World Bank: Tunisian labor laws are killing jobs.
29 September 2014
Read by 1613 persons
In Tunisia, "labor market laws have failed to protect either workers or jobs," according to World Bank economists.
In a report titled ''The unfinished revolution: creating opportunities, quality jobs and wealth for all Tunisians'', presented Wednesday, September 17 in Tunis, two World Bank experts, Antonio Nucifora and Bob Rijkers, believe that the duality of permanent contracts (CDI) - fixed-term contracts (CDD) encourages businesses to hire people on fixed-term contracts to maintain employment "flexibility" and circumvent the rigid rules of dismissal.
The document shows, based on graphs comparing social contributions in Tunisia and other countries, that the social security system fails to protect most workers (more than 50%) and exacerbates unemployment problems.
It therefore recommends the introduction of unemployment insurance and the relaxation of dismissal procedures, measures that would encourage businesses to comply with the law and hire people in suitable jobs covered by social security.
"Such a reform is also likely to help guide private investment towards high value-added activities employing skilled labor," notes the document produced by (names of economists).
The social security system is costly without managing to protect most workers. It encourages informality and exacerbates the trend towards low-productivity jobs, according to World Bank experts, explaining that the social security contributions of companies and their employees are very high and amount to about one-third of gross salary.
"These charges constitute a heavy burden and erect a barrier to the creation of permanent jobs, particularly in SMEs," the authors of the report estimate, noting that high contributions "imply lower wages and thus penalize workers."
I. B. (with Tap)
Kapitalis.com
Published September 19, 2014.
Posted online September 29, 2014.
In a report titled ''The unfinished revolution: creating opportunities, quality jobs and wealth for all Tunisians'', presented Wednesday, September 17 in Tunis, two World Bank experts, Antonio Nucifora and Bob Rijkers, believe that the duality of permanent contracts (CDI) - fixed-term contracts (CDD) encourages businesses to hire people on fixed-term contracts to maintain employment "flexibility" and circumvent the rigid rules of dismissal.
The document shows, based on graphs comparing social contributions in Tunisia and other countries, that the social security system fails to protect most workers (more than 50%) and exacerbates unemployment problems.
It therefore recommends the introduction of unemployment insurance and the relaxation of dismissal procedures, measures that would encourage businesses to comply with the law and hire people in suitable jobs covered by social security.
"Such a reform is also likely to help guide private investment towards high value-added activities employing skilled labor," notes the document produced by (names of economists).
The social security system is costly without managing to protect most workers. It encourages informality and exacerbates the trend towards low-productivity jobs, according to World Bank experts, explaining that the social security contributions of companies and their employees are very high and amount to about one-third of gross salary.
"These charges constitute a heavy burden and erect a barrier to the creation of permanent jobs, particularly in SMEs," the authors of the report estimate, noting that high contributions "imply lower wages and thus penalize workers."
I. B. (with Tap)
Kapitalis.com
Published September 19, 2014.
Posted online September 29, 2014.
