Informal economy policy assessment in Morocco: Promoting Sustainable Development and Inclusive Economic Growth through Policy Reforms

Consultant

Contract

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Background

Morocco is one of many countries that has a large informal economy. Data from the national survey on the informal sector in its three waves (1999/2000, 2006/2007 and 2013/2014) provide findings on the evolution of this sector's contribution to GDP and non-agricultural employment. Based on recent surveys by the High Commission for Planning, informality in Morocco accounts for 11% of GDP and around 36% of non-agricultural employment in 2014 and 67% of overall employment according to the 2019 Employment Satellite Account. Moreover, an examination of the informal sector and a diagnosis of its performance reveal a certain heterogeneity of its production units with a predominance of small-scale and low productivity units. In addition, the advent of the Covid-19 pandemic and the slowdown of the international economic growth have constrained the country's economic recovery and are likely to accelerate the growth of Morocco's informal economy in the coming years. These challenges, especially those related to the Covid-19 pandemic, have underscored the need to focus on this sector, with particular attention to the unique challenges faced by women. As a matter of fact, studies have shown that women bear the economic brunt of the pandemic the most. This reality is even exacerbated for women in the informal sector who are often left without any protection of labor laws, social benefits such as pension, health insurance or paid sick leave.

In this context, addressing informality remains front and center in Morocco’s development framework. Both the Sustainable Development Goals (SDGs) agenda and the New Development Model (NDM) emphasize the urge to directly address the issue of informality for sustainable development. These development frameworks call for promoting development-oriented policies that support productive activities, decent job creation, entrepreneurship, and encourage formalization and growth of micro-, small-, and medium-sized enterprises through financial inclusion and a progressive incentive system, as stated in SDG target 8.3 and the second Strategic Choice[1] of the NDM. Additionally, informality intersects with several other development goals, including poverty reduction, gender equality, and the promotion of inclusive societies.

UN Women and the HCP are launching a study project to address informality in Morocco from a gender perspective to develop policies that aim to reduce the size of the informal economy and promote the transition to the formal sector with a focus on women’s situation.

Working with the Programme Analyst, in close coordination with the HCP team, the international consultant is expected to provide capacity building in modeling and simulation techniques to HCP team in the areas of modeling and micro-simulations and developing and implementing a macro-micro simulation model designed to study and assess the potential impact of different policy interventions to reduce informality in Morocco.

[1] Strategic choice 2: Steer economic stakeholders towards productive activities. Proposal 2.6 Integrate the informal sector using a gradual, incentive-based approach suited to the nature of the stakeholders concerned.

Duties and Responsibilities

Description of Responsibilities/ Scope of Work

Under the overall guidance and supervision from the Programme Analyst and HCP technical team, the consultant will undertake the following tasks:

1. Literature review: Conduct a comprehensive review of existing studies, reports, and policies related to the informal economy. This review needs to allow for a policy benchmark on strategies used by other countries, similar to Morocco, to reduce the share of the informal economy.
2. Data collection: Collect relevant data and information on the informal economy in Morocco. The HCP team will work to make the micro data on informality and all relevant data to the study available to the consultant to Examine the role that informality plays in the Moroccan economy, including its impact on both the economic performance and well-being, and identify the policy challenges and opportunities aimed at reducing the size and impact of informality through a gender-disaggregated analysis.
3. OLG[1] model: Develop an OLG model for Morocco where individuals are differentiated according to the age (18 age groups: 15-19, 20-24, 25-29…, 100-104), gender (men and women), education level (3 groups: low, middle, high). Individuals choose the optimal level of (i) consumption and savings, (ii) labor participation, (iii) the education level and (iv) whether to stay in Morocco or to emigrate abroad, by maximizing their intertemporal utility given their budget constraint.

Both the formal sector and the informal sector are characterized by search and matching frictions in the labor market. The number of jobs created at each period depends on the number of vacant jobs created by the firms and the number of people looking for a job. First, people try to work in the formal sector. Those who cannot find a formal job look for an informal job, and those who cannot find an informal job are unemployed. This modeling allows to endogenize both the unemployment rate and the size of the informal sector.

In particular, the OLG model will be used to quantify the effects (of the demographic shock and the policies that could reduce the size of the informal sector) on women’s situation in terms of labor market outcomes (labor market participation, wages, unemployment, and informality), as well as on their individual choices (education and emigration), and their well-being.

The model should be linked to a microsimulation choice model that can evaluate the impact of policies on the social and labor market outcomes. The consultant is also expected to evaluate the gender gap in pension in all different scenarios

1. Impact assessment: Conduct an impact assessment of the recommended policy measures using the OLG model and microsimulation model. The assessment should evaluate the potential impact of the policies on overall economic performances, social, and labor market outcomes. The assessment should analyze the impact of the strategies from a gendered lens, including women participation, choices, role in the labor market and well-being;
2. Policy recommendations: Based on the findings, provide well-structured, realistic, and actionable policy recommendations to promote the transition to the formal sector and reduce the undesirable effect of informality in Morocco, through Gender-Focused Policy Reforms

The implementation of this assignment will be conducted by the consultant with the active involvement of HCP team.

Reporting

The consultant is expected to provide regular updates to the UN Women and the HCP throughout each step of the study

All the reports should be written in clear and concise language, and should be targeted at policymakers, government officials, civil society organizations, and other stakeholders with an interest in reducing informality and its impact in Morocco.

