The authors examine the forces that have shaped Arab labour markets ov
er the past two decades, namely demographic pressures, oil price Fluct
uations, state domination of the economy, and international migration.
Since the mid-1980s, while labour force growth rates have remained hi
gh, migration has no longer provided an adequate safety valve for the
over-supplied urban labour markets of the region's more populous count
ries. Public sector employment is not a solution either. Against this
background, the article examines the employment policy challenges faci
ng the region's decision-makers, including massive unemployment, dispr
oportionate public sector employment, structural adjustment and labour
market regulation.