Economic Research Forum (ERF)

Egypt’s care economy needs to address deteriorating working conditions

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A robust and high-quality care economy is critical for supporting women’s employment – as both an employer of women and a mechanism for redistributing unpaid care work to the market. Yet in Egypt, despite national goals of expanding care services, employment in the sector has been shrinking, while becoming increasingly privatised. As this column reports, care jobs have also experienced worsening conditions of work, including reduced formality and the emergence of a pay penalty for care workers.

In a nutshell

Egypt’s care economy has been shrinking as a share of total employment over the past 15 years, largely driven by the retreat of the public sector; while private sector care employment has grown, it has not done so sufficiently to compensate.

Working conditions in the care economy, including social insurance coverage, have deteriorated over time, due in part to privatisation; where there was once pay premium for care workers, there is now a pay gap.

Sustainable funding commitments are essential to ensure access to high-quality care and decent working conditions for care workers; such investments support human development and have positive spillovers onto the whole economy.

The care economy is vital as both an employer of women and a support for working women. Worldwide, 19.3% of employed women work in the care economy (International Labour Organization, ILO, 2018). In the Arab states, 53% of women’s employment is in care employment – the largest share of any region. Efforts to redistribute care work from households (disproportionately women) to the market require a robust paid care economy offering high-quality services.

Increasing the extent of paid care employment is also closely aligned with national goals in Egypt. For example, national plans include efforts to expand early childhood care and education, increase the quantity and quality of education, and improve access to health services (Ministry of Social Solidarity, 2018; World Bank, 2018a, 2018b; Ministry of Planning and Economic Development, 2015).

New research (Krafft and Ehab, 2023) summarised in what follows analyses data from Egypt’s Labor Force Surveys (LFS) to examine trends in care employment and working conditions over the period 2009-21 (OAMDI, 2023). Care employment is defined based on working in a care occupation (health professionals; teaching professionals; social care workers) and/or care industry (education; health and social work; paid domestic work). The analysis focuses on wage workers.

Shrinking and increasingly privatised care employment in Egypt

The share of the care economy in wage employment in Egypt has been shrinking over time, falling from 20% in 2009 to 17% in 2021 (see Figure 1). Care employment was more than half (59%) of women’s total wage employment in 2021.

Figure 1: Declining care employment and privatisation of care employment

Trends in care employment, public sector care employment, and private sector care employment (percentages of total wage employment), by sex, 2009 compared with 2021

Source: Authors’ calculations based on LFS 2009 and 2021

Care employment has become increasingly privatised. The percentage of care employment that is in the public sector has decreased substantially, while the share of the private sector has increased over time. The share of the private sector in care employment rose from 13% in 2009 to 23% in 2021. The growth in private sector care employment has not been enough to compensate for the retreat of the public sector, leading to declines in overall care employment.

Deteriorating working conditions in care employment

A key aspect of working conditions is contributory social insurance coverage (which taxes wages in order to provide old-age pensions). Registration with social insurance means that a wage worker is formally employed and is covered by a host of other regulations and benefits.

Social insurance coverage in care employment has declined over time: from 91% of care employment in 2009 to 84% in 2021 (see Figure 2).

This decline has not been due to changes in care employment in the public sector, which retained nearly universal coverage. Instead, the increase in private sector employment in total care employment has been compounded by a decline in social insurance coverage in private sector care employment. In 2009, 56% of private sector care employment had social insurance coverage, but this had dropped to 38% by 2021.

Figure 2: Declining social insurance coverage in care employment, driven by the private sector

Trends in social insurance coverage (percentage of care employment with social insurance coverage), by sex and sector, 2009 compared with 2021

Source: Authors’ calculations based on LFS 2009 and 2021

Emergence of a care pay gap

In addition to deteriorating working conditions, a care pay gap has emerged in Egypt over time. In 2009, there was only a one Egyptian pound difference between average care wages and non-care wages (see Figure 3). Wages in care employment have declined relative to non-care employment, with a care pay penalty of 257 pounds per month as of 2021. This is equivalent to pay that is around 9% lower.

