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Revisiting the Impact of Trade Openness on Informal and Irregular Employment in Egypt

Author

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  • Mélika Ben Salem

    (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Chahir Zaki

    (Cairo University)

Abstract
This study examines the impact of trade openness on job quality, measured by the share of informal and irregular employment in total employment. By combining a microeconomic dataset (the Egyptian Labor Market Panel Survey) with macroeconomic variables (tariffs), we assess the effect of trade reforms on informal/irregular workers in Egypt. Our main findings show that there is a positive association between tariffs and both informal and irregular employments in Egypt. This effect is likely because the least productive informal firms will be forced to exit the industry and only the most productive (formal) firms will export to the international markets. This will increase the demand for formal (and eventually regular) workers that are usually more skilled and, in turn, lead to a likely decline in informal (and irregular) employment. While this effect on informality is robust, the one on irregularity is not.

Suggested Citation

  • Mélika Ben Salem & Chahir Zaki, 2019. "Revisiting the Impact of Trade Openness on Informal and Irregular Employment in Egypt," PSE-Ecole d'économie de Paris (Postprint) halshs-02297694, HAL.
    • Handle: RePEc:hal:pseptp:halshs-02297694
    DOI: 10.11130/jei.2019.34.3.465
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    References listed on IDEAS

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    Cited by:

    1. Giorgia Giovannetti & Enrico Marvasi & Arianna Vivoli, 2021. "The asymmetric effects of 20 years of tariff reforms on Egyptian workers," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(1), pages 89-130, April.
    2. Kazi Mohammed Kamal Uddin & Munem Ahmad Chowdhury, 2020. "Impact of FDI on Employment Level in Bangladesh: A VECM Approach," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 8(1), pages 30-37.
    3. 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.
    4. HAYAKAWA,Kazunobu & KEOLA, Souknilanh & SUDSAWASD, Sasatra & YAMANOUCHI, Kenta, 2024. "International Bridges and Informality," IDE Discussion Papers 914, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General

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