IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/61183.html
   My bibliography  Save this paper

Determinants of Transitions across Formal/Informal sectors in Egypt

Author

Listed:
  • Tansel, Aysit
  • Ozdemir, Zeynel / A.

Abstract

Informality is a salient feature of labor market in Egypt as it is the case with many developing countries. This is the first study of the determinants of worker transitions between various labor market states using panel data from Egypt. We first provide a diagnosis of dynamic worker flows across different labor market states. We develop transition probabilities by gender across different labor market states utilizing Markov transition processes. Next we identify the effects of individual, household, job characteristics and location on different mobility patterns by estimating a multinomial logit regression. The results point to the highly static nature of the Egyptian labor market. Government employment and the out of labor force are the most persistent labor market states. Further, only a few of the explanatory variables except high levels of education are found to have predictive power in explaining the transitions from formal wage, informal wage, self-employment, unemployment government employment and out of labor market states.

Suggested Citation

  • Tansel, Aysit & Ozdemir, Zeynel / A., 2014. "Determinants of Transitions across Formal/Informal sectors in Egypt," MPRA Paper 61183, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:61183
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/61183/1/MPRA_paper_61183.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gong, Xiaodong & Van Soest, Arthur & Villagomez, Elizabeth, 2004. "Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 1-36, October.
    2. Aysit Tansel & Elif Oznur Acar, 2016. "The Formal/Informal Employment Earnings Gap: Evidence from Turkey," Research on Economic Inequality, in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 121-154, Emerald Group Publishing Limited.
    3. Pagés, Carmen & Stampini, Marco, 2009. "No education, no good jobs? Evidence on the relationship between education and labor market segmentation," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 387-401, September.
    4. Krstic, Gorana & Sanfey, Peter, 2007. "Mobility, poverty and well-being among the informally employed in Bosnia and Herzegovina," Economic Systems, Elsevier, vol. 31(3), pages 311-335, September.
    5. Philippe Adair & Youghourta Bellache, 2014. "Labour mobility and the informal sector in Algeria: a cross-sectional comparison (2007-2012)," TEPP Working Paper 2014-07, TEPP.
    6. Tansel, Aysit & Kan, Elif Oznur, 2011. "Labor mobility across the formal/informal divide in Turkey: evidence from individual level data," MPRA Paper 35672, University Library of Munich, Germany.
    7. Funkhouser, Edward, 1996. "The urban informal sector in Central America: Household survey evidence," World Development, Elsevier, vol. 24(11), pages 1737-1751, November.
    8. Günther, Isabel & Launov, Andrey, 2012. "Informal employment in developing countries," Journal of Development Economics, Elsevier, vol. 97(1), pages 88-98.
    9. Roberta Gatti & Diego F. Angel-Urdinola & Joana Silva & Andras Bodor, 2011. "Striving for Better Jobs : The Challenge of Informality in the Middle East and North Africa Region," World Bank Publications - Reports 10857, The World Bank Group.
    10. Ragui Assaad & Caroline Krafft, 2013. "The Evolution of Labor Supply and Unemployment in the Egyptian Economy: 1988-2012," Working Papers 806, Economic Research Forum, revised Nov 2013.
    11. Thomas A. Mroz & Timothy H. Savage, 2006. "The Long-Term Effects of Youth Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
    12. Canavire-Bacarrezao, Gustavo Javier & Urna Soria , Luís Fernando, 2009. "Unemployment Duration and Labor Mobility in Argentina: a Socioeconomic-based pre- and post-crisis Analysis," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 12, pages 169-217, Octubre.
    13. Rana Hendy & Chahir Zaki, 2013. "On informality and productivity of micro and small enterprises: evidence from MENA countries," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 19(4), pages 438-470.
