ON THE EFFECTS OF REDUCING THE GOVERNMENT`S ROLE IN THE LABOUR MARKET: A STYLIZED MODEL FOR EGYPT WITH SOME NUMERICAL POLICY EXAMPLES

Ole Risager and Chang-Po Yang
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Ole Risager: Department of Economics, Copenhagen Business School, Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark
Chang-Po Yang: The World Bank, Postal: The World Bank, World Trade Center, 1191 Corniche El Nil, 15th floor, Cairo 11221

No 03-1999, Working Papers from Copenhagen Business School, Department of Economics

Abstract: This paper analyzes the consequences of pursuing a less activist Government

employment stabilization policy strategy in Egypt. On the basis of a fairly stylized model we

find that a reduction of the Government’s involvement in the economy along with an

introduction of mild but binding firing regulations in the private sector may lead to a rise in total

employment and to an improvement in Egypt’s trade balance vis-à-vis the rest of the world.

Keywords: Uncertain environment; Job security; Countercyclical government intervention with lifetime employment guarantees; Wages; Employment; Labour market; Egypt (search for similar items in EconPapers)
JEL-codes: J40 (search for similar items in EconPapers)
Pages: 20 pages
Date: 1999-02-01
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