Working Papers

Employment Generation in Egypt: A Spatial Approach

Publication Number: ECES WP 177-E

July, 2014

Author : Omneia Helmy and Iman Al-Ayouty

Type : Working Papers

Using a spatial approach, this study analyzes the distribution of Egypt’s labour force across its twenty seven governorates, and the rate of unemployment in each governorate by age, gender, and level of education. At the national level, Egypt’s most pressing unemployment problem is among the holders of intermediate education, followed by youth, male and female unemployment, and among holders of university degrees and above. At the governorate level, the highest problems were found in: Behera, Sharkia, Gharbia, Suhag, Alexandria, Cairo, Dakahlia, Menia, Asyout, and Faiyum. The study then identifies possible sources of the problem(s), including investment patterns and energy subsidies that created a heavily capital and energy intensive industrial structure. Other sources relate to access to finance, and weak and heavily concentrated infrastructure investment favoring Greater Cairo and Alexandria. The study found evidence of misalignment between output of technical and vocational education and governorates’ leading activities.

Based on these findings, the study puts forth two sets of possible solutions. The first is cross-cutting, including facilitating access to finance especially for SMEs, phasing out energy subsidies, ensuring synergy between technical and vocational education and the governorates’ leading activities, and raising infrastructure investments, particularly in infrastructure deficient governorates. The second set is governorate-specific and involves nominating manufacturing industries for potential investment as well as building on the mining/quarrying endowments of governorates. The governorate-specific solutions will be more effective if coupled with fiscal and administrative decentralization.