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Heterogeneity in the Egyptian informal labour market: choice or obligation?

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  • Rawaa Harati

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper provides historical and empirical arguments that can explain the development of the Egyptian informal sector. After recalling the various approaches proposed in the literatures, it identifies the configuration that overrides the Egyptian labor market by allowing for the heterogeneity of informal jobs and therefore the existence of different segments within the informal sector using a mixture model. It concludes that the Egyptian informal labor market in 2006 was composed of two segments with a distinct wage equations. This may point to the existence of barriers to entry to each sector, e.g. fixed cost related to social stigma which prevent people from working in the sector which offers them the highest expected wage.

Suggested Citation

  • Rawaa Harati, 2013. "Heterogeneity in the Egyptian informal labour market: choice or obligation?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00820783, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00820783 Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00820783
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    References listed on IDEAS

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    1. Desai, Meghnad & Shah, Anup, 1988. "An Econometric Approach to the Measurement of Poverty," Oxford Economic Papers, Oxford University Press, vol. 40(3), pages 505-522, September.
    2. Amuedo-Dorantes, Catalina, 2004. "Determinants and Poverty Implications of Informal Sector Work in Chile," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 347-368, January.
    3. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
    4. Delhausse, Bernard & Luttgens, Axel & Perelman, Sergio, 1993. "Comparing Measures of Poverty and Relative Deprivation: An Example for Belgium," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(1), pages 83-102.
    5. Reuben Gronau & Daniel S. Hamermesh, 2006. "Time Vs. Goods: The Value Of Measuring Household Production Technologies," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 1-16, March.
    6. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
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    Cited by:

    1. Floridi, A. & Wagner, N. & Cameron, J., 2016. "A study of Egyptian and Palestine trans-formal firms – A neglected category operating in the borderland between formality and informality," ISS Working Papers - General Series 619, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Carla Canelas, 2015. "Poverty and informality in Ecuador," WIDER Working Paper Series 112, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Informal market; development economics; finite mixture model; Egypt; segmentation; selection bias; Economie informelle; développement; modèle de mélange; Egypte; biais de sélection;

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