Impact assessment of job reallocation on unemployment in Morocco: An ARDL approach

This paper investigates the impact of the sectoral reallocation of labor on unemployment in Morocco. Using the Lilien index for job reallocation, we estimate an autoregressive distributed lag model using quarterly data between 2001 and 2019. The analysis yielded two key findings. In the short run, job reallocation raises unemployment, which can be attributed to the inadequacy of the quantity of newly created jobs in the emerging sectors, the mismatch between the actual and the needed skills of the workforce, and the costs of job search. In the long run, job reallocation reduces unemployment as the emerging sectors develop and the workforce adapts to the changes in the labor market. Policymakers should design strategies that accelerate the adaptation of labor supply to the needs of emerging sectors and reduce transitional unemployment. Public policy should focus on identifying and developing emerging and labor-intensive sectors that can absorb the surplus of skilled and unskilled labor.