# **1. Introduction**

Very few people could have predicted the Arab spring and the revolutions that are still unfolding in the Arab world. But for those who travelled through Arab countries in recent years the sense of malaise felt by the general public, in particular the youth, was evident and visible in phenomena such as the emigration of the skilled and the unskilled - explained by the lack of work opportunities at home - and the degree of marginalization from economic activities of the youth who did not emigrate abroad, especially young women. In spite of improved economic conditions and growth, the Arab populace enjoyed little gains in employment or labor force participation. The labor force participation of women in the Middle-East and North-Africa region is the lowest across all the regions of the world. In some countries as many as half of the youth aged 15 to 29 are out of school and out of work.

Participating in the labor market is important to people beyond the economic rewards that may derive from employment. It provides a sense of purpose and the feeling of contributing to society that has a meaning in itself. Conversely, lack of employment can provide a sense of emptiness and exclusion that can lead to anxiety and depression. The social psychology and labor economics literature largely agree on this point and it is not surprising that employment features among the top policy priorities of any government (see, e.g., Clark and Oswald 1994). Yet, individuals are not identical in how they may perceive a condition of joblessness and it is not uncommon to see very large differences in attitudes towards employment across social groups. For example, urban residents are typically louder in voicing their labor market complaints than rural residents despite the lower living conditions in rural areas, and in many societies labor market expectations across genders are different, resulting in different emotional attitudes towards employment. How can we reconcile the objective status of labor deprivation with subjective feelings of labor deprivation across social groups?

This paper uses the concept of relative deprivation to better understand how objective conditions of labor deprivation can be transformed into subjective feelings of labor deprivation for different social groups. We focus on youth and gender using a unique household and youth survey administered in Morocco in 2010 and we propose a new measure of relative labor deprivation that takes into account both objective and subjective aspects of deprivation.

The concept of relative deprivation is not new. Both Adam Smith in the Wealth of Nations (1776) and Karl Marx in Wage, Labor and Capital (1847) delved extensively into the idea that people compare themselves with their peers and neighbors rather than with the whole society. In the last century, Stouffer et al. (1949) and Runciman (1966) contributed to formalize the concept of relative deprivation by introducing the notion of reference groups and by discussing the importance of the reference group in generating feelings of deprivation. Economics has approached the question of relative deprivation and reference groups in more recent times with the introduction of the first quantitative measure of relative deprivation developed by Yitzhaki in 1979, and today there are a range of measures of relative deprivation that can be readily used for analyses (Hey and Lambert, 1980, Bossert and D’Ambrosio, 2006, Chakravarty et al. 2005, Chakravarty, 2007). In particular, recent research has shown how 2