Trade Integration with Europe & Labor Reallocation in the South Mediterranean Countries: the Case of Egypt

S. Dessus and Akiko Suwa-Eisenmann

Working Papers from Economic Research Forum

Abstract: This paper looks at the implications of the Euro-Mediterranean partnership agreement on labor and wages in Egypt, using a dynamic CGE model, which takes into account the labor market segmentation. Our results suggest that trade liberalization bears the risk of promoting the use of capital-intensive technology, thus reducing the employment content of growth. Employment policies that increase the mobility between the segments of the labor market and wage flexibility could enhance the job creation effect induced by trade liberalization. Employment and trade policies are also complementary in political terms, by alleviating the losses borne by the insiders following the entry of new workers into the labor market.

Keywords: LABOUR; INTERNATIONAL TRADE; ECONOMIC INTEGRATION (search for similar items in EconPapers)
JEL-codes: F13 F10 F15 E24 (search for similar items in EconPapers)
Date: Written
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Persistent link: http://EconPapers.repec.org/RePEc:fth:ecrefo:9918

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