Revisiting the Impact of Trade Openness on Informal and Irregular Employment in Egypt

Abstract

This paper examines the impact of trade openness on job quality through the evolution of the shares of informal and irregular employment in total employment. In fact, Egypt has undertaken several liberalization waves and reforms of the labor market (1998-2012). Moreover, the economy has been subject to several events leading to a severe political instability which in turn affected production, exports, employment and employment conditions. Indeed, informal and irregular employments have exacerbated in the wake of the political turmoil of 2011. Thus, combining a microeconomic dataset (the Egyptian Labor Market Panel Survey) with macroeconomic variables (tariffs), we try to assess to what extent trade reforms affected informal/irregular workers in Egypt. Our main findings show that there is a positive association between tariffs and both informal and irregular employments in Egypt. While the effect on informality is robust, the one on irregularity is not.