Economic Analysis of Supply Functions, Private Returns to Investment in Education and Skill Mismatch in Egypt

Marwa Biltagy

Education is one of the most important types of investment in human capital that is beneficial. Private returns to education include financial option returns, non-financial options and non-market returns. On the other hand, the social returns to education include economic growth and non-market social effects. Education has many development goals i.e. it is considered as a tool of social empowerment and global competitiveness. Moreover, education is the most significant asset that explains income disparities among individuals. Accordingly, equity in education leads to equity in income distribution. The main objective of this paper is to estimate the demand and supply functions for schooling in Egypt using the data of the Egypt Labour Market Panel Survey 2012. It is concluded that, the number of years of schooling and the family characteristics are the main variables that affect the demand and supply functions of education in Egypt.

Do Exports and Innovation Matter for the Demand of Skilled Labor? Evidence from MENA Countries

Nora Aboushady, Chahir Zaki

The objective of the paper is to test the impact of exports and innovation on the demand of skilled labor in the MENA region using firm-level data. In this matter, our contribution is threefold. First, we examine the connection between exports and skill bias through several innovation and technology adoption indicators. Second, we differentiate between the effect of innovation on skilled blue-collar (production workers) vs. white collars workers (non-production workers). Third, we test this relationship for nine MENA countries, using firm-level data from the World Bank Enterprise Survey (2013). Our results suggest a positive and significant impact of exports on innovation and technology adoption. Furthermore, demand for skilled production workers by firms in the MENA region is likely to be higher than that for non-production workers. This demand is particularly high when a firm adopts a new logistics method, a new production method, a new product and a new organizational structure. Third, the larger the firm, the higher the demand for skilled production and non-production labor.

Job Search Intensity and the Role of Social Networks in Finding a Job in Arab Countries: A Case Study of Algeria and Jordan

Moundir Lassassi, Ibrahim Alhawarin

Using nationally representative data from Algeria and Jordan, this paper shows that social networks are crucial in labour market intermediation in Arab countries. We make use of binary and ordered probit regressions, corrected for sample selection using the Heckman model, to investigate determinants of job search intensity and determinants of the probability of finding a job through social contacts. After factoring the sample selection, our findings suggest that the use of population density as a proxy for the size and strength of social networks may only be appropriate for the studies of minorities and immigrants.  We propose that strong ties (closer friends and relatives, and maybe friends on social media) may be more crucial in job finding than weak ones (number of inhabitants in adjacent areas). On average, the analysis shows that job search is more intensive in Jordan compared to Algeria. Among others, household wealth, the local unemployment rate, region, previous labour market experience, and to some extent education, appear to exert significant roles in determining intensity. Importantly, the study finds that social networks are a popular method of finding a job in Algeria and Jordan, but not for skilled jobs. Such methods increase the probability of obtaining less secured informal jobs.  Finally, the study also shows that despite the importance of public sector agencies in the job search process, less than 5% in Algeria and 9% in Jordan of the young employed state that such agencies have helped them transit into employment.

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