Unemployment and Coordination Failures in Tunisia: Estimation Using Stochastic Frontier Analysis

In studying the unemployment-coordination failure relationship, we adopted a regional labor market analysis to understand the role of regional disparities in the persistently high unemployment rate through a matching process. We included some additional variables as drivers of matching efficiency and regional disparities. For this purpose, we performed a stochastic frontier analysis for 24 regions over the sample period between 2007 and 2017. Our results showed that the extremely varied unemployment rates across the regions confirm that the persistent unemployment rate is the result not only of an excess labor supply, but also of a lack of coordination between the supply and demand. The results also indicated a remarkable decrease in the matching score over the period 2007-2017 for the 24 Tunisian regions.

Keywords: Unemployment, Coordination Failures, Matching Process, Beveridge Curve, Stochastic Frontier Ananlysis.

JEL Classification: E24, J20, J21, J64.