<p>Formalizing firms can potentially increase the tax base, expand safety and social protections for workers, create good jobs, and promote firm growth. However, the costs and processes of formality may be too challenging for some firms to bear. Thus, informal firms may not be able to survive the transition to formality, and attempts to expand formality through more intensive enforcement may be harmful and counterproductive to job creation and growth. This paper investigates the potential for currently informal firms to formalize in Egypt. The paper compares the characteristics of formal and informal micro and small nonagricultural firms and identifies the extent of similarities and potential for formalization. The analysis finds that, beyond firm size and whether the firm operates in a fixed establishment, the basic and easily observable characteristics of firms are not closely linked to formality. Firm age, productivity, and owner characteristics, such as education, are strongly predictive of formality. The predicted probability of being formal is greater than 50% for only about 26% of informal firms, suggesting most firms are not good candidates for formalization. The paper develops profiles (groups and clusters) of similar firms to identify those with a higher potential for formalization.</p>

I argue in this paper that although recent developments had temporarily reduced demographic pressures on the Egyptian labor market, such pressures will return with a vengeance in the next decade. T...

The COVID-19 pandemic has not only led to a health crisis, but also to economic and labour market crises. In an effort to avert the public health threat, countries in the Middle East and North Africa (MENA) initially put in place some of the world’s most stringent government responses. This paper explores how labour market outcomes for MENA workers have evolved during the COVID-19 pandemic. The paper uses the International Labour Organization (ILO) and the Economic Research Forum (ERF) COVID-19 MENA Monitor phone surveys in Egypt, Jordan, Morocco, Sudan and Tunisia, with waves spanning November 2020 to August 2021. Analyses examine outcomes of employment, unemployment, and labour force participation, along with hours of work and hourly wages. Results show differences in the evolution of pandemic-era labour markets by workers’ gender, age, and education, along with their February 2020 labour market status and industry, as well as their pre-pandemic income. Employment rates have largely recovered and hours of work generally increased. Inequality in wages was initially exacerbated by the pandemic, but there has been at least some recovery on this margin as well. The webinars, reports and papers are supported by the project “Advancing the Decent Work Agenda in North Africa (ADWA’)”, implemented by the International Labour Organization (ILO) and the Swedish International Development Cooperation Agency (Sida). The project aims to promote job-rich growth, International Labour Standards (ILS) and their application at the enterprise level. It works at the policymaking level in order to support evidence-based decisions on key dimensions of the Decent Work Agenda. This project was made possible by the generous contributions of the International Labor Organization (ILO), Agence Française de Développement (AFD), The Foreign Commonwealth and Development Office (FCDO) of the Government of the United Kingdom, the World Bank and the Arab Fund for Social and Economic Development (AFESD).

Youth in Egypt hold rising aspirations for their adult lives, yet face an increasingly uncertain and protracted transition from school to work and thus into adulthood. This paper investigates how labor market insertion has been evolving over time in Egypt and how the nature of youth transitions relates to gender and social class. The study examines 19,925 respondents from the 2012 wave of the Egypt Labor Market Panel Survey. We demonstrate that recent youth cohorts face poorer chances of transitioning into a good job than previous cohorts, despite large increases in educational attainment. Social class is playing an increasing role in determining the success of the transition from school to work in Egypt. Whether youth successfully make transitions to formal jobs, embark on such transitions and fail, or pursue more traditional careers in informal employment or family businesses or farms depends on a complex and changing interaction between their own educational attainment and the resources of their families. In light of these findings, we discuss the policies that can help facilitate more successful transitions for struggling youth in Egypt.

The transition to adulthood around the world is increasingly characterized by young people’s desire to form independent households. Forming such households in Egypt requires buying or building a dwelling or obtaining a rental unit. Policies governing housing markets, such as rent control, and limited financing options have historically made access to housing for young couples challenging. In this paper, we use a difference-in-difference approach to evaluate how the liberalization of rental markets in Egypt affected the timing of marriage. We find that Egypt’s 1996 rental reforms accelerated marriages and led to a reversal in the trend of rising age at marriage.

This paper investigates the impact of migration shocks on housing conditions and rental prices for the local population. The identification comes from the regional variation in the large influx of Syrian refugees to Jordan in the wake of the Syrian conflict which started in 2011. Combining detailed household-level surveys with information on where Syrian refugees are concentrated, we employ a difference-in-difference approach and show that the influx had negative impacts on housing quality and increased the rents paid by local households. Residential mobility also increased in response to the flow of refugees, and this could have acted as a channel through which housing quality decreased and may have attenuated the impact on rents. The effects are more pronounced among poorer and less-educated households, those who are arguably in competition with refugees for housing.

Creating jobs, especially good jobs, is one of the greatest challenges facing Egypt. This paper investigates the nature of job growth in Egypt, including the firm, industry, and worker characteristics that are related to job growth. Using data from Egypt’s establishment censuses linked to various firm and labor surveys, we examine job growth in private sector establishments over 1996–2017. We find that job growth has primarily followed a labor absorption paradigm, with job growth unrelated to productivity and highest for firms with more informal employment.

