How can we make the Egyptian people employable?

Labor market is a valuable pillar to achieve economic and social progress and is key to alleviating poverty and promoting inclusion in Egypt. This is why labor market indicators are among the most timely and important measures of economic performance. The Economic Research Forum (ERF) recognizes the value and determines the need to comprehensively study the Egyptian Labor markets. Hence the ELMPS survey- The Egyptian Labor Market Panel Survey.

Timing of the survey results is key, after the January 25th revolution Egypt is no longer the same. Egyptians calling for their ‘right to information Access’, people need to know. ‘To complement two previous surveys of 1998 and 2006, ERF carried out a new round of the Egypt Labor Market Panel Survey (ELMPS) in 2012. It thus marks the third round of a longitudinal survey that tracks the labor market and demographic characteristics of households and individuals interviewed in the two previous rounds.’ (ERF website)

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Unemployment rate is a misleading indicator to the labor market, conventional or not?

As we know, the number of people at work is generally related to whether an economy is growing or not. In other words, unemployment can be thought of as a double-edged sword; when economic activity is high, more people are needed to produce the higher amount of goods and services. Thus, it is very important to measure different aspects of the labor market in order to get a better feel for the health of the economy. The unemployment rate is probably the best-known labor market measure and certainly one of the most widely quoted.

The last session of the ERF’s Conference “The Egyptian Labor Market in a Revolutionary Era: results from the 2012 survey (ELMPS)” was a panel discussion on the labor markets in Egypt; we had the chance to interview Ragui Assaad (University of Minnesota), who was one of the panelists.  He argues that the unemployment rate, while useful, does not take into account a number of important features of the labor market, for example, it doesn’t show how the economy is doing during economic crisis and its effect on the labor market.

But is the unemployment rate really the most accurate indicator to the health of the labor market?

While the unemployment rate may be considered as the most informative labor market indicator reflecting the general performance of the labor market and the economy as a whole, it does not say anything about the type of unemployment; whether it is cyclical; not having enough demand for labor to employ all those who are looking for work, or structural; a longer-lasting form of unemployment caused by fundamental shifts in an economy, such as workers’ lack of requisite job skills or inability to move out of their regions. Moreover, it does not take into consideration the informal sector which constitutes a large share of the Egyptian labor market.

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Recommendations on Egyptian labor market policies

This is a playlist for experts who were generous enough to give us a few minutes to inform the public about research they are undergoing on Labor issues in Egypt, challenges, opportunities, hick-ups, and lay a knowledge-based perspective of how things look like especially from 2006 up to 2012. Since, readers are currently employed, or were employed at some point in someway,  I would assume that Egyptians or those interested in the Egyptian labor market,  will find this playlist particularly useful.

A bit of background:
The Economic Research Forum (ERF) held a dissemination event to announce the public release of the 2012 round of the Egypt Labor Market Panel Survey (ELMPS 2012), which was carried out by ERF in cooperation with Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS). The public release of the ELMPS 2012 data provides an important opportunity for researchers to better understand the Egyptian labor market in the wake of the global financial crisis and the 25th of January, 2011 revolution. (ERF website)

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Enhancing education cannot be measured by numbers

Nelson Mandela has once said ‘Education is the most powerful weapon which you can use to change the world.’ The importance of education is unquestionable. Achieving universal primary education has actually been one of the Millennium Development Goals set by the United Nations, to be achieved by 2015. Both individuals and countries benefit substantially from increased education levels and improvements in the quality of education. Education is a necessary factor for economic development and growth. It is also the gateway of every individual to the labor market, affecting both the present and future workforce of any nation.

Given the importance of education, it has been crucial to get look at the quality of education in Egypt. This was the topic of the study conducted by Dr. Asmaa El Badawi (Research Associate ERF) using the new Egypt Labor Market Panel Survey for 2012, which she presented during ERF’s conference ‘The Egyptian Labor Market In A Revolutionary Era: Results From The 2012 Survey‘.

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Positive international migration

Trends in migration show that 15% of Egyptian household have got a migrant abroad or a returnee (as per paper by Jackline Wahba) . The main reason for international migration is that people cannot find jobs, and not that they are badly paid. Of course people migrate for better pay, to enhance their economic conditions , but primarily they leave for better job prospects or because they are unemployed. Striking patterns over the last years show that the Egyptian migrant has become more educated and more rural.

Educational Level of Migartion Over time

ELMPS survey data source. Paper by Jackline Wahba

The paper ‘Five Decades of International Migration in Egypt’ by Jackline Wahba (University of Southampton) examines international migration in Egypt and provides an overview of the trends and patterns of international migration over the past fifty years. Wahba monitors the changing profiles of migrants and compares their characteristics to non-migrants- distinguishing between current and return migrants.  She also compares between the push and pull factors behind out migration and return migration; studies the contributions of migration to skill acquisition of migrants, and analyzes savings and remittances as well.

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U-turn here and there

Did Egyptian workers become poorer or richer? Did the revolution affect how much Egyptians earn? Did inequality in earnings fall following the revolution? These are all questions that Dr. Mona Said tried to answer in her study titled “The Differential Dividends of Revolt? Wage and Inequality Adjustments in the Egyptian Labor Market in the Era of Financial Crisis and Revolution”. Through her study, Said wanted to examine what happens to real wages and whether inequality in wages has changed or not. She also wanted to see how the proportion of low waged individuals has evolved, and whether there is segregation in the labor market in Egypt.

