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The asymmetric effects of twenty years of tariff reforms on Egyptian workers

Giorgia Giovannetti (), Enrico Marvasi and Arianna Vivoli ()
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Giorgia Giovannetti: Università di Firenze
Arianna Vivoli: Università di Firenze

No 20156, Working Papers LuissLab from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: After more than two decades of trade liberalization, faced with deep structural problems which were exacerbated by the 2008 financial crisis and culminated in the 2011 Spring Revolution and government change, in 2016 Egypt started to protect some sectors from foreign competition. This paper assesses how tariff reforms during the 1998-2018 period affected the Egyptian labour market by focusing on real wages and job stability (i.e. having a permanent position). The empirical analysis is carried out on worker-level data from the available four waves of Egyptian Labour Market Panel Survey (ELMPS), including the recently released 2018 wave. We find that higher tariff protection tends to deteriorate labour market conditions, both lowering real wages and decreasing the probability of finding a stable job. Furthermore, tariff changes show remarkable asymmetries. There is a negative and significant correlation between tariffs increases and real wages, while the positive impact of tariff reductions turns out to be negligible and insignificant. Our findings support the view that in Egypt protectionism hampered working conditions, contributing to inequality, while liberalizations produced minor average effects.

Keywords: trade policy; labour market; wage; inequality; Egypt (search for similar items in EconPapers)
JEL-codes: F13 F14 F16 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ara and nep-int
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