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Do Pensions Reduce the Incentive to Work? Evidence From Egypt

Author

Listed:
  • Mohamed Arouri

    (Universiti d'Auvergne & EDHEC Business School, France)

  • Cuong Viet Nguyen

Abstract

In this study, we investigate the impact of the receipt of contributory and social pensions on labor supply in Egypt using fixed-effects regressions and panel data from the Egypt Labor Market Panel Surveys in 2006 and 2012. We find that the receipt of contributory pension reduces the probability of working of people aged 15 to 60 as well as people above 60 years old. We also find a differential impact of contributory pensions. When living in a household with pensions, males, urban people, and those with high levels of education are less likely to work than females, rural people, and ones with low levels of education. Regarding the receipt of social pensions, it has no significant effects on the probability of working. A possible reason is that social pensions are remarkably lower than contributory pensions, and the small amount of social pensions is not enough to reduce the working incentive.

Suggested Citation

  • Mohamed Arouri & Cuong Viet Nguyen, 2016. "Do Pensions Reduce the Incentive to Work? Evidence From Egypt," Working Papers 1021, Economic Research Forum, revised Jun 2016.
    • Handle: RePEc:erg:wpaper:1021
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    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation

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