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This paper aims to analyze the impact of monetary policy shock on employment in the West African Economic and Monetary Union. We first propose a DSGE model to understand the link between monetary policy and employment. The model incorporates labor market frictions. We find that the effect of monetary policy on employment depends on the characteristics of the labor market, namely the job destruction rate and the bargaining power of firms (or workers). We show that an expansionary monetary policy shock increases employment, stock of capital (investment), and job finding probability. To verify the theoretical results, we estimate a structural panel VAR and find that an expansionary monetary policy shock increases employment as well as stock of capital and household consumption. Moreover, using another structural panel VAR, which allows cross-sectional heterogeneity of the response dynamics, we highlight heterogeneous responses of employment and macroeconomic variables following a monetary shock. JEL codes: C33, C36, E24, E52