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The Effects of Public Sector Hiring and Compensation Policies on the Egyptian Labor Market

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  • Ragui Assaad

    (University of Minnesota)

Abstract

This paper examines the combined impact of the employment guarantee for graduates and public sector compensation policies on the Egyptian labor market. Besides contributing to an unsustainable rate of growth in the government labor force, these policies encouraged queuing for government jobs and contributed to high graduate unemployment rates, and reduced graduate employment in the private sector. Despite substantial wage erosion in the public sector in recent years, government wages, when appropriately corrected for observed and unobserved heterogeneity, are on par with private sector wages, especially for graduates. When combined with the more attractive non-wage aspects of government jobs, these compensation levels explain the attractiveness of public sector employment to graduates. Government pay scales are especially advantageous to female secondary school graduates who appear to face strong discriminatory barriers in the private sector.

Suggested Citation

  • Ragui Assaad, 1995. "The Effects of Public Sector Hiring and Compensation Policies on the Egyptian Labor Market," Working Papers 9517, Economic Research Forum, revised 08 Oct 1995.
    • Handle: RePEc:erg:wpaper:9517
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