Migration and Mobility in the Egyptian Labor Market

The objective of this project is to build a picture of various dimensions of labor mobility in Egypt during the period of adjustment. In this research project we have proposed to study three main areas: i) the changing structure of internal migration, ii) the influence of the public sector and privatization on the transformation of the Egyptian economy; and iii) informalization of the labor market and mobility.   Summary of Findings 1. Migration and Job Location of Egyptian Workers in the 1980s and 1990s In this paper, we examine the pattern and structure of internal migration in Egypt and we also study the impact of economic reforms on the geographical job mobility of workers. Although as a result of economic transition, considerable population movements are expected, this has not been the case in Egypt. The data from the 1986 and 1996 Population Censuses and from the two surveys- 1988 LFSS and 1998 LMS- indicate that migration has dropped during transition and has become a relatively rare phenomenon in Egypt. On the other hand, geographical labor mobility has increased in the 90s suggesting that geographical re- location of jobs during the adjustment period. The most significant change in the pattern of labor mobility has been the increase in the number, the likelihood and rate, of workers becoming mobile- i.e. not having a fixed geographical location. 2. The Public Sector during Adjustment The aim of the second paper is to examine the effect of economic reforms on public sector employment in Egypt. We focus on sectoral mobility, in particular from the public to the private sector, since structural adjustment requires a shift of resources from non-competitive sectors to more competitive ones and from inefficient sectors to efficient ones. We find no evidence of public-private sectoral mobility during adjustment. However, the empirical evidence indicates that there has been an increase in the probability of withdrawal from the labor market by public sector. In other words, no significant labor reallocation among existing workers took place during adjustment, but early retirement has been the main method used to reduce public sector employment. 3. Informalization and Structural Adjustment in Egypt This paper tests for whether informality has increased during the adjustment era. We examine (i) whether economic reforms have led to higher in-mobility rates to informal employment, and (ii) whether new workers are more likely to be engaged in informal employment by the end of the adjustment decade. After controlling for various individual characteristics and more importantly for life cycle effects, the main finding is that informalization has increased in the Egyptian labor market during the 90s. The probability of being informal worker increased by 5 percentage points in the 90s. In addition, the results indicate that the predicted probability of a new entrant being informal increased mainly for females who experienced a rise of 12 percentage points in their probability of being engaged in informal employment during the 90s. Overall, the empirical evidence suggests that informalization has increased mainly due to the rise in the probability of new entrants joining informal employment.