Unemployment and Youth Insertion in the Labor Market in Egypt

Abstract:
Using data from the recently released Egypt Labor Market Panel Survey (ELMPS) of 2006, the study shows that there has been a decline in both the relative and absolute size of unemployment in Egypt in the period from 1998 to 2006. This study presents detailed evidence in support of this assertion, including the process of labor market entry for youth. Three explanations are provided for the decline in unemployment: (i) the slow-down in the growth of the working age population and the shift of the age structure of the youth population away from the 15-19 age group, which had the highest unemployment rates in 1998; (ii) the slowdown in government hiring, which reduced the incentive of female graduates to remain unemployed while queuing for government jobs and withdraw instead from the labor force; (iii) the acceleration of employment growth in the private sector, leading to earlier transitions into employment, at least for young male new entrants.