    14. Bosch, Mariano & Maloney, William F., 2010. "Comparative analysis of labor market dynamics using Markov processes: An application to informality," Labour Economics, Elsevier, vol. 17(4), pages 621-631, August.
    15. Roberta Gatti & Diego F. Angel-Urdinola & Joana Silva & Andras Bodor, 2014. "Striving for Better Jobs : The Challenge of Informality in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 19905.
    16. Bigsten, Arne & Mengistae, Taye & Shimeles, Abebe, 2007. "Mobility and earnings in Ethiopia's urban labor markets, 1994-2004," Policy Research Working Paper Series 4168, The World Bank.
    17. Slonimczyk, Fabian & Gimpelson, Vladimir, 2013. "Informality and Mobility: Evidence from Russian Panel Data," IZA Discussion Papers 7703, Institute of Labor Economics (IZA).
    18. Ragui Assaad, 2012. "The Structure and Evolution of Employment in Jordan," Working Papers 674, Economic Research Forum, revised 2012.
    19. Zaki, Chahir & Selwaness, Irène, 2012. "Assessing the Impact of Trade Reforms on Informality in Egypt," Conference papers 332191, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    20. Ragui Assaad & Caroline Krafft, 2013. "The Egypt labor market panel survey: introducing the 2012 round," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-30, December.
    21. Mongi Boughzala & Mokhtar Kouki, 2003. "Unemployment Persistence and The Informal Sector," Working Papers 0326, Economic Research Forum, revised 09 Nov 2003.
    22. Sabine Bernabè & Marco Stampini, 2009. "Labour mobility during transition Evidence from Georgia1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(2), pages 377-409, April.
    23. Simel Esim & Eileen Kuttab, 2002. "Women's Informal Employment in Palestine: Securing A Livelihood Against All Odds," Working Papers 0213, Economic Research Forum, revised 02 May 2002.
    24. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237.
    25. Ragui Assaad & Caroline Krafft, 2013. "The Structure and Evolution of Employment in Egypt: 1998-2012," Working Papers 805, Economic Research Forum, revised Nov 2013.
    26. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," The World Bank Economic Review, World Bank, vol. 13(2), pages 275-302, May.
    27. Mona Amer, 2014. "Patterns of Labor Market Insertion in Egypt, 1998-2012," Working Papers 849, Economic Research Forum, revised Oct 2014.
    28. Aysit Tansel, 2001. "Wage Earners, Self Employed and Gender in the Informal Sector in Turkey," Working Papers 0102, Economic Research Forum, revised 01 Nov 2001.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tansel, Aysit & Keskin, Halil Ibrahim & Ozdemir, Zeynel Abidin, 2008. "Public versus Private Sector Wage Gap in Egypt: Evidence from Quantile Regression on Panel Data," MPRA Paper 89540, University Library of Munich, Germany.
    2. Aysit Tansel & Halil Ibrahim Keskin & Zeynel Abidin Ozdemir, 2015. "Is There an Informal Employment Wage Penalty in Egypt?," Working Papers 976, Economic Research Forum, revised Dec 2015.
    3. Ahmed Elsayed & Jackline Wahba, 2016. "Informalization Dynamics and Gains: Why Want a Job Contract?," Working Papers 1001, Economic Research Forum, revised May 2016.
    4. Durdana Qaiser Gillani & Toseef Azid, 2017. "The informal Employment in Southern Punjab: An Empirical Evidence," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 6(3), pages 141-147, September.
    5. Roberta Gatti & Diego F. Angel-Urdinola & Joana Silva & Andras Bodor, 2014. "Striving for Better Jobs : The Challenge of Informality in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 19905.
    6. Tansel, Aysit & Keskin, Halil Ibrahim & Ozdemir, Zeynel Abidin, 2008. "Public versus Private Sector Wage Gap in Egypt: Evidence from Quantile Regression on Panel Data," MPRA Paper 89540, University Library of Munich, Germany.
    7. Shaimaa Yassin, 2016. "Constructing Labor Market Transitions Recall Weights in Retrospective Data: An Application to Egypt and Jordan," Working Papers 1061, Economic Research Forum, revised 11 Jan 2016.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tansel, Aysit & Kan, Elif Oznur, 2011. "Labor mobility across the formal/informal divide in Turkey: evidence from individual level data," MPRA Paper 35672, University Library of Munich, Germany.
