The Effects of Structural Adjustment on Youth Unemployment in Egypt

The persistence of high unemployment rates in recent years has become a major problem in many MENA countries, especially in Egypt. The aim of this paper is to examine the effects of economic reforms in Egypt on youth unemployment. The paper investigates the extent to which reforms in the early 1990s have led to higher unemployment among the youth in Egypt. The paper presents new evidence on the incidence of youth unemployment before and after the structural adjustment period, in 1988 and 1998. In addition, it examines the determinants of unemployment duration and the probability of exiting unemployment by estimating hazard functions for exits to public sector and private sector employment. The main findings of the paper show that the incidence of youth unemployment has increased during the 1990s. In addition, the empirical evidence suggests that youth unemployment is the result of not only queuing for public sector jobs, but also and more importantly the limited role played by the private sector in job creation and labor absorption.