Trade Reform, Job Quality And Wages Of The Working Poor In Egypt: Evidence From Manufacturing Panel Data

This paper examines the impact of accelerating privatization and trade liberalization initiatives on wage and job quality outcomes of the working poor in the Egyptian manufacturing sector. Determinants of wage and job quality are estimated using panel and quantile regression methods and utilizing newly available labor survey data, merged with trade variables that capture decreased protection and increased competitive pressures over the period 1998-2006. Although the results indicate that trade reform in the form of lower tariffs and increased export promotion exert a small positive influence on the incomes of the poor, this might come at the expense of higher incidence of low quality jobs. Trade-related variables in general exert a minor influence on labor rewards for the poor in comparison to private sector employment and gender, which remain the main segmenting factors in the labor market. These findings underscore the importance of social protection and gender specific safety nets during the process of privatization. As trade liberalization progresses, policies that promote higher labor standard and „decent jobs. need also to be addressed.