Policy Research Reports
Work Arrangements in the Informal Sector and Gig Economy/Digital Platform Economy in Egypt
No.
SPRR 2023-4
Publisher
ERF and GIZ
Date
June, 2023
Global, regional, and local trends are constantly evolving and transforming the future of work. While there is data on irregularity, informality, and the gig economy on a global and, to some extent, regional level; the purpose of this report is to address this gap on a national level, more specifically in Egypt. Subsequently, advise policymakers, employers, and employees in making informed decisions regarding the future of work in Egypt. The research conducted in this report also takes into account both the supply and demand sides of employment. Additionally, this report provides an overview of informal work, irregular work, and the gig economy in the Egyptian labour market, as well as the challenges employers and employees face within them.
The outcome of the qualitative and quantitative research outlined in this report indicates that, firstly, on a qualitative level, due to the flexibility of hours and the possibility for higher salaries, informal workers sometimes prefer informal work to that formal work. Furthermore, there is a lack of legal awareness amongst informal workers when it comes to their ability to still participate in the state’s social insurance system. On the other hand, employers sometimes prefer informal work also due to its relatively low cost in comparison to formal work. Also, the informal economy affects women differently as some women believe that they would lose out on state-provided social insurance programs should they accept formal employment.
When comes to the gig economy, qualitative research credits the rise of the gig economy in Egypt to several reasons, among which, the technological advancements, the prevalence of digital solutions, the ease of hiring, and the development of workers’ skills, as well as the ability of workers to work for multiple companies, which allows them to increase their income. This report also highlights the limited nature of Egypt’s technological infrastructure and lack of a legal framework for gig work as some of the main challenges being faced in Egypt’s gig economy. Secondly, The Egyptian Labour Force Surveys (2009-2019) show that informal and irregular employment has been increasing over time. During 2019, employment in the informal economy reached 64% while irregular employment reached 21%. Although informal employment remains the highest among those with less than secondary education, it grows more rapidly among waged workers with secondary education, reaching more than 60% of them in 2019. Between the years 2012 and 2018. Also, tech-enabled employment has tripled, with a higher percentage among highly educated than those with secondary educated workers (22% and 7%, respectively).
The report concludes by offering a wide array of key recommendations to account for the rise in informality, irregularity, and the gig economy in Egypt. Among the recommendations is the conduction of further national research into gig work and the digital economy which will help in the creation of evidence-based policies that incorporate technological innovations in the gig economy. Additionally, the adoption of new curricula that close the gap between the education attained by workers and the skills required for the job itself will further stimulate the rise of the informal, irregular, and gig economies. The creation of specific social protection policies that can ensure worker safety and account for the change in the forms of employment, as well as the adoption of specific legislation or a regulatory framework that takes into account and protects workers in the gig economy, are other factors that account for the rise of these economies in Egypt.
This Special Policy Research Report is an output of a project between the Economic Research Forum (ERF) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on Employment Promotion. It aims to support the generation of information about the current and future demands of the Egyptian labour market and equipping relevant partners with high quality evidence which would support them in making labour market-oriented decisions. As such, the project collaborated with ERF to produce sound research findings that aimed to address several topics related to the future of work, published during the national forums on the future of work in Egypt.
Authors
Rasha Hassan
Research Consultant