Abstract/Summary

This thesis addresses two major outcomes of work in the Egyptian labour market, namely wages and job satisfaction. We examine the labour’s selection into the formal sector and the differences between wage determination in the formal and informal sectors of employment. Additionally, we assess the impact of labour productivity on wages, and we inspect the determinants of job satisfaction, focusing on the contribution of higher wages. We utilise data from the 2012 round of the Egypt Labour Market Panel Survey (ELMPS) to examine these issues in Egypt’s private sector and address two methodological issues, sample selection and endogeneity biases. In addressing the differences between the formal and informal sectors, we find that sector selection is only significant for formal sector wages. Also, we find significant differences between the impact of the wage determinants in each sector in terms of returns to education, gender differentials, and occupational differentials, among others, whether for the complete sample of labour or the male labour sample separately. Once refocusing the analysis on the contribution of productivity to wages, which we proxy for using a health measure since individual labour productivity is unobservable, we find that selection into participation in the labour force is only significant for the male labour sample. Conversely, we find that health has a significant and positive impact on wage levels of the complete and the male labour samples, which is particularly evident after correcting for the endogeneity of health. Finally, we find that higher wages contribute significantly and positively to alleviating levels of all types of job satisfaction for the complete and male labour samples. Furthermore, the impact of higher wages on satisfaction levels is of a bigger magnitude for the male labour sample compared to the complete labour sample. In summary, this research contributes to the Egyptian and developing countries’ literature on labour market outcomes. We used relatively new data that is nationally representative and enables us to study a range of topics, and we addressed the methodological issues of sample selection and endogeneity to obtain unbiased and consistent results.