Education is widely considered as the most important path to social mobility in the Middle East and North Africa (MENA), yet there are very few studies of the extent to which it fulfills this promise. In this paper we use survey data from eight MENA countries to understand the relationship between schooling attainment of youth and the circumstances into which they are born, namely gender, parental education, parental household's position in the per capita expenditure distribution and urban/rural location. We consider various attainment levels from the chance of entering any kind of schooling to attending upper secondary schooling and address the fact that many children are still in school by using a censored ordered probit model. We find high degrees of inequality of opportunity in school attainment, especially with respect to attending secondary school. The most opportunity unequal countries in this respect are Iran, Iraq, Syria, and Yemen. Jordan, Palestine and Tunisia are the least opportunity unequal in this respect. This paper builds on a previous study of inequality of opportunity in educational achievement, which showed that in most MENA countries, learning opportunities are not equal. In this study, we find that - even in attending and staying in school- the playing field is not level.

In a nutshell • Jordan was on a path of improving educational outcomes and improved housing quality prior to the onset of the Syrian refugee crisis and continued on that path since then. • Jordanian education authorities accommodated the influx of Syrian students primarily by adding a second shift to existing schools, but those newly added second shifts were primarily for Syrian students. • Measures of school crowding for Jordanian students were essentially unaffected in areas with high proportions of Syrian students. • Out of 12 school outcomes, only one appears to be negatively affected by the influx of Syrian refugees, suggesting that the adverse effects on education of Jordanians were limited. • The housing quality of poorer Jordanian households in areas exposed to the Syrian refugee influx improved less rapidly than that of their counterparts elsewhere in Jordan, suggesting some negative impact on groups directly competing with refugees for housing. • We recommend targeting poorer Jordanian households in affected areas with rent subsidies and low-interest mortgages to mitigate these adverse effects on them.

Despite rapidly rising female educational attainment and the closing if not reversal of the gender gap in education, female labor force participation rates in the MENA region remain low and stagnant, a phenomenon that has come to be known as the "MENA paradox." Even if increases in participation are observed, they are typically in the form of rising unemployment. We argue in this paper that female labor force participation among educated women in four MENA countries - Algeria, Egypt, Jordan and Tunisia - is constrained by adverse developments in the structure of employment opportunities on the demand side.Specifically, we argue that the contraction in public sector employment opportunities has not been made up by a commensurate increase in opportunities in the formal private sector, leading to increases in female unemployment or declines in participation. We use multinomial logit models estimated on annual labor force survey data by country to simulate trends in female participation in different labor market states (public sector, private wage work, non-wage work, unemployment and non-participation) for married and unmarried women of a given educational and age profile. Our results confirm that the decline in the probability of public sector employment for women with higher education is associated with either an increase in unemployment or a decline in participation.

This paper examines whether the Action Plan for Promoting Employment and Combating Unemployment, a labor market intermediation program adopted by the Algerian government in 2008, reduced the informality of employment in Algeria. Using repeated cross-section data from the Household Survey on Employment for the period from 1997 to 2013, and a difference-in-difference methodology, we estimate whether the Action Plan has reduced the probability that workers are employed informally in enterprises of more than 5 workers -- the type of enterprise that is most likely to be directly affected by the Action Plan. Our results show that the Action Plan has in fact contributed to reducing employment informality in such enterprises, but with heterogeneous effects. More precisely, it reduced informality for employees of establishments of 10 workers or more but had no significant effects on informality for those working in enterprises of 5 to 9 workers. Furthermore, when we restrict our estimates to new entrants only, we do not find statistically significant effects.

There are two prominent accounts of the 2011 Arab Uprisings and the role of education in youth mobilization. The first argument focuses on grievances: this hypothesis rests on a link between educational attainment and youth job aspirations that the labor market has not been able to fulfill. These unfulfilled aspirations fuel grievances and, hence, protest. The other argument focuses on mobilization costs. The central hypothesis is that education provides the skills, knowledge and/or contacts that facilitate political participation. This paper assesses and attempts to disentangle these two accounts by examining the effect of education on measures of grievance, political knowledge, and political participation using rich youth surveys from Egypt and Tunisia. In order to partially deal with the endogeneity of education, we control for parental education and sibling fixed effects. We find a strong and robust correlation of education with political knowledge and political participation, but not with grievances.

We explore the methodological challenges of estimating the effects of intimate partner violence (IPV) against the mother on the educational outcomes of her children. We tackle the problem of potential endogeneity and non-random selection of children into situations where they are exposed to IPV using non-parametric matching methods and parametric instrumental variable methods. Using Colombia's 2005 Demographic and Health Survey (DHS), we find that IV and non-IV estimators produce qualitatively similar results at varying degrees of precision, for some educational outcomes. Therefore, exogeneity of IPV to various education outcomes cannot be taken for granted; appropriate methods need to be used to study its causal effects.