Figure 3: A care pay gap has emerged

Mean care employment monthly wage minus mean non-care employment monthly wage (in real 2021 terms) by sex, 2009 compared with 2021

Source: Authors’ calculations based on LFS 2009 and 2021

Conclusion: a robust care sector needs sustained support

Investments in the care sector support human development and result in spillovers to the whole economy, providing a high return on investment (ILO and UN Women, 2021; Abbott, 2021). Furthermore, the paid care economy is an important employer for women and facilitator of their employment, providing an indispensable source of care services.

The need to recognise, to reduce and particularly to redistribute care work requires a robust paid care economy offering high-quality care services. There is also increasing recognition of the importance of rewards (both pay and working conditions) and representation in paid care work (ILO, 2018).

Despite the importance of the care sector, paid care employment has been shrinking as a share of employment in Egypt over the period 2009-21. Calls to recognise, reduce and redistribute care work emphasise both the redistribution of care work from women to men and from households to society (ILO, 2018).

Egypt is struggling with redistribution from households to society. Additional unpaid care responsibilities, declining care services, and decreasing employment in the care economy may all be factors contributing to declining women’s employment in Egypt (Krafft et al, 2022).

Care employment has become increasingly privatised, but the growth of paid care employment in the private sector has not been large enough to compensate for the retreat of the public sector. In addition, the privatisation of care work has contributed to deteriorating working conditions, such as falling social insurance coverage. A care pay gap has also emerged, where care workers earn lower wages than other workers.

Improving working conditions and wages in the care economy can also improve the quality of care. High rates of turnover in the care sector as a result of low wages may have a negative impact on the quality of care (Duffy et al, 2021). One challenge with improving wages and working conditions is ensuring that care services remain affordable (ILO, 2018).

Public provision of care services improves care employment job quality (ILO, 2018). Continuing efforts to shrink public sector employment are thus in tension with creating a robust care economy. Developing a new social contract that ensures the availability of care services may require revisiting the role of the public sector. Universal coverage of care services by public provision or public funding and multi-modal provision could be a long-term goal. In the short run, expansions should target the most vulnerable (ILO and UN Women, 2021). Sustainable public funding is critically important for robust paid care services and job quality.

Further reading

Abbott, Sam (2021) ‘The Child Care Economy: How Investments in Early Care and Education Can Fuel U.S. Economic Growth Immediately and over the Long Term’, Washington Center for Equitable Growth.

Duffy, Mignon, Reagan Baughman and Kristin Smith (2021) ‘The Flip Side of Turnover: Employment Transitions and Occupational Attachment Among Low-Wage Care Workers in the United States’, Feminist Economics 27(4): 62-89.

ILO (2018) ‘Care Work and Care Jobs for the Future of Decent Work’.

ILO and UN Women (2021) ‘A Guide to Public Investments in the Care Economy: Policy Support Tool for Estimating Care Deficits, Investment Costs and Economic Return’.

Krafft, Caroline, Ragui Assaad and Caitlyn Keo (2022) ‘The Evolution of Labor Supply in Egypt, 1988-2018’, in The Egyptian Labor Market: A Focus on Gender and Vulnerability edited by Caroline Krafft and Ragui Assaad, Oxford University Press.

Krafft, Caroline, and Maye Ehab (2023) ‘Working Conditions in the Paid Care Economy in Egypt: Improvement or Deterioration?’, ERF Working Paper No. 1657.

Ministry of Planning and Economic Development (2015) ‘Egypt Vision 2030’.

Ministry of Social Solidarity (2018) ‘Early Childhood Development Program – Egypt’, Cairo.

OAMDI. 2023. ‘OAMDI, 2023. Egypt – Labor Force Survey (LFS). Various Rounds.’

World Bank (2018a) ‘Supporting Egypt Education Reform Project – Project Appraisal Document’.

World Bank (2018b) ‘Women Economic Empowerment Study’.

Acknowledgments

This paper was supported by a Ford Foundation grant to ERF for the project ‘Renewing the Social Contract: Working Toward a More Inclusive Social Insurance System in Egypt’. The authors appreciate the comments of participants in the ‘Workshop on social insurance in Egypt’, particularly discussant Salma Nasser.

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  • Caroline Krafft
    Caroline Krafft
    Associate Professor, Humphrey School of Public Affairs, University of Minnesota
  • Maye Ehab
    Maye Ehab
    Institute for Employment Research (IAB), Nuremberg and University of Bamberg, Germany

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