Trade Integration with Europe and Labor Reallocation in the Southern Mediterranean Countries: The Case of Egypt

30 Pages Posted: 25 Feb 1999

See all articles by Sebastien Dessus

Sebastien Dessus

World Bank - West Bank and Gaza Resident Mission

Akiko Suwa-Eisenmann

L'Ecole Normale Superieure ; Paris School of Economics (PSE)

Date Written: October 9, 1998

Abstract

This paper looks at the implications of the Euro-Mediterranean partnership agreement on labor and wages in Egypt, using a dynamic CGE model, which takes into account the labor market segmentation. Our results suggest that trade liberalization bears the risk of promoting the use of capital-intensive technology, thus reducing the employment content of growth. Employment policies that increase the mobility between the segments of the labor market and the wage flexibility could enhance the job creation effect induced by the trade liberalization. Employment and trade policies are also complementary in political terms, by alleviating the losses borne by the insiders following the entry of new workers into the labor market.

JEL Classification: C68, F11, F15, J3, J6

Suggested Citation

Dessus, Sebastien and Suwa-Eisenmann, Akiko, Trade Integration with Europe and Labor Reallocation in the Southern Mediterranean Countries: The Case of Egypt (October 9, 1998). Available at SSRN: https://ssrn.com/abstract=147236 or http://dx.doi.org/10.2139/ssrn.147236

Sebastien Dessus (Contact Author)

World Bank - West Bank and Gaza Resident Mission ( email )

P.O. BOX 54842
Jerusalem
Israel
+972 2 236 65 49 (Phone)
+972 2 236 65 43 (Fax)

Akiko Suwa-Eisenmann

L'Ecole Normale Superieure ( email )

48 boulevard Jourdan
75014 Paris
France
+33 1 4313 6325 (Phone)
+33 1 4313 6362 (Fax)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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