Assessing the impact of trade reforms on informal employment in Egypt

Abstract

This paper proposes an empirical investigation of the effect of trade liberalisation on informal employment in Egypt. The effect of trade liberalisation on the informal sector has been widely discussed at both empirical and public policy levels but was never tested empirically in Egypt. Thus, combining a microeconomic data set (the Egyptian Labor Market Panel Survey) with macroeconomic variables (tariffs), we try to assess to what extent trade reforms affected informal workers in Egypt. Our main findings show that trade liberalisation has reduced informal employment in Egypt. Such results remain unchanged under different robust testings.