Economic Research Forum (ERF)

Egypt’s labour market: facts and prospects

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.


Most read

Fair competition is needed to empower women economically in the Arab world

The participation rates of women in the labour market in Arab countries are the lowest in the world. This column argues that remedying the under-representation of women in the labour force is a social and economic imperative for the region. There are three dimensions for action to realise the potential of Arab women: amending laws and regulations; instilling fair competition in markets; and promoting the digital economy.

Arab countries are caught in an inequality trap

Conventional wisdom, based mainly on surveyed household income distribution statistics, suggests that inequality is generally low in Arab countries. At the same time, little attention has been devoted to social inequalities, whether in terms of outcomes or opportunities. This column introduces a forthcoming report, which offers a different narrative: based on the largest research project on the subject to date and covering 12 Arab countries, the authors argue that the region is caught in an inequality trap.

Recession without impact: why Lebanese elites delay reform

The survival of Lebanon’s political elites is highly dependent on the wellbeing of the economy. Why then do they delay necessary reform to avoid crisis? This column examines the role of politically connected firms in delaying much-needed economic stabilisation policies.

Competition laws: a key role for economic growth in MENA

Competition policy lacks the attention it deserves in the countries of the Middle East and North Africa (MENA), a region characterised by monopolies and lack of market contestability. As this column explains, there are many questions about the extent of anti-competitive barriers facing new market entrants in the region. What’s more, MENA’s weak overall performance on competition is likely to be hindering economic growth and the path towards structural transformation.

The Egyptian economy is still not creating good jobs

Growth in Egypt has recovered substantially since the downturn following the global financial crisis and the political instability following the 2011 revolution – but what has happened to jobs? This column reports the results on employment conditions from just released data in the 2018 wave of the Egypt Labor Market Panel Survey.

How Egyptian households cope with shocks: new evidence

Managing risks and reducing vulnerability to economic, social, environmental and health shocks enhances the wellbeing of households and encourages investment in human capital. This column explores the nature of shocks experienced by Egyptian households as well as the coping mechanisms that they use. It also examines the relationship between such risks and job formality and health status.

The future of Egypt’s population: opportunities and challenges

Egypt’s potential labour supply depends on the growth and changing composition of its working-age population. This column reports the latest data on labour supply and fertility rates, concluding that the country has a window of opportunity with reduced demographic pressures to try to address longstanding structural challenges for the labour market.

Egypt’s labour market: facts and prospects

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.

An appeal for Sudan’s future

Sudan today is on a knife-edge: it can evolve toward peace and democracy – or spiral into instability and violence. As this Project Syndicate column argues, vital and timely international assistance can make the difference between success and failure for the new government.

Domestic demand and competition: a new development paradigm for MENA

A lack of competition in domestic and regional markets is holding back development in the Middle East and North Africa. This column argues that the region and the international community must ensure that barriers to market entry and exit are eliminated, and that independent regulatory bodies at the national and regional levels help to promote domestic demand as the main engine for sustainable and inclusive growth.