Returns to Qualification in Informal Employment: A Study of Urban Youth in Egypt
AbstractInformal employment is a reality for roughly two-thirds of economically active youth in urban Egypt, and it has been argued to be correlated with poverty, poor working conditions, and few opportunities for advancement. This essay analyzes whether informal employment rewards job qualification measures, using survey data from 2006 and a Blinder-Oaxaca wage decomposition. After creating a taxonomy of formal, para-formal, and informal modes of qualification, it is shown that formal public and formal private jobs tend to reward those with formal qualifications, while informal employment tends to reward informal qualification mechanisms. The notion that informal employment does not reward qualification is disputed. Furthermore, there are large wage premia based on formality of employment, region, and gender. The results can be explained by analyzing the formality decision and the qualification decisions of youth. This suggests an alterative explanation for “dualistic” outcomes in youth labor markets.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 12599.
Date of creation: Sep 2008
Date of revision:
informal employment; youth employment; human capital; developing country labor markets; wage regression;
Find related papers by JEL classification:
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-09 (All new papers)
- NEP-ARA-2009-05-09 (MENA - Middle East & North Africa)
- NEP-CWA-2009-05-09 (Central & Western Asia)
- NEP-LAB-2009-05-09 (Labour Economics)
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