Day III of ERF 20th Annual Conference: Emerging lessons from Arab countries in transition

The third and final day of the ERF 20th Annual Conference started with discussions around lessons emerging from the experience of Arab countries in transition. Chaired by Noha El-Mikawy (Ford Foundation), plenary session 3 gathered a number of distinguished economists: Gouda Abdel-Khalek (Cairo University); Georges Corm (Georges Corm Consulting Office); Paul Salem (Middle East Institute); and Zafiris Tzannatos (International Labor Organization).

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In his presentation on ‘Social Justice: lessons of experience for Egypt‘, Gouda Abdel-Khalek (Cairo University) examined the meaning behind ‘bread, freedom and social justice’, which became the main slogan of the uprising in Egypt. He discussed how tricky it is to establish social justice in times of political unrest. To support his argument, Abdel-Khalek referred to social injustice indicators that Egyptian society has been witnessing since January 25th, including decreasing wage share to GDP, rising unemployment (youth unemployment over 30%), rising poverty, increasing urban/rural divide, poor access to water and child undernutrition. It seems very little has been done to achieve the slogan of the revolution; therefore, Abdel-Khalek stressed on the need for reforms touching upon taxation systems and subsidizing agricultural producers.

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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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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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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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The more we know, the better we become

In an attempt to solve development challenges, more accurately real problem gaps of a society,a decision maker  requires access to information. Evidence based data, information and research knowledge is one way to identify what the problem is, where the gaps are, measure its magnitude, and guide decisions to achieve rational development policies. Enabling access to micro data, is one means to ensure the continuous initiation of a wealth of new, fresh and policy relevant analysis of  reform, the Economic Research Forum (ERF) has made accessible its comprehensive Open Access Micro Data available online on household and labor market panel surveys. Feel free to check it out!

The Egyptian Labor Market Panel Survey

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Today,the Economic Research Forum (ERF) holds a two-day event to announce the main findings of ‘Egypt Labor Market Panel Survey (ELMPS) 2012’ from the 7-8th December 2013. During the event, ERF plans to disseminate results of the ELMPS 2012 survey and present a number of research papers that have built on the findings of the survey.

In this spirit, ERF launched a research project that aim at providing a detailed understanding of how political instability and challenging economic conditions have affected the performance of the Egyptian labor market in terms of the structure and evolution of main trends, female participation, youth unemployment and aspirations, labor market dynamics, labor market earnings, the contribution of MSEs to employment and income generation, international migration, among others. Some of the papers that have been commissioned and completed are available here.

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Sparking and catching fire

This post was written by Dr. Roksana Bahramitash

ERF workshop on “Women Economic Empowering the MENA Region”

ERF workshop on “Women Economic Empowering the MENA Region”

The world of politics and political campaign is consumed by women’s civil rights; from Quebec leading provincial campaign passing the Quebec Charter of Values, which bans hijab to defend women’s right, to Muslim Brotherhood conservative faction who is campaigning for more traditional role for women. Women’s civil rights remain at the center of attention.

Yet in a world where the poorest 40 percent account for less than 5 percent of global income and gender gap remains a serious issue throughout the world, so little is mentioned about women’s socio-economic rights. The issue is more acute in the MENA region, which has the lowest female labor force participation rates and the highest ratios of female to male unemployment rate.

As a woman from the region, I am always shocked when I travel through the region and make my way in an around the poor neighborhoods; where women walk in and out of markets and shops to buy their basic food. What shakes me is a simple calculation between the prices of basic food and that of the minimum wages, I am sure this calculation has to be behind what women can or cannot afford as they continue to be the one who puts food on the table. In those circumstances, calculating household income against the prices of basic commodities, food, rent, medical bills, utilities and transport seems like an impossible job. It just does not make sense; people’s income and the prices of their basics fails elementary math. The question is how does the household balance the budget. And of course many don’t and end up in absolute poverty.

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