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Citation Information

Type Working Paper - Economic Research Forum Working Paper
Title Informality and poverty: a causality dilemma with application to Egypt
Author(s)
Issue 895
Publication (Day/Month/Year) 2014
URL http://www.researchgate.net/profile/Racha_Ramadan/publication/271013756_INFORMALITY_AND_POVERTY_A_CA​USALITY_DILEMMA_WITH_APPLICATION_TO_EGYPT/links/54bbbcd00cf253b50e2d1154.pdf
Abstract
This paper analyzed the inverse causality between informality and poverty in Egypt, in
addition to the impact of different individual and socio demographic factors affecting both of
them. Using the “Egypt Labor Market Panel Survey” (ELMPS) 2012, we studied the impact
of individual, socio demographic, household’s and firm characteristics, in addition to regional
dummies, on the likelihood of being informal wage worker as well as on the incidence of
being poor for male household’s head. Our results came in line with the literature; informality
and poverty are concentrated among the less educated and low skilled occupations in rural
areas. Moreover, small firms, with limited access to capital market are more likely to offer
informal employment. Our findings revealed that informality in Egypt might be a voluntary
and supply led form of employment and not a result of being trapped into poverty.

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