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A Framework for Discussing Normative Theories of Business Et

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This process may have prevented the benefits of economic growth from being shared fully among poorer segments of the population and has led to increasing informality. A typical country in MENA produces about one-third of its GDP and employs 65 percent of its labor force informally. This means that around two-thirds of all workers in the region may not have access to health insurance and/or are not contributing to a pension system that would provide them with income security after retirement. From a fiscal perspective, about one-third of total economic output in the region remains undeclared, with considerable implications for government revenue.

The wedge between the employer’s labor cost and the worker’s take-home pay (that is, the tax wedge) could be further reduced through social insurance reforms that lower the social security contribution rates or by shifting a portion of the labor taxes toward other general revenue sources, such as consumption or property taxes. Engaging in a more inclusive social dialogue is key to sustaining these reforms. There are important political economy aspects to labor market reform. In particular, the traditional tripartite structure that convenes government actors, trade unions, and employer representatives is likely to favor the status quo of protective regulation for employed, unionized workers.

Educated workers from informal employment to public sector e­ mployment. 7). Informality is more prevalent among workers in small firms. 8). 3 20 10 0 Jordan Iraq Egypt, Lebanon Arab Rep. 2 90 Morocco Syrian Arab Yemen, (Urban) Rep. Rep. 3 30 20 10 0 Iraq Jordan Egypt, Lebanon Morocco Syrian Arab Yemen, Arab Rep. (Urban) Rep. Rep. primary or below preparatory/sec. general secondary vocational tertiary education Source: Angel-Urdinola and Tanabe 2011. 8 Informality and Firm Size 100 proportion of firms by size (%) 90 80 70 60 50 40 30 20 10 Egypt, Arab Rep.

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