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Informality in Egypt: a Stepping Stone or a Dead End?

  • Jackline Wahba


    (University of Southampton, UK)

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    In the last few decades, the informal sector has played a major role in many of the LDC’s labor markets. Yet, little is known about the dynamics of this sector. This paper addresses an important question, namely whether informal employment is a stepping stone, as first argued by economists such as Fields (1975), or is it a dead end? Using evidence from the Egyptian Labor Market Panel Survey 2006, and controlling for selectivity in informal jobs, we estimate the probability of “graduating” from informal employment to semi-formal and formal jobs. The empirical findings suggest that the mobility from informal to semi-formal/formal employment is highly segmented along education and gender in Egypt. Overall, it seems that informal employment is a stepping stone for highly educated male workers, but is a dead end for the uneducated, and for female workers.

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    Paper provided by Economic Research Forum in its series Working Papers with number 456.

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    Length: 24 pages
    Date of creation: Jan 2009
    Date of revision: Jan 2009
    Publication status: Published by The Economic Research Forum (ERF)
    Handle: RePEc:erg:wpaper:456
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