Analysis of the impact of the Arab Spring on the rate of unemployment in some MENA countries

MENA (Middle East and North Africa) Region has the highest youth unemployment rate in all regions in the world. While the Arab Spring has been described as a youth revolt stemming from complaints about unemployment and dissatisfaction with the existing regimes, contrary to what the expected, the labor market adversely affected after the Arab Spring. This article undoubtedly examines the macroeconomic determinants of youth unemployment and total unemployment in Egypt, Yemen, Tunisia and Libya, which are the regions where the mass protests and crisis were most experienced after the Arab Spring, and to what extent they were affected by the Arab Spring. The primary purpose of the study is to search to what extent unemployment has been affected by the Arab Spring Crisis. Secondly, it is to determine the impact of macroeconomic determinants such as per capita income, inflation, average education year, FDI (foreign direct investment), population, net exports and also world governance indicators and the 2008 Global Financial Crisis on youth unemployment and total unemployment rates. For this purpose, random effect estimation is employed for the period 2000-2019. The main result of the study is that the Arab Spring Crisis has a negative impact on the labor markets and the impact on the total unemployment rate is greater than the youth unemployment rate. While the Arab Spring dummy variable was statistically significant for the total unemployment rate, it was not found significant in determining the youth unemployment rate. Per capita income and the global financial crisis variable did not play an important role in determining the youth and total unemployment rates of the countries. However, while the FDI and inflation variables were found to be statistically significant only for the total unemployment rate, the effects of the variables of population and average years of education were significant for both tables. Also while the variables of governance control, rule of law, political stability and nonviolence are statistically significant for both tables, the results of the other indicators differed for both tables. In summary, it has been statistically determined that governance indicators are also effective factors on the unemployment rates of the countries considered.