Abstract

The Maltese economy recovered strongly after the financial crisis of 2009 and its labour market kept the pace with the rapid evolution of the economy since EU membership. This labour market resilience has to be seen in the context of important labour market reforms undertaken in recent years that have played an important role in raising the Maltese economy’s potential growth rate. This paper presents a novel modelling approach to characterize the supply side of the Maltese economy. The model consists of a matrix transformation method using data on demography, education, labour market statistics from survey and administrative sources and gross value added from the National Accounts. This framework is used to quantitatively assess the economic impact of specific labour market policies, such as those pertaining to education and re-training, active labour market policies and inflows or outflows of workers from the labour market.

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