Exports and Labor Demand : Evidence from Egyptian Firm-Level Data
Unlike many countries, the Arab Republic of Egypt did not experience significant labor market improvements following trade liberalization. This paper investigates why increased Egyptian exports did not directly increase employment. To illustrate the relationship between firm-level exporting and employment, the paper presents a simplified general equilibrium model with two sectors: one able to export and one “reserve” sector. The paper tests the implications of this theory using firm-level data from the World Bank’s Enterprise Surveys in 2013, 2016, and 2020. The firm-level microanalysis demonstrates that although there is a positive employment response to export expansion, it does not occur at a large enough scale to be felt at the macro level. To seize the benefits of trade, Egypt requires deeper business environment reforms to incentivize large export, labor-intensive sector growth and integrate its economy into global value chains.
| Main Authors: | , , |
|---|---|
| Format: | Working Paper biblioteca |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2022-10
|
| Subjects: | LABOR MARKET, EXPORTS, TRADE, EMPLOYMENT, ECONOMETRICS, |
| Online Access: | http://documents.worldbank.org/curated/en/099517110202225975/IDU019885cc80edd20439d081a405a1e85b643b5 http://hdl.handle.net/10986/38198 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | Unlike many countries, the Arab
Republic of Egypt did not experience significant labor
market improvements following trade liberalization. This
paper investigates why increased Egyptian exports did not
directly increase employment. To illustrate the relationship
between firm-level exporting and employment, the paper
presents a simplified general equilibrium model with two
sectors: one able to export and one “reserve” sector. The
paper tests the implications of this theory using firm-level
data from the World Bank’s Enterprise Surveys in 2013, 2016,
and 2020. The firm-level microanalysis demonstrates that
although there is a positive employment response to export
expansion, it does not occur at a large enough scale to be
felt at the macro level. To seize the benefits of trade,
Egypt requires deeper business environment reforms to
incentivize large export, labor-intensive sector growth and
integrate its economy into global value chains. |
|---|