Innovation, Well-being and the Labor Market in Morocco: Towards a Model of Intensive Growth, Analysis of Dynamics through the VECM Approach

Abstract

This paper investigates the dynamic interactions between Total Factor Productivity (TFP), innovation, well-being, economic growth, and unemployment in Morocco over the 1991–2019 period. While economic literature has extensively explored these relationships bilaterally, it often lacks an integrated macroeconomic framework to capture their simultaneity in the context of a developing economy. The originality of this study lies in the application of a Vector Error Correction Model (VECM) to analyze these multidimensional interdependencies. The variables include TFP, GDP per capita, the number of scientific and technical articles (innovation), the Human Development Index (well-being), and the unemployment rate.

Johansen cointegration tests reveal a stable long-term equilibrium relationship among these variables. The estimated cointegrating vector shows that the Well-being (HDI) has a highly significant positive impact on TFP in the long run (  ), confirming the central role of human capital in productive efficiency. Conversely, unemployment durably degrades productive performance productive ( ), illustrating hysteresis mechanisms. In the short term, the results highlight a Schumpeterian "selection effect," where unemployment can temporarily increase average productivity through resource reallocation. Finally, causality analysis identifies economic growth as the system's central pivot, serving as the primary transmission vector for shocks between innovation and the labor market. These findings emphasize the need for integrated structural policies that prioritize human capital to foster intensive growth in Morocco.

Classification JEL: O30, J60, C32, I31, O47

Paper type: Empirical Research