The consultant will undertake a one-week mission to Rabat. The mission is timed to take place when the drafts of deliverables 1-7 have been completed and discussed at virtual meetings. During the consultant mission, HCP staff and the consultant will undertake the following activities:

• Meetings presenting draft results to policymakers and other stakeholders.
• Internal presentations of the outputs, including discussions of technical aspects. The presentations aim at strengthening HCP capacity and identifying shortcomings that call for revisions.

Deliverables

Deliverable

Expected completion time (due day)

Deliverable 1: A report detailing a data analysis, with a particular focus on the gender gap related to employment, informality, and wages carried out by age, education level and other socioeconomic characteristics

Working time: 5

Deadline: 5 March 2024

Deliverable 2: A background report on successful policy options and recommendations to assist and design policies and programs supporting the transition to the formal sector, with a gender focus.

Working time: 5

Deadline: 25 March 2024

Deliverable 3: Construction and calibration of the OLG model.

Working time: 15

Deadline:19 June 2024

Deliverable 4: Estimation of the individual choices: Labor participation; Education; Emigration. The elasticities are then used in the OLG.

Working time: 8

Deadline:30 June 2024

Deliverable 5: An impact assessment report, policy-oriented, including a brief description of the model and database; an overview of Morocco's economy with a focus on informality and policy challenges, with a gender perspective, that evaluates the economic and social impacts of strategies to reduce informality and its effect, including the potential reduction in production and employment informality, the promotion of the transition to the formal sector, and the effects on overall economic performance and social and labor market outcomes, and by gender.

Working time: 12

Deadline: 20 September 2024

Deliverable 6: A 4-day virtual training workshop that will focus on the use of the micro-macro Model and develop skills in policy implementation, simulation and analysis. The training will consist of a combination of lectures and practical hands-on analysis.

Working time: 5

Deadline: 30 September 2024

Deliverable 7: Policy brief that summarizes the consultant's findings and recommendations and presents an action plan to support the transition to the formal sector in Morocco.

Working time: 5

Deadline: 20 Novembre 2024

Deliverable 8: Final report including a detailed methodology section, findings and analysis, policy recommendations, meetings presentations and a conclusion.

Working time: 5

Deadline:10 December 2024

Timeline

The study will cover a 60 working days.

Consultant’s Workplace and Official Travel

This is a home-based consultancy.

As part of this assignment, there will be 01 trip to Rabat.

Selection criteria

The evaluation of the CVs will be based on the following criteria:

Criteria

Points

Advanced degree (Ph.D. preferred) in development, economics, or an equivalent qualification

3 points

Experience in conducting research and policy analysis on development economics, including topics on informal economy, labor market, and poverty reduction;

4 points

Proven experience in designing and applying quantitative methods and macro and microsimulation GE/OLG models to assess economic and social impacts;

3 points

Excellent English communication and writing skills; (Samples of previous work will be required);

2 points

Previous work (research, report, scientific article) conducted on the relevant topics of expertise (please merge into one file with pdf format before uploading)

3 points

TOTAL SCORE

15 points

[1] OLG models are used to evaluate the effects of demographic shocks (such as the change in fertility rates, survival rate, and migration rates) since it allows to follow individuals over time and, consequently, to analyze their behavior (investment, labor choice, retirement…) over their life cycle and the consequences at the macroeconomic level.

[SK1]evaluation

Competencies

Core Values:

• Respect for Diversity
• Integrity
• Professionalism

Core Competencies:

• Awareness and Sensitivity Regarding Gender Issues
• Accountability
• Creative Problem Solving
• Effective Communication
• Inclusive Collaboration
• Stakeholder Engagement
• Leading by Example

Please visit this link for more information on UN Women’s Core Values and Competencies:

https://www.unwomen.org/en/about-us/employment/application-process#_Values

FUNCTIONAL COMPETENCIES:

• Technical credibility in the fields of statistics, development, economics or an equivalent field
• Commitment to continuous improvement
• Partnerships building

Excellent skills in research and reporting

Required Skills and Experience

Education and Certification:

• Advanced degree (Ph.D. preferred) in development, economics, or an equivalent qualification.

Experience:

• 15 years of experience in conducting research and policy analysis on development economics, including topics on informal economy, labor market, and poverty reduction;
• Proven experience in designing and applying quantitative methods and macro and microsimulation GE/OLG models to assess economic and social impacts;
• Excellent analytical skills with strong drive for results and capacity to work independently;
• Excellent English communication and writing skills; (Samples of previous work will be required);

Languages:

• Fluency in English is required. Knowledge of French is an asset.

V. How to Apply

Interested candidates are invited to send the following documents:

• An updated and detailed CV, focusing on the academic and professional background related to the purpose of the assignment; or P11 (P11 can be downloaded from: https://www.unwomen.org/sites/default/files/Headquarters/Attachments/Sections/About%20Us/Employment/UN-Women-P11-Personal-History-Form.doc)
• A cover letter (maximum length: 1 page)
• Previous work (research, report, scientific article) conducted on the relevant topics of expertise.

(please merge into one file with pdf format before uploading).

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Added 3 months ago - Updated 2 months ago - Source: jobs.undp.org