Economic Research Forum (ERF)

Egypt’s labour market: facts and prospects

5102
An ERF policy conference on the Egyptian labour market in late October 2019 focused on gender and economic vulnerability. This column summarises the key takeaways from the event.

In a nutshell

Despite the recent pick-up in Egypt’s GDP growth, employment rates have continued to decline, suggesting that the current recovery is essentially jobless.

Almost a quarter of Egyptian households have experienced food insecurity and 16% have been exposed to at least one type of shock – economic, social, health-related or environmental.

Factoring in vulnerability provides a well-rounded framework for thinking about employment, unemployment and employability.

An Economic Research Forum policy conference on the Egyptian labour market in late October 2019 focused on gender and economic vulnerability. The conference provided a platform for dissemination of results from the fourth wave of the Egypt Labor Market Panel Survey (ELMPS) conducted in 2018, and for discussing the implications of these results for public policies in Egypt. The conference was attended by 150 individuals, including policy-makers, media representatives and experts from academia, international organisations, civil society and the private sector.

H.E. Hala El Said, Minister of Planning, Monitoring, and Administrative Reform and H.E. Khairat Barakat, Chairman of the Central Agency for Public Mobilization and Statistics (CAPMAS) delivered keynote speeches in the first session. They both underscored the importance of the results.

H.E. Hala El Said expressed her appreciation of the efforts of ERF in partnership with CAPMAS. She noted that the results draw attention to trends in employment and the labour market, which are critical for understanding the evolution of the development process in Egypt. H.E. Khairat Barakat highlighted the significance of establishing a platform to discuss the findings surrounding the labour market in Egypt.

Dr Ragui Assaad then introduced the ELMPS 2018, as well as a gendered analysis of the evolution of labour supply in Egypt over three decades. Dr Assaad’s presentation focused on multiple aspects of labour force participation, employment and unemployment. He emphasised the easing of demographic pressures on the labour market, which, in combination with declining participation rates, have resulted in low overall growth of the labour force. It is noteworthy that unemployment rates in 2018 have remained at 2012 levels, although discouraged unemployment has increased.

Dr Assaad opened the second session by introducing findings about job creation and economic vulnerability. He emphasised that despite the recent pick-up in GDP growth, employment rates have continued to decline, suggesting that the current recovery is essentially jobless. In terms of quality, employment in Egypt is becoming increasingly informal, as public sector employment continues to decline and private formal employment continues to grow very slowly. Growth has been primarily in informal employment outside fixed establishments, which is mainly driven by growth of the construction and transport industries. Although this type of employment has become more regular as the economy recovers, it makes workers vulnerable to future downturns.

Dr Mona Amer discussed her findings that youth labour force participation fell between 2012 and 2018, particularly among young men. In addition, the share of precarious employment in total youth employment increased substantially between 1998 and 2018, and even more sharply among employed women and post-secondary graduates.

The third session on women and work began with Dr Caroline Krafft, who showed that rural women have low, but under-estimated, economic participation. Women in rural areas are particularly engaged in rearing livestock and poultry, and in domestic work. Moreover, Dr Krafft said that gender role attitudes are equitable for education, but not for work.

Dr Reham Rizk, second presenter at the session, noted that women are less likely to engage in or own non-agricultural enterprises than men. Furthermore, the trend in participation in enterprises has been declining for men though it has been flat for women. Another result reveals that women-owned enterprises are more likely to be informal, to have less capital and to be home-based.

The second day was kicked off with a presentation by Dr Irene Selwaness, which highlighted that between 2012 and 2018, the social insurance coverage gap widened among all workers. Dr Selwaness suggested the existence of an informality trap since the coverage gap does not close with years of work. Also, fewer households in 2018 compared with 2012 received at least one type of social protection benefit or had a socially insured working member.

Dr Imane Helmy’s presentation introduced results showing that almost a quarter of Egyptian households have experienced food insecurity and 16% have been exposed to at least one type of shock – economic, social, health-related or environmental. In addition, poor households are four times as likely to have experienced food insecurity and more than twice as likely to have experienced shocks compared with rich households. Dr Helmy mentioned that households mostly use consumption rationing (reduced spending on health, food or education) and social capital to cope with shocks.

The significance of the first session of Day 2 was emphasised by the chair, Dr Hania Sholkamy. First, she highlighted the linkage between vulnerability and poverty (current and future) to data on the labour market and on jobs. Second, she stressed that factoring in vulnerability provides a well-rounded framework for thinking about employment, unemployment or forms of employment and employability.

The session also addressed issues surrounding gender, such as coverage gaps, job quality, representation and vulnerability to shocks. Dr Nevine Kabbage, Deputy Minister of Social Solidarity, further complemented the session’s importance by stating that social protection policies are essential for all socio-economic levels in Egypt.

The second session of the day dealt with health and migration issues, starting off with Dr Anda David explaining that the share of the urban population in Egypt has remained at 43% since 1970. Other significant results emphasised that internal migration rates have been low in Egypt, which explains the stagnant urbanisation rate, whereas international migration rates fell between 2012 and 2018.

In terms of issues surrounding health, Dr Maia Sieverding provided the session with results such as 17% of Egyptians aged five and above have some sort of disability. Dr Sieverding also mentioned that 45% of both men and women suffer from low levels of subjective wellbeing, while low levels of wellbeing are most common among the poor in Greater Cairo (67%).

