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Heterogeneity in the Egyptian informal labour market: choice or obligation?

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  • Rawaa Harati

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper provides historical and empirical arguments that can explain the development of the Egyptian informal sector. After recalling the various approaches proposed in the literatures, it identifies the configuration that overrides the Egyptian labor market by allowing for the heterogeneity of informal jobs and therefore the existence of different segments within the informal sector using a mixture model. It concludes that the Egyptian informal labor market in 2006 was composed of two segments with a distinct wage equations. This may point to the existence of barriers to entry to each sector, e.g. fixed cost related to social stigma which prevent people from working in the sector which offers them the highest expected wage.

Suggested Citation

  • Rawaa Harati, 2013. "Heterogeneity in the Egyptian informal labour market: choice or obligation?," Post-Print halshs-00820783, HAL.
    • Handle: RePEc:hal:journl:halshs-00820783
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00820783
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    References listed on IDEAS

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    1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 1-37.
    2. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
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    4. Günther, Isabel & Launov, Andrey, 2012. "Informal employment in developing countries," Journal of Development Economics, Elsevier, vol. 97(1), pages 88-98.
    5. Markus Loewe, 2000. "Social Security in Egypt: An Analysis and Agenda for Policy Reform," Working Papers 2024, Economic Research Forum, revised 08 2000.
    6. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    7. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
    8. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
    9. Mahdī, ʻĀliyah., 2002. "Towards decent work in the informal sector the case of Egypt," ILO Working Papers 993661433402676, International Labour Organization.
    10. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    11. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    12. Ahamada, Ibrahim & Flachaire, Emmanuel, 2010. "Non-Parametric Econometrics," OUP Catalogue, Oxford University Press, number 9780199578009.
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    Citations

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    Cited by:

    1. Floridi, A. & Wagner, N. & Cameron, J., 2016. "A study of Egyptian and Palestine trans-formal firms – A neglected category operating in the borderland between formality and informality," ISS Working Papers - General Series 619, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Hanan Nazier & Racha Ramadan, 2015. "Informality and Poverty: A Causality Dilemma with Application to Egypt," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 5(4), pages 1-4.
    3. Carla Canelas, 2015. "Poverty and informality in Ecuador," WIDER Working Paper Series wp-2015-112, World Institute for Development Economic Research (UNU-WIDER).
    4. Carla Canelas, 2019. "Informality and poverty in Ecuador," Small Business Economics, Springer, vol. 53(4), pages 1097-1115, December.
    5. Edward Sennoga & Lacina Balma, 2022. "Fiscal sustainability in Africa: Accelerating the post‐COVID‐19 recovery through improved public finances," African Development Review, African Development Bank, vol. 34(S1), pages 8-33, July.
    6. Mónica Jiménez, 2017. "La calidad del empleo y sus consecuencias para el mercado de trabajo de las medianas y grandes empresas y del sector público de argentina," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 40(79), pages 133-180.
    7. Carla Canelas, 2015. "Poverty and informality in Ecuador," WIDER Working Paper Series 112, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Informal market; development economics; finite mixture model; Egypt; segmentation; selection bias; Economie informelle; développement; modèle de mélange; Egypte; biais de sélection;
    All these keywords.

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