Islam, Democracy and the State in Algeria by Michael Bonner Megan Reif Mark Tessler
Author:Michael Bonner, Megan Reif, Mark Tessler [Michael Bonner, Megan Reif, Mark Tessler]
Language: eng
Format: epub
Tags: Nonfiction, History, Middle East, Social & Cultural Studies, Political Science, International, International Relations
ISBN: 9781317984160
Publisher: Taylor and Francis
Published: 2014-01-02T05:00:00+00:00
Labour Market Reform
One of the objectives of economic reform is to reduce unemployment by promoting greater economic growth. Structural reform of the labour market is an essential component of any employment-generating growth strategy. A well-functioning labour market is crucial to successful restructuring. The aim is to achieve greater economic efficiency through increased competition and work and hiring incentives. This can be done through measures that eliminate barriers to employment that make labour markets inflexible and prevent them from responding fully to changing economic conditions. Indeed, there is general agreement among economists that the more rigidities there are in the labour market, the higher unemployment will be.
Considering the pre-reform rigidity of the labour market in Algeria, achievements in labour market reform have been substantial. SOEs have more autonomy in setting wages, the government has established an unemployment insurance system lasting up to 36 months, and employers are authorised to shed labour for economic reasons with the condition that they offer severance payments of one monthâs salary for each year of service, up to a maximum of 15 months. Nevertheless, in spite of changes in labour legislation, the market is still very rigid, contributing to Algeriaâs high unemployment rate. Moreover, as Abdelbaki Benziane notes in his contribution to this volume, major adjustments to the educational and labour training systems are needed in order to adapt skills to meet the needs of the private sector.
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