The last session included three presentations under the umbrella of wages and dynamics of public sector hiring. Dr Mona Said’s presentation showed that the period of sustained real wage growth from 1998 to 2012 in Egypt was reversed, with an average decline in wages of 9% between 2012 and 2018. In addition, wage inequality increased between 2012 and 2018, with the share of low-waged workers increasing to reach 57% of all wage workers. Lastly, women continue to earn more in the public sector than in the private sector. The gender wage gap has widened in the private sector to reach 60% in 2018.

Dr Sevane Ananian followed with his findings on wages in Africa, including Egypt. He characterised the recent trends in wages, pay gaps and wage disparities. He explained that though slowly growing, wage employment in Africa is limited and imbalanced by gender. Further findings stressed the gender segmentation of the labour market by occupation, which contributes to men being better paid in almost all the countries studied.

Dr Ghada Barsoum concluded the session by discussing the continued preference for public sector employment among new entrants. Dr Barsoum also stated that the public sector workforce is becoming more educated, slightly more feminised, and getting older.

The final session stressed the importance of a sound data infrastructure to support research and policy-making in the area of labour markets and social policy. Speakers emphasised that the data from the ELMPS, which are publicly available through the ERF data portal, can support a myriad of research topics. This conference merely scratched the surface of what kinds of analysis are possible with the data.

 

Go to conference page.

 

Tags: , , , ,

  • Ragui Assaad
    Ragui Assaad
    Professor and Freeman Chair for International Economic Policy, Humphrey School of Public Affairs, University of Minnesota

Most read

Trust in Lebanon’s public institutions: a challenge for the new leadership

Lebanon’s new leadership confronts daunting economic challenges amid geopolitical tensions across the wider region. As this column explains, understanding what has happened over the past decade to citizens’ trust in key public institutions – parliament, the government and the armed forces – will be a crucial part of the policy response.

Qatarisation: playing the long game on workforce nationalisation

As national populations across the Gulf have grown and hydrocarbon reserves declined, most Gulf countries have sought to move to a more sustainable economic model underpinned by raising the share of citizens in the productive private sector. But, as this column explains, Qatar differs from its neighbours in several important ways that could render aggressive workforce nationalization policies counterproductive. In terms of such policies, the country should chart its own path.

Small businesses in the Great Lockdown: lessons for crisis management

Understanding big economic shocks like Covid-19 and how firms respond to them is crucial for mitigating their negative effects and accelerating the post-crisis recovery. This column reports evidence on how small and medium-sized enterprises in Tunisia’s formal business sector adapted to the pandemic and the lockdown – and draws policy lessons for when the next crisis hits.

Economic consequences of the 2003 Bam earthquake in Iran

Over the decades, Iran has faced numerous devastating natural disasters, including the deadly 2003 Bam earthquake. This column reports evidence on the unexpected economic boost in Bam County and its neighbours after the disaster – the result of a variety of factors, including national and international aid, political mobilisation and the region’s cultural significance. Using data on the intensity of night-time lights in a geographical area, the research reveals how disaster recovery may lead to a surprising economic rebound.

Qatar’s pursuit of government excellence: promises and pitfalls

As Qatar seeks to make the transition from a hydrocarbon-based economy to a diversified, knowledge-based economy, ‘government excellence’ has been identified as a key strategic objective. This column reports what government effectiveness means in terms of delivery of public services, digitalisation of services, and control of corruption – and outlines the progress made to date on these development priorities and what the country needs to do to meet its targets.

The impact of climate change and resource scarcity on conflict in MENA

The interrelationships between climate change, food production, economic instability and violent conflict have become increasingly relevant in recent decades, with climate-induced economic shocks intensifying social and political tensions, particularly in resource-constrained regions like MENA. This column reports new evidence on the impact of climate change on economic and food production outcomes – and how economic stability, agricultural productivity and shared water resources affect conflict. While international aid, economic growth and food security reduce the likelihood of conflict, resource scarcity and shared water basins contribute to high risks of conflict.

A Macroeconomic Accounting of Unemployment in Jordan:  Unemployment is mainly an issue for adults and men

Since unemployment rates in Jordan are higher among young people and women than other groups, unemployment is commonly characterised as a youth and gender issue. However, the majority of the country’s unemployed are adults and men. This suggests that unemployment is primarily a macroeconomic issue challenge for the entire labour market. The appropriate response therefore is coordinated fiscal, monetary, structural and institutional policies, while more targeted measures can still benefit specific groups.

The green energy transition: employment pathways for MENA

The potential employment impacts of green and renewable energy in the Middle East and North Africa are multifaceted and promising. As this column explains, embracing renewable energy technologies presents an opportunity for the region to diversify its economy, mitigate the possible negative impacts of digitalisation on existing jobs, reduce its carbon footprint and create significant levels of employment across a variety of sectors. Green energy is not just an environmental imperative but an economic necessity.

Tunisia’s energy transition: the key role of small businesses

Micro, small and medium-sized enterprises (MSMEs) play a critical role in Tunisia’s economy, contributing significantly to GDP and employment. As this column explains, they are also essential for advancing the country’s ambitions to make a successful transition from reliance on fossil fuels to more widespread use of renewable energy sources. A fair distribution of the transition’s benefits across all regions and communities will secure a future where MSMEs thrive as leaders in a prosperous, inclusive and sustainable Tunisia.

Global value chains, wages and skills in MENA countries

The involvement of firms in production across different countries or regions via global value chains (GVCs) can make a significant contribution to economic development, including improved labour market outcomes. This column highlights the gains from GVC participation in terms of employment quality in Egypt, Jordan and Tunisia. Given the high unemployment, sticky wages and wide skill divides that are common in the MENA region, encouraging firms to participate in GVCs is a valuable channel for raising living standards.