Egyptian men working abroad: Labour supply responses by the women left behind

Female labour force participation has remained low in Egypt. This paper examines whether male international migration provides a leeway for women to enter the labour market and/or to increase their labour supply. In line with previous studies, we find a decrease in wage work particularly in urban areas. However, women living in rural areas and affected by migration are much more likely to be employed in non-wage activities (i.e. unpaid family work) and subsistence work compared to women in non-migrant households. Furthermore, we find evidence that this labour supply response is driven by the household's need to replace the migrant's labour rather than by a loosening of a financing constraint on family enterprises made possible by the flow of remittances.     

The Effects of Public Sector Hiring and Compensation Policies on the Egyptian Labor Market

This article examines the combined impact of the employmentguarantee for graduates and public sector compensation policieson the Egyptian labor market. Besides contributing to an unsustainablerate of growth in the government labor force, these policieshave encouraged queuing for government jobs, contributed tohigh graduate unemployment rates, and reduced the employmentof graduates in the private sector. Despite substantial wageerosion in the public sector in recent years, government wages,when appropriately corrected for observed heterogeneity andsample selection, are on a par with, or higher than, privatesector wages, especially for graduates. When combined with themore desirable nonwage aspects of government jobs, these compensationlevels explain the attractiveness of public sector employmentto graduates. Government pay scales are especially advantageousto female secondary school graduates, who appear to face considerablediscrimination in the private sector.     

Matching Severance Payments with Worker Losses in the Egyptian Public Sector

Severance pay programs can reduce political opposition and minimizethe social costs of labor redundancies. In Egypt, only voluntaryprograms are feasible because legal limitations preclude layoffsand strong organized labor groups oppose any weakening of jobsecurity protections. A common problem with voluntary severanceprograms, however, is that they tend to overpay workers relativeto the welfare losses they experience from displacement. This article estimates the losses that public sector workerswould incur if they were displaced from their jobs and simulatesseveral voluntary severance schemes to determine how well theschemes match compensation payments to these estimated losses.It provides a fairly strong argument for looking at the structureof opportunity costs and wage profiles when designing severanceprograms. It shows that significant overpayment can be avoidedby matching compensation payments to the expected losses ofworkers. It also provides a method for estimating these lossesfrom standard labor force surveys that are available in mostcountries.     

Flexible Labor Regulations and Informality in Egypt

Do more flexible labor market regulations reduce informal employment in formal firms? This paper examines the effects of changes in labor regulations on the incidence of formal employment. Using the case of Egypt, we study the effects of the introduction of more flexible labor regulations in 2003 on the probability that non‐contractual workers will be granted a formal employment contract. To identify the effect of the law and control for potential confounding factors, we use a difference‐in‐difference estimator that measures the difference in the pre‐ and post‐law probability of obtaining a formal contract across a treatment group of non‐contractual workers initially employed in formal firms and a comparison group of non‐contractual workers initially employed in informal firms. The latter serve as a useful comparison group since informal firms are unlikely to formalize as a result of the law, so that the only way their workers can become formal is to move to another firm. Our findings show that the passage of the new labor law did in fact increase the probability of transitioning to formal employment for non‐contractual workers employed in formal firms by about 3–3.5 percentage points, or the equivalent of at least a fifth of informal workers in formal firms.     

Market structure and spells of employment and unemployment: Evidence from the construction sector in Egypt

This paper investigates the links between market structure and spells of employment and unemployment in the construction sector in Egypt using an augmented job search framework. Two key features of the model are the reservation frontier which allows for a trade-off between wages and expected duration of employment, and the dependency of unemployment durations on expected employment durations and expected wages. These, as well as conjectures concerning the influence of demand-side forces obtained from the expressions for the transition rates out of employment and unemployment, are examined using Weibull, log-logistic and generalized gamma parameterizations of the hazard rate. The parametric assumptions are exploited to resolve problems associated with selectivity and use of generated regressors.