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Informality in Egypt: a Stepping Stone or a Dead End?

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  • Jackline Wahba

    (University of Southampton, UK)

Abstract

In the last few decades, the informal sector has played a major role in many of the LDC’s labor markets. Yet, little is known about the dynamics of this sector. This paper addresses an important question, namely whether informal employment is a stepping stone, as first argued by economists such as Fields (1975), or is it a dead end? Using evidence from the Egyptian Labor Market Panel Survey 2006, and controlling for selectivity in informal jobs, we estimate the probability of “graduating” from informal employment to semi-formal and formal jobs. The empirical findings suggest that the mobility from informal to semi-formal/formal employment is highly segmented along education and gender in Egypt. Overall, it seems that informal employment is a stepping stone for highly educated male workers, but is a dead end for the uneducated, and for female workers.

Suggested Citation

  • Jackline Wahba, 2009. "Informality in Egypt: a Stepping Stone or a Dead End?," Working Papers 456, Economic Research Forum, revised Jan 2009.
    • Handle: RePEc:erg:wpaper:456
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