Rethinking the Redistribution Effects of Trade Liberalization in Egypt : A Microsimulation Analysis

This paper aims at evaluating the liberalization policies effects on inequality in Egyptwith respect to gender, region and qualification level. No previous studies in Egypt,to our best knowledge, have used the Microsimulation analysis which is a good toolthat allows such an evaluation and determines the redistribution aspects of macropolicies. The latter consists of linking macroeconomic changes to the micro level ofthe economy i.e. the individual level. A Computable General Equilibrium model(CGE) is first estimated for a maximum tariff rate of 10%. And, wages andemployment changes resulted from the CGE are replicated, in a second stage, intoour micro data. Results show that liberalization policies have important impacts oninequalities among the Egyptian population in general. Inequality has decreasedamong males and females as well as among different regions of the Egyptian societybut has increased among high-skilled and low-skilled workers. Results of the presentresearch have important policy implications that have to be considered.