    2. Aysit Tansel & Elif Öznur Acar, 2017. "Labor mobility across the formal/informal divide in Turkey: Evidence from individual-level data," Journal of Economic Studies, Emerald Group Publishing, vol. 44(4), pages 617-635, September.
    3. Aysit Tansel & Halil Ibrahim Keskin & Zeynel Abidin Ozdemir, 2015. "Is There an Informal Employment Wage Penalty in Egypt?," Working Papers 976, Economic Research Forum, revised Dec 2015.
    4. Cilasun, Seyit Mumin & Acar, Elif Oznur & Gunalp, Burak, 2015. "The Effects of Labor Market Reforms on the Labor Market Dynamics in Turkey," MPRA Paper 64767, University Library of Munich, Germany.
    5. Enrique Alaniz & Alma Espino & T.H. Gindling, 2019. "Self-employment and labour market dynamics of men and women in El Salvador and Nicaragua," WIDER Working Paper Series wp-2019-97, World Institute for Development Economic Research (UNU-WIDER).
    6. Aysit Tansel & Halil Ibrahim Keskin & Zeynel Abidin Ozdemir, 2015. "Is There An Infırmal Employment Wage Penalty in Egypt?," ERC Working Papers 1508, ERC - Economic Research Center, Middle East Technical University, revised Sep 2015.
    7. Fabián Slonimczyk & Vladimir Gimpelson, 2015. "Informality and mobility," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 299-341, April.
    8. Ahmed Elsayed & Jackline Wahba, 2019. "Political change and informality : Evidence from the Arab Spring," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 27(1), pages 31-66, January.
    9. Hatem Jemmali & Fatma El-Hamidi, 2018. "Does it Still Pay to Go to College in Egypt? Decomposition Analysis of Wage Differentials For College and Non-College Graduates," Working Papers 1224, Economic Research Forum, revised 18 Sep 2018.
    10. Bargain, Olivier & Etienne, Audrey & Melly, Blaise, 2021. "Informal pay gaps in good and bad times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 693-714.
    11. Joonmo Cho & Jaeseong Lee, 2015. "Persistence of the Gender Gap and Low Employment of Female Workers in a Stratified Labor Market: Evidence from South Korea," Sustainability, MDPI, vol. 7(9), pages 1-27, September.
    12. Slonimczyk, Fabian & Gimpelson, Vladimir, 2013. "Informality and Mobility: Evidence from Russian Panel Data," IZA Discussion Papers 7703, Institute of Labor Economics (IZA).
    13. Aysit Tansel & Elif Oznur Acar, 2016. "The Formal/Informal Employment Earnings Gap: Evidence from Turkey," Research on Economic Inequality, in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 121-154, Emerald Group Publishing Limited.
    14. Pagés, Carmen & Stampini, Marco, 2009. "No education, no good jobs? Evidence on the relationship between education and labor market segmentation," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 387-401, September.
    15. María del Pilar Casal & Bradford L. Barham, 2013. "Women’s Mobility in the Argentine Labour Market," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 59, pages 88-125, January-D.
    16. Ahmed Elsayed & Jackline Wahba, 2016. "Informalization Dynamics and Gains: Why Want a Job Contract?," Working Papers 1001, Economic Research Forum, revised May 2016.
    17. Susan Namirembe Kavuma & Oliver Morrissey & Richard Upward, 2015. "Worker Flows and the Impact of Labour Transitions on Earnings in Uganda," Discussion Papers 2015-01, University of Nottingham, CREDIT.
    18. Falco, Paolo & Maloney, William F. & Rijkers, Bob & Sarrias, Mauricio, 2015. "Heterogeneity in subjective wellbeing: An application to occupational allocation in Africa," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 137-153.
    19. Shahen, Mostafa E. & Kotani, Koji & Kakinaka, Makoto & Managi, Shunsuke, 2020. "Wage and labor mobility between public, formal private and informal private sectors in a developing country," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 101-113.
    20. H. Lehmann & T. Razzolini & A. Zaiceva, 2011. "Job Separations, Job Loss and Informality in the Russian Labor Market," Working Papers wp800, Dipartimento Scienze Economiche, Universita' di Bologna.

    More about this item

    Keywords

    Labor market dynamics; informality; Markov processes; multinomial logit; Egypt;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:61183. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.