Transcript Analysis of the Egyptian Labour Market with Special Focus on MDG

Analysis of the
Egyptian Labour
Market with a
Special Focus on
MDG Employment
Indicators
Dr. Magued Osman
Contents
Introduction
MDG Employment Indicators
Challenges and the Way Ahead
Introduction
 The 1990’s, the IMF supported economic and fiscal
reforms lifted Egypt’s growth profile to a 4.3% average
GDP growth rate. However, unemployment remained
high at an average 9.4% over the decade.
 Starting mid-2004, a wide-ranging programme of
economic reforms and a favorable external economic
environment have contributed to relatively high
economic growth rates in subsequent years; with an
average annual growth rate of 6.4 per cent from 20052008.
 GDP growth dropped to 4.7 per cent in 2009 following
the of the global economic crisis.
 The growth surge lead to rapid employment growth
and the decline of the unemployment rate from 11.3%
in 2005 to 8.7% in 2008.1
Introduction
 The 25 of January revolution lead to a sharp
drop in economic growth from 5.1% in 2010 to
1.8% in 2011, and remained low at 2.0% in 2012.
 As a result, the economy was not able to absorb
new entrants to the labour market, and
consequently unemployment rate continued to
increase to reach 12.7 per cent in 2012,
highlighting structural economic challenges that
need to be addressed.
MDG Employment
Indicators
Employment-to-Population Ratio
 The number of people
in employment as a
percentage of the
population for the
corresponding age
group and sex.
 The employment-to
population ratio
typically falls between
50 – 75 percent, with a
lower ratio for females
compared males in
most countries.
Unemployment Rate
 Sluggish economic performance since the January 25
Revolution and a difficult transitional period have lead
unemployment to jump from 9% in 2010 to 12.7% in 2012.
 In the last quarter of 2012, the unemployment rate hit 13%
compared to the preceding quarter where it stood at
12.5% according to CAPMAS. Which shows that 162
thousand Egyptians lost their jobs in the last 4 months of
2012.
Women and Unemployment
 Higher unemployment rates for women
compared to men.
 In 2011, unemployment for females amounted to
22.7% compared to 8.9% for males according to
CAPMAS.
 This increased to 24.2% for females in 2012,
compared to 9.3% for males.
 This gender gap is even more extreme among
youth where unemployment reached 44.6% of
female youth, compared to 18.7% for male youth
in 2011.
Youth Unemployment
 74% of total employment in Egypt in 2012 were youth
aged between 15 and 29 years.
 In 2011, almost one in four youth were unemployed.
Unemployment by
Educational Attainment
Labour Force Participation
 The labour force
participation rate
measures the proportion
of a country's workingage population that
engages actively in the
labour market; either by
working (employed) or
looking for work
(unemployed).
Youth Labour Force Participation
 The youth labour force participation rate reached 33.9 % in
Egypt compared to the regional average of 33.4% in North
Africa, and 48.5 % on the global level in 2012.
 The persistent
gender gap is
also clear in the
labour force
participation
rate for youth;
where the
female
participation
rate is almost
half the male
rate in Egypt.
Vulnerable Employment Rate
 Vulnerable employment is
calculated as the sum of
contributing family workers and
own-account workers as a
percentage of total employment
of the relevant group.
 The two groups that constitute
vulnerable employment in Egypt
are showing different patterns in
the labour market.
 Contributing family workers as a
share of all employment declined
by 0.6 percentage points
between 2000 and 2010, while
the share of own-account
workers rose by 0.8 percentage
points.
Working Poverty
 The working poverty rate is the proportion of
working poor in total employment; where
working poor are defined as employed persons
living in a household whose members are
estimated to be below the poverty line.
 The inability of employment to lift families above
the poverty line.
Working Poverty
 In Egypt, getting a job does not necessarily keep
workers above the poverty line. Before the
revolution, the minimum wage in the public
sector was estimated at $1.67 per day ($50 per
month), which is higher than the international
poverty line at $1.25 per day, yet lower than the
threshold of $2 per day.
 After the revolution, the public sector minimum
wage was raised to $3.5 per day ($107 per
month) in an attempt to lift Egyptian working
class out of poverty, however this new wage
structure turns to be inadequate against the
increasing cost of everyday necessities, and
workers are still trapped in poverty.
Labour Productivity
 Labour productivity represents the amount of output
achieved per unit of labour input. It is used to assess the
likelihood that an economic environment creates and
sustains decent employment opportunities with fair and
equitable remuneration.
 Linkages between labour productivity, vulnerable
employment and working poverty.
 Productivity increases obtained through investment,
trade, technological progress or changes in work
organization can lead to increases in social protection
and poverty reduction, and would in turn have the
potential to reduce vulnerable employment and
working poverty.
Labour Productivity
Share of Women in Wage
Employment in the Non-Agricultural
Sector
 This indicator expresses share of female workers in
wage employment in the non-agricultural sector
as a percentage of total wage employment in
this sector.
 It shows the degree to which labour markets are
open to women in industry and services sectors,
and thus reflects the ability of the economy in
creating an environment that promotes decent
and productive work for women.
Share of Women in Wage
Employment in the Non-Agricultural
Sector
 The share of women in wage employment in the
non-agricultural sector has been fluctuating during
the period 2000 - 2008.
 It increased from 16.2% in 2000 to 18.5% in 2002,
and then continued to decline the following years
with the exception of 2007.
 This indicator shows the necessity for policies and
action to increase employment opportunities for
women to encourage women empowerment and
influence poverty reduction.
Challenges and Way
Ahead
Challenges
 Unemployment and quality of employment for
women and youth.
 Lower employment opportunities for those with
higher educational attainment. Social
repercussions, disincentive for education and
economic consequences.
 Informal and vulnerable employment.
 Social and political instability.
 ILO blacklist and worker freedom standards.
Way Ahead
 New economic vision based on inclusive growth and
social justice.
 Focus not just on job creation but job quality. Try to
decrease working poverty rates, and increase
productive employment.
 Female empowerment and promoting gender equality in
employment opportunities.
 The role of the private sector and creating jobs that will
absorb and encourage the educated youth.
 Regulatory and Institutional Reforms.
 Modifying legislation to conform with international
agreements.
 Social Stability, Economic Growth.