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Labor Markets and School-to-Work Transition in Egypt: Diagnostics, Constraints, and Policy Framework

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  • Angel-Urdinola, Diego F.
  • Semlali, Amina

Abstract

Analysis in this policy note indicates a rapid deterioration in employment opportunities for young individuals transitioning from school to work in Egypt. Despite substantial improvements in labor market outcomes in recent years (in raising employment and participation and in lowering unemployment), unemployment rates in Egypt remain exceedingly high among youth entering the labor market for the first time. A slow school-to-work transition remains the main reason behind high unemployment rates. Young entrants to the labor market have become more educated than ever before: the share of the working-age-population with university education in Egypt has increased significantly between the years 1998 and 2006 (from 14% to 19% among men and from 9% to 14% among women). However, youth are unable to capitalize the time and resources invested in their education as the labor market is not providing enough good-quality jobs for them. To cope with scarce formal jobs, young-educated workers are opting to work in the informal sector and/or withdraw from the labor force, which is contributing to a deadweight loss of recent investments in education. There are three key factors that seem to explain why school-to-job transition remains low in Egypt: investments in the private sector remain low and capital intensive, new graduates are not equipped with the skills demanded by the private sector, and the public sector still provides incentives for educated individuals (mainly women) to queue for private sector jobs. There are several policy options used in the international context to further enhance the performance of the labor market; such as removing obstacles in regulation, enhancing employability of new entrants, reforming the civil service, and designing targeted programs aiming to boost labor demand.

Suggested Citation

  • Angel-Urdinola, Diego F. & Semlali, Amina, 2010. "Labor Markets and School-to-Work Transition in Egypt: Diagnostics, Constraints, and Policy Framework," MPRA Paper 27674, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:27674
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    References listed on IDEAS

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    1. World Bank, 2009. "From Privilege to Competition : Unlocking Private-Led Growth in the Middle East and North Africa," World Bank Publications, The World Bank, number 13524.
    2. Emanuela Galasso & Martin Ravallion & Agustin Salvia, 2004. "Assisting the Transition from Workfare to Work: A Randomized Experiment," ILR Review, Cornell University, ILR School, vol. 58(1), pages 128-142, October.
    3. repec:wbk:wbpubs:13523 is not listed on IDEAS
    4. Betcherman, Gordon & Daysal, N. Meltem & Pagés, Carmen, 2010. "Do employment subsidies work? Evidence from regionally targeted subsidies in Turkey," Labour Economics, Elsevier, vol. 17(4), pages 710-722, August.
    5. Betcherman, Gordon & Godfrey, Martin & Puerto, Susana & Rother, Friederike & Stavreska, Antoneta, 2007. "A review of interventions to support young workers : findings of the youth employment inventory," Social Protection and Labor Policy and Technical Notes 41412, The World Bank.
    6. Angel-Urdinola, Diego F. & Kuddo, Arvo, 2010. "Key characteristics of employment regulation in the Middle East and North Africa," Social Protection and Labor Policy and Technical Notes 55674, The World Bank.
    7. Betcherman, Gordon & Olivas, Karina & Dar, Amit, 2004. "Impacts of active labor market programs : new evidence from evaluations with particular attention to developing and transition countries," Social Protection and Labor Policy and Technical Notes 29142, The World Bank.
    8. Almeida, Rita & Carneiro, Pedro, 2006. "Enforcement of Regulation, Informal Labour, Firm Size and Firm Performance," CEPR Discussion Papers 5976, C.E.P.R. Discussion Papers.
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    Citations

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    Cited by:

    1. Irene Selwaness & Rania Roushdy, 2017. "The Arab Spring and the Employability of Youth: Early Evidence From Egypt," Working Papers 1097, Economic Research Forum, revised 05 2017.
    2. AfDB AfDB, 2016. "North Africa - Working paper - Addressing informality in Egypt," Working Paper Series 2327, African Development Bank.
    3. Angel-Urdinola, Diego F. & Kuddo, Arvo, 2010. "Key characteristics of employment regulation in the Middle East and North Africa," Social Protection and Labor Policy and Technical Notes 55674, The World Bank.
    4. Angel-Urdinola, Diego F. & Semlali, Amina & Brodmann, Stefanie, 2010. "Non-public provision of active labor market programs in Arab- Mediterranean countries : an inventory of youth programs," Social Protection and Labor Policy and Technical Notes 55673, The World Bank.
    5. Diego Angel-Urdinola & Rene Leon-Solano, 2013. "A reform agenda for improving the delivery of ALMPs in the MENA region," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-25, December.
    6. Bargawi Hannah, 2014. "Economic Policies, Structural Change and the Roots of the “Arab Spring” in Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 10(3), pages 1-28, December.
    7. Rita Almeida & Jere Behrman & David Robalino, 2012. "The Right Skills for the Job? Rethinking Training Policies for Workers," World Bank Publications, The World Bank, number 13075.
    8. Zara Liaqat & Jeffrey Nugent, 2015. "Under-provision of private training by MENA firms: what to Do about It?," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-29, December.
    9. Assaad, Ragui & Krafft, Caroline, 2017. "Excluded Generation: The Growing Challenges of Labor Market Insertion for Egyptian Youth," IZA Discussion Papers 10970, Institute for the Study of Labor (IZA).
    10. Amina Semlali & Diego F. Angel-Urdinola, 2012. "Public Employment Services and Publicly Provided ALMPs in Egypt," World Bank Other Operational Studies 12993, The World Bank.
    11. Roberta Gatti & Diego F. Angel-Urdinola & Joana Silva & Andras Bodor, 2014. "Striving for Better Jobs : The Challenge of Informality in the Middle East and North Africa," World Bank Publications, The World Bank, number 19905.
    12. Ragui Assaad & Caroline Krafft, 2013. "The Egypt labor market panel survey: introducing the 2012 round," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-30, December.

    More about this item

    Keywords

    Labor markets; Egypt; unemployment; training; labor regulation; school-to-job transition;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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