Is there an informal employment wage penalty in Egypt? Evidence from quantile regression on panel data

Date

2020-06-01

Author

Tansel, Aysıt
Ozdemir, Zeynel Abidin

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

307
views

0
downloads

This is the first study that uses panel data to assess the magnitude of the informal sector wage gap in Egypt. We consider the private sector male wage earners in Egypt and examine their wage distribution during 1998-2012 using the Egyptian Labor Market Panel Survey. We estimate Mincer wage equations both at the mean and at different quantiles of the wage distribution taking into account observable and unobservable characteristics with a fixed effect model. We also consider the possibility of nonlinearity in covariate effects and estimate a variant of matching models. 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 unlike many previous studies, there are very few differences across the conditional wage distribution. We also examine the informal wage penalty over time and in different subgroups according to age and education. The informal wage penalty has increased recently over time and is larger for the higher educated and the young.

Subject Keywords

Formal and informal wage gap, Quantile regression, Panel data, Egypt

URI

https://hdl.handle.net/11511/31126

Journal

EMPIRICAL ECONOMICS

DOI

https://doi.org/10.1007/s00181-019-01651-2

Collections

Graduate School of Social Sciences, Article

Suggestions

OpenMETU
Core

THE FORMAL/INFORMAL EMPLOYMENT EARNINGS GAP: EVIDENCE FROM TURKEY Tansel, Aysıt (2015-07-01) In this study, we examine the formal/informal sector earnings differentials in the Turkish labor market using detailed econometric methodologies and a novel panel data set drawn from the 2006-2009 Income and Living Conditions Survey (SILC). In particular, we test if there is evidence of traditional segmented labor markets theory which postulates that informal workers are typically subject to lower remuneration than similar workers in the formal sector. Estimation of standard Mincer earnings equations at the...
Transitions across labor market states including formal/informal division in Egypt Tansel, Aysıt (2019-11-01) This study examines the worker transitions across labor market states including formal/informal division using panel data of 2006 to 2012 from Egypt. We generate a broad set of facts about labor market dynamics in Egypt. We first develop transition probabilities by gender across different labor market states including formal/informal sectors utilizing Markov transition processes. Government employment is the most persistent labor market state for both men and women and the out of labor force is the second m...
Do R& D expenditures matter for labor productivity in OECD countries? an unresolved question Erdil, Erkan; Çorakcı, Ayşegül (2013-01-01) The aim of this study is to analyze the relationship between labor productivity and R&D expenditures. We have tested this relationship using a panel of 22 OECD countries that covers the period 1991-2003. A Cobb-Douglas production function was estimated in growth form where physical capital, knowledge capital, human capital, and labor stock were included as the factors of production. The estimation results that also controlled for the effect of openness, and R&D spillovers implied a positive long-run R&D ela...
Wage Inequality and Wage Mobility in Turkey Tansel, Aysıt; Guven, Aytekin (2019-02-01) This paper investigates wage inequality and wage mobility in Turkey using the surveys on income and living conditions. Providing the first evidence on wage mobility for Turkey, our paper also differs from the existing literature by investigating wage inequality and wage mobility over various socio-economic groups. We first present an overview of wage inequality over the period 2005-2011. Next, we compute several measures of wage mobility and explore the link between wage inequality and wage mobility. Furthe...
Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analysis Tansel, Aysıt (2012-02-01) This paper investigates the male wage inequality and its evolution over the 19942002 period in Turkey by estimating Mincerian wage equations using ordinary least squares and quantile regression techniques. Male wage inequality is high in Turkey. While it declined at the lower end of the wage distribution it increased at the top end of wage distribution. Education contributed to higher wage inequality through both within and between dimensions. The within-groups inequality increased and between-groups inequa...

Citation Formats

A. Tansel and Z. A. Ozdemir, “Is there an informal employment wage penalty in Egypt? Evidence from quantile regression on panel data,” EMPIRICAL ECONOMICS, pp. 2949–2979, 2020, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/31126.