Working Papers

Labor Market Flexibility in Egypt: With Application to the Textiles and Apparel Industry

Publication Number: ECESWP170-E

June, 2012

Author : Maye Ehab

Type : Working Papers

This paper addresses the effect of labor laws and regulations in Egypt on wage, functional and numerical flexibility in the labor market with a focus on the the textile and apparrel industry. Drawing on the results of a survey conducted specifially for this research, the paper points out that labor market rigidities affect firms differently according to size where small firms are the most affected, and also according to ownership where private firms are more negatively affected than public firms. In addition, the paper finds that the impact of these rigidities on employment differ according to gender. Finally, the study stresses the importance of striking a balance between the rights of workers and requirements for labor market flexibility. It also calls for organizing awareness campaigns about the laws and regulations to ensure firms do not create their own rigidities due to ignorance of the law.