Is the Egyptian labor force better or worse off? Rise and Fall
Using the four nation-wide labor force sample surveys (the 1988 LFSS, the 1998 ELMS, 2006 ELMPS and 2012 ELMPS), Said’s study found that wages took a U-turn in 2006; increasing following a period of wage erosion between 1988 and 1998. Real wages started rising again in Egypt by 2006, and rose even more in 2012, going back to the 1988 levels. Even though this is all good news to Egyptian labor, this is not the whole picture as the share of low waged workers has increased in 2012. The study shows that we witness an inverted U-shape in the share of workers who fall below the poverty line. Workers below the poverty line were 34% of the labor force in 1988, but this share increased in 1998, and increased again in 2012, following a fall in 2006. In addition, wage inequality rose in 2006, when compared to 1998, and remained stable since then.

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Youth aspirations and unemployment durations in Egypt

Today’s morning session at the ‘The Egyptian Labor Market In A Revolutionary Era: Results From The 2012 Survey’ conference discussed two papers showcasing 2 contributing angles to the Egyptian labor market: Youth preferences to jobs and unemployment duration. Both papers were presented during the morning session.

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راي صناع القرار: اشرف العربي وزير التخطيط

بقلم راماج ندا – منتدى البحوث الاقتصادية

في إطار المؤتمر الذي ينظمه منتدى البحوث الاقتصادية حول مسح سوق العمل المصري لعام 2012، وذلك يومي 7-8 ديسمبر 2013، أكد الدكتور/ أشرف العربي، وزيرالتخطيط، في حديثه أن الحكومة تسعى لمتابعة نتيجة المسح التتبعي لسوق العمل والذي يرصد البطالة وأحوال سوق العمل خلال الفترة من 2006 إلى 2012، بالإضافة إلى السياسات الواجب اتباعها خلال الفترة القادمة لمواجهة هذه المشاكل والتحديات.

وأوضح العربي على أن الحكومة تسعى لوضع استراتيجية متكاملة للتشغيل على أن تكون جزءاً لا يتجزأ من الخطة العامة للتنمية الاقتصادية والاجتماعية. فقد أوضح أنه إذا لم يتم تفعيل هذه التوصيات والسياسات عن طريق ترجمتها إلى برامج ومخصصات وأهداف محددة في إطار زمني محدد، فستظل هناك فجوة بين الأبحاث وما يترتب عليها من توصيات ونتائج غير مُفًعّلة. ومن هنا تبرز أهمية هذا المؤتمر حيث تستمع الحكومة إلى تقييم الخبراء والمتخصصين للسياسات والإجراءات الحالية التي تتبعها مثل تأثير حزمة تنشيط الاقتصاد -والتي تبلغ حوالي 30 مليار جنية- على البطالة وخلق فرص عمل حقيقية للشباب. كما أكد العربي أن أول من يستفيد من مثل هذه الأبحاث الجادة هم صناع القرار.

Is the Egyptian labor market post-revolution in a weaker position?

Egypt’s young people have enormous potential to drive the economic and social revitalization of their country, yet this critical sector of the population represents the vast majority of Egypt’s unemployed and underemployed.  Overall unemployment reached 13% in the fourth quarter of 2012 (CAPMAS 2012); in which youth market labor force (ages 15-24) grew 3.1% per year 1998-2006, whereas it  contracted to 4.2% in 2006-2012.

The second session in the ERF Conference on “The Egyptian Labor Market in a Revolutionary Era: Results from the 2012 Survey” focused on the main labor markets trends in Egypt. Two papers were presented in which they complement each other; Dr. Ragui Assaad presented the first paper “The evolution of labor supply and unemployment in the Egyptian Economy: 1998 – 2012“.

This paper analyzes the evolution of labor supply and unemployment in Egypt in the period from 1999 to 2012, focusing on the impact of the demographic phenomenon known as the youth bulge and the impact of the world financial crisis and the marked economic slowdown following the January 25th 2011 revolution.  It was found that the female share of the unemployed has increased from 54% in 1998 to 63% in 2012 despite the fact that they are only 23% of the labor force

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What women want?

Egypt is and remains to be a traditional society with biased gender allocation of time within the household: Men specialize in market work while most; if not all; of the family responsibilities continues to be women’s responsibilities. Nevertheless, women labor force participation is a mandatory factor for economic development. Despite the remarkable increase in women’s educational rates, sometimes more than their male counterparts, participation in the labor market remains relatively low. Are the reasons resulting to this conclusion associated mostly with women themselves? Factors like marriage, fertility, reservation wages, or women’s own preferences have a say. Or are reasons tend to be driven more by the demand side of the market, factors such as discrimination or shrinking public sector? Given the notable participation of women in the Egyptian revolution and the economic scene, ERF commissioned the paper ‘Women’s Participation in Egypt over a Decade: Empirical Evidence Using Post-Revolution Panel Data’ by Rana Hendy to study how women’s participation in labor markets has affected their economic situation from 1998 up to 2012.

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