# **1. Introduction**

Starting from the late 1980s, Morocco has embarked on an unprecedented set of economic and social reforms that deeply changed the institutional and economic framework of the country. These comprehensive sets of reforms have contributed to deliver in terms of GDP growth and household welfare. The economy enjoyed sustained growth estimated at around 5% on average per year between 2000 and 2010 and there is evidence that GDP growth trickled down to households reducing poverty from 15.3% in 2001 to 8.9% in 2007 (Douiduich et al, 2013). These improvements also occurred in a global context characterized by two major financial crises in 2001 and 2007 and rising food and commodities prices.

Yet, these positive economic developments seem inconsistent with the changes depicted by the Employment Rate (ER) and the Labor Force Participation Rate (LFPR), which have been both rather stable despite large differences across space and gender. The phenomenon of GDP growth combined with employment stagnation has been observed elsewhere in developing and developed economies alike and labelled as “jobless growth” (Bhalotra, 1998, Verme, 2006, Wolnicki, 2006). Explanations of this phenomenon vary from pure demographic factors related to the growing size of the working age population to purely economic factors such as sharp increases in productivity due to technological changes. Irrespective of these determinants, it is nevertheless odd that an economy that grows at 5% per year does not exhibit a ‘buoyant” labor market with labor reallocation from less productive to more productive sectors and movements from poor jobs to better jobs.

This paper asks the question of whether, behind the main labor market aggregates, jobless growth has been accompanied by patterns of labor mobility that would point to positive changes in the labor market. Have people been mobile? Have they improved labor market status? Have they moved to better jobs? This paper delves into labor mobility in Morocco to unpack labor market dynamics in an effort to answer these questions. For the first time in Morocco, the paper uses the panel component of the Moroccan Labor Force Survey (MLFS), a nationally and regionally representative quarterly survey of 15,000 households accounting for approximately 65,000 individuals. Markov transition matrixes are used as the sole instrument of analysis and applied to 16 quarter to quarter periods of one year each covering the period 2007–2011. The period selected is also particularly interesting as it follows the 2007 global financial and economic crisis while it captures an exceptional agricultural year in 2009, two major shocks to the economy that are expected to generate increased labor movements.

Results point to high labor mobility across labor categories and a clearly segmented labor market along urban and rural areas and gender lines. About a quarter of the population experienced some form of labor market mobility during each of the years considered and mobility is high for both men and women. For men, transitions are across all statuses and jobs and transitions from worse to better statuses and jobs prevail. For women, transitions are mostly from inactivity to informality and unpaid work and there are few movements towards better statuses and jobs. It is also clear that the single group that suffers the most in the labor market is women living in rural areas. The paper points to a gender asymmetry in how the labor market reacts to economic shocks and calls for policy makers to pay more attention to this fact.

The paper is organized as follows. In the next section we outline the policy context and most important reforms undertaken by the Government of Morocco during the past twenty years as well as the economic shocks and outcomes. Section 3 introduces data and methods used for the analysis and section 4 illustrates results on labor mobility covering labor mobility across multiple labor market dimensions. This is done by looking at a wide range of labor statuses including employment, unemployment and inactivity, economic 2