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Informality and Poverty: a Casuality Dilemma with Application to Egypt

Author

Listed:
  • Hanan Nazier
  • Racha Ramadan

    (Cairo University)

Abstract
This paper analyzed the inverse causality between informality and poverty in Egypt, in addition to the impact of different individual and socio demographic factors affecting both of them. Using the “Egypt Labor Market Panel Survey” (ELMPS) 2012, we studied the impact of individual, socio demographic, household’s and firm characteristics, in addition to regional dummies, on the likelihood of being informal wage worker as well as on the incidence of being poor for male household’s head. Our results came in line with the literature; informality and poverty are concentrated among the less educated and low skilled occupations in rural areas. Moreover, small firms, with limited access to capital market are more likely to offer informal employment. Our findings revealed that informality in Egypt might be a voluntary and supply led form of employment and not a result of being trapped into poverty.

Suggested Citation

  • Hanan Nazier & Racha Ramadan, 2014. "Informality and Poverty: a Casuality Dilemma with Application to Egypt," Working Papers 895, Economic Research Forum, revised Dec 2014.
    • Handle: RePEc:erg:wpaper:895
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    Cited by:

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    2. Rodríguez Núñez, Juan Bautista, 2021. "Causalidad Reversa entre Pobreza Monetaria e Informalidad Laboral, evidencia empírica para la República Dominicana año 2010 y 2016 [Reverse Causality between Monetary Poverty and Labor Informality,," MPRA Paper 119159, University Library of Munich, Germany.
    3. Segun Thompson Bolarinwa & Munacinga Simatele, 2023. "Informality and poverty in Africa: Which comes first?," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1581-1592, June.
    4. Carla Canelas, 2019. "Informality and poverty in Ecuador," Small Business Economics, Springer, vol. 53(4), pages 1097-1115, December.
    5. Aziz N. Berdiev & James W. Saunoris & Friedrich Schneider, 2020. "Poverty and the shadow economy: The role of governmental institutions," The World Economy, Wiley Blackwell, vol. 43(4), pages 921-947, April.

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