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Is There an Informal Employment Wage Penalty in Egypt?

Aysit Tansel, Halil Ibrahim Keskin and Zeynel Abidin Ozdemir

Abstract:
This paper considers the private sector wage earners in Egypt and examine their wage distribution during 1998-2012 using Egyptian Labor Market Panel Survey. We first estimate Mincer wage equations both at the mean and at different quantiles of the wage distribution taking into account observable characteristics. Then we make use of the panel feature of the data and estimate models taking into account unobservable characteristics. We also consider the possibility of nonlinearity in covariate effects and estimate a variant of matching models. In all cases we find a persistent informal wage penalty in the face of extensive sensitivity checks. It is smaller when unobserved heterogeneity is taken into account and larger at the top than at the bottom of the conditional wage distribution. We also examine the informal wage penalty over time during the study period and in different groups according to experience and education. The informal wage penalty has increased recently over time and is larger for the better educated but smaller for the more experienced. 

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2015

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  • 15/09 The impacts of the 2008 global financial crisis on developing countries: the case of the 15 most affected countries
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  • 15/08 Is There an Informal Employment Wage Penalty in Egypt?
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  • 15/05 Southwest as the New Internal Migration Destination in Turkey
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  • 15/04 2002 Sonrası Türkiye Ekonomisinin Performansı: Karşılaştırmalı Bir Analiz
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  • 15/03 Inequality of Opportunities of Educational Achievement in Turkey over Time
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  • 15/02 Unemployment and Labor Force Participation in Turkey
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  • 15/01 Determinants of Transitions across Formal/Informal Sectors in Egypt
    Aysit Tansel and Zeynel Abidin Ozdemir
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