreover, skilled and unskilled workers employment and productivity were found to be explanatory variables that may have a sectoral specification.As for production, it operates differently, depending on the sector.