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What Happened to Real Earnings in Egypt, 2008 to 2009?

Paul Cichello, Hala Abou-Ali and Daniela Marotta

No 755, Working Papers from Economic Research Forum

Abstract: Nominal earnings in Egypt were non-responsive to the increase in inflation between February 2008 and February 2009, resulting in a 12.3 (9) percent decline in average (median) real earnings among 25 to 60 years old workers. Indeed, the decline appears to be directly related to the increase in inflation rather than to changes in the employment status or type or sector of employment. Changes in earnings differ significantly by groups: (i) those with higher initial earnings (reported and predicted) suffered the largest declines in earnings; (ii) when controlling for initial earnings, women lost considerably more than men; (iii) those who were initially in agriculture also had greater declines despite rising food prices. This evidence is consistent with the assumption of labor market segmentation, with agriculture representing the least preferred free entry sector and differential pay being offered to the same individual working in different sectors.

Pages: 46
Date: 2013-05, Revised 2013-05
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