Working Paper- Is There an Informal Employment Wage Penalty in Egypt?

Source: Economic Research Forum
Author(s): Aysit Tansel, Halil Ibrahim Keskin, Zeynel Abidin Ozdemir

Original Link:


This paper considers the private sector wage earners in Egypt and examines their wage distribution during 1998-2012 using the Egyptian Labor Market Panel Survey. We first estimate Mincer wage equations both at the mean and at different quantiles of the wage distribution taking into account observable characteristics. Then we make use of the panel feature of the data and estimate models taking into account unobservable characteristics. We also consider the possibility of nonlinearity in covariate effects and estimate a variant of matching models. In all cases we find a persistent informal wage penalty in the face of extensive sensitivity checks. It is smaller when unobserved heterogeneity is taken into account and larger at the top than at the bottom of the conditional wage distribution…

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