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The asymmetric effects of twenty years of tariff reforms on Egyptian workers

Author

Listed:
  • Giorgia Giovannetti

    () (Università di Firenze)

  • Enrico Marvasi

    () (Università di Firenze)

  • Arianna Vivoli

    () (Università di Firenze)

Abstract

After more than two decades of trade liberalization, faced with deep structural problems which were exacerbated by the 2008 financial crisis and culminated in the 2011 Spring Revolution and government change, in 2016 Egypt started to protect some sectors from foreign competition. This paper assesses how tariff reforms during the 1998-2018 period affected the Egyptian labour market by focusing on real wages and job stability (i.e. having a permanent position). The empirical analysis is carried out on worker-level data from the available four waves of Egyptian Labour Market Panel Survey (ELMPS), including the recently released 2018 wave. We find that higher tariff protection tends to deteriorate labour market conditions, both lowering real wages and decreasing the probability of finding a stable job. Furthermore, tariff changes show remarkable asymmetries. There is a negative and significant correlation between tariffs increases and real wages, while the positive impact of tariff reductions turns out to be negligible and insignificant. Our findings support the view that in Egypt protectionism hampered working conditions, contributing to inequality, while liberalizations produced minor average effects.

Suggested Citation

  • Giorgia Giovannetti & Enrico Marvasi & Arianna Vivoli, 2020. "The asymmetric effects of twenty years of tariff reforms on Egyptian workers," Working Papers LuissLab 20156, Dipartimento di Economia e Finanza, LUISS Guido Carli.
  • Handle: RePEc:lui:lleewp:20156
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    File URL: https://economiaefinanza.luiss.it/sites/economiaefinanza.luiss.it/files/20156.pdf
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    References listed on IDEAS

    as
    1. Ann Harrison & John McLaren & Margaret McMillan, 2011. "Recent Perspectives on Trade and Inequality," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 261-289, September.
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    3. Erten, Bilge & Leight, Jessica & Tregenna, Fiona, 2019. "Trade liberalization and local labor market adjustment in South Africa," Journal of International Economics, Elsevier, vol. 118(C), pages 448-467.
    4. Salem, Mélika Ben & Zaki, Chahir, 2019. "Revisiting the Impact of Trade Openness on Informal and Irregular Employment in Egypt," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 34(3), pages 465-497.
    5. Aya Elewa, 2019. "Trade openness and domestic market share evidence from egypt firm-level data," Post-Print hal-02621997, HAL.
    6. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc.
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    8. Pablo D Fajgelbaum & Pinelopi K Goldberg & Patrick J Kennedy & Amit K Khandelwal, 2020. "The Return to Protectionism," The Quarterly Journal of Economics, Oxford University Press, vol. 135(1), pages 1-55.
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    More about this item

    Keywords

    trade policy; labour market; wage; inequality; Egypt;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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