Gender and Employment Impacts of Taxation Policy in Middle East and North A Comparative Analysis of Algeria, Egypt, Morocco, and Tunisia

Evidence suggests that gender inequality is likely to condition the impacts of economic policies. While gender-responsive budgeting has made significant headway into economic policy, gender-responsive taxation policy has lagged behind. Because tax policy is the most economically direct way by which governments can influence individual behavior, requests have been made for gender-responsive tax policy that promotes gender equality. This chapter analyzes the tax-policy-induced gender bias in employment in Algeria, Egypt, Morocco, and Tunisia. The possible distortive impact of indirect taxation on male and female employment is assessed with the use of a gender-focused computable general equilibrium model. The analysis shows that indirect taxes, in particular import duties, are biased toward female employment in Algeria and Egypt, but not in Morocco and Tunisia. Female labor-intensive industries in the former countries are highly protected in the benchmark and are not competitive internationally, so that removing protection would increase competition with cheaper import substitutes and cause the sector to contract and lay off workers. In Morocco and Tunisia, female labor-intensive industries are less protected, so the removal of indirect taxes would have quasi-neutral effects between male and female salary and wage earnings.