A permanent committee to oversee the implementation of Egypt’s National Employment Strategy is soon to be established as a result of a directive by President Abdel-Fattah Al-Sisi made during his Labour Day speech on 3 May delivered at the Suez Steel Company in Suez.
The strategy, currently being developed by the Ministry of Labour in cooperation with the International Labour Organisation (ILO), will outline market needs to create jobs and reduce unemployment. According to economist Ragui Assaad, part of the team developing the strategy, a diagnostic report could be ready in a couple of months covering everything related to the labour market, including how legislation influences job creation.
Assaad is professor and Freeman Chair for international economic policy at the Humphrey School of Public Affairs at the University of Minnesota in the US and an expert on labour markets and human development in the Arab world, with a focus on youth and gender issues.
Egypt’s annual unemployment rate registered 6.6 per cent in 2024, marking a 0.4 per cent decline from 2023, the Central Agency for Public Mobilisation and Statistics (CAPMAS) announced in late April. Egypt’s total labour force reached around 32 million individuals in 2024, around a 2.9 per cent increase from around 31 million in 2023.
Last year’s unemployment rate is a marked improvement from a high of 13.2 per cent in 2013.
While the figure is promising, it must be viewed within the larger picture, Assaad told Al-Ahram Weekly. Unemployment has been falling in Egypt since 2014-15, he said, pointing out that it started falling at a time when employment was also falling. CAPMAS data shows the employment rate dropped from 44.5 per cent in 2013 to 40.4 per cent in 2023.
“People think of unemployment as being the other side of the coin of employment, but it is not,” said Assaad, explaining that if somebody who is unemployed stops looking for work and leaves the labour force altogether, they are not counted as unemployed, and the unemployment rate can go down.
During the Covid-19 pandemic, for example, the unemployment rate for women went down, because a lot of women stopped looking for work.
Women’s labour force participation rates in Egypt, already low at 23 per cent in 2012, were found to have fallen further in 2023 to 18 per cent, according to studies carried out using data from the 2023 Egypt Labour Market Panel Survey (ELMPS).
The ELMPS is the fifth longitudinal survey carried out by the Economic Research Forum (ERF), a regional economic think tank, since 1998 in cooperation with CAPMAS.
The women’s labour force participation rate has primarily declined because of the decline in educated women’s participation rates, Assaad, who is also lead economist of the ELMPS, said. For several years, the participation rate of educated women in the labour market has been declining because there are fewer government jobs, he said. Private-sector jobs, especially if the women are married, may not meet acceptable working conditions for these women, he added.
Demographics is another reason for the lower unemployment rate, he said. Unemployment is a phenomenon that affects young people, and the youth population has been growing relatively slowly in the last few years, he explained.
The “youth bulge” generation is now in their early forties, for example. Now Egypt is in the trough between the youth bulge and what is called the “echo” — in other words, the sons and daughters of the youth bulge.
The unemployment rate will go up again when the echo generation enter the labour market, Assaad said. Over the next 10 years, Egypt will see an increase in labour market entrants with the peak occurring at around 2033, he added.
According to Assaad, as recently as 2010, the employment rate was 45 per cent, three per cent higher than today. He suggested trying to recover that loss by 2030. In Egypt, the employment rate is very low by international standards because the female employment rate is among the lowest in the world, he explained.
In most countries, the employment rate is in the 60 to 70 per cent range, but in many Middle East and North Africa (MENA) countries, because women’s participation is low, that range may never be reached, he said.
It is also not just that fewer women are working, but the job quality for women is going down, Assaad added. For years, women were much more dependent on the public sector than men, especially educated women, and the public sector has been reducing employment for a long time. Even women who were working in the private sector up to the age of marriage are today foregoing it, he added.
WOMEN’S PARTICIPATION: “The private sector needs to become more hospitable to women,” Assaad said, explaining what needs to be done to increase women’s labour-market participation.
Currently, the private sector requires a 48-hour work week, six days a week, eight hours a day, Assaad said, explaining that for married women this is almost impossible to accommodate because they have a high burden of unpaid care work at home.
Employers don’t want to compromise, he believes, because a lot of their costs for labour are fixed rather than being a variable hourly cost. Employers see the cost of labour as a fixed monthly cost and they try to get as many hours as possible for that amount, which discourages part-time work, he explained.
Trying to improve women’s participation rate through a quota system for women would be disastrous, he said. Instead, there should be incentives for hiring women.
One of the steps that can help is the fact that for the first time this January the minimum wage regulations allow for an hourly minimum wage in the case of part-time workers. While this is still not enough, it will help, he said.
Another positive trend in the labour market in recent years has been a slight increase in the proportion of formal work in the private sector, though overall 66 per cent of employment is informal. However, Assaad said that the improvement in formal work has been mostly for men. He attributed this to the types of jobs that have become available.
He said that until 2018, employment growth was concentrated in construction, real estate, and infrastructure, jobs that are outside of fixed establishments, that are irregular, and almost all of which are informal.
However, since then there has been a slight reversal, according to ELMPS data. Construction has slowed down, and accordingly this category of employment has been declining. Small and medium enterprises that employ between 10 and 99 workers have been growing. Moreover, there has been an acceleration of employment by such enterprises, which is an excellent trend, he said.
“They are creating good quality jobs,” he stressed.
He said the new legislation is helping. For example, Law 152/2020, the micro, medium and small enterprises development law, gives incentives to establishments to formalise, grants them temporary licences, simplifies tax treatment, and allows for financing and technical services.
Moreover, it has special provisions for startups. In addition, there is an interministerial committee to improve the environment for startups. Egypt has a very active startup scene, but as soon as they succeed and grow out of being startups, they mostly leave to go to the Gulf where they may find a more friendly business environment, Assaad noted.
Among the laws that could help boost the growth of small and medium enterprises is the new taxation Law 6/2025, which provides such enterprises with substantial tax incentives and simplifies their tax obligations.
They have been growing in services sectors such as tourism and health and professional services like information technology and finance. Companies in the manufacturing sector are also growing faster than they used to, he added.
Another area which has been growing is women’s self-employment, Assaad said. The biggest growth sector for self-employment for women is education, including private lessons, often done remotely.
“Because the education system is so deficient, the need for private lessons has gone up,” he said.
Education is an area where Assaad recommends that the government end its freeze on hiring. He said the average age of a technical education teacher is 54, which means that they have not been hiring new teachers. However, given the need, he said there is now an initiative to hire more teachers. In January, Prime Minister Mustafa Madbouli announced a public competition to hire around 70,000 teachers.
One of the tools that could help improve employment opportunities, according to Assaad, is the Egypt Occupational Outlook Platform. This is a labour market information tool hosted on the official website of the Ministry of Planning, Economic Development, and International Cooperation. It provides data on over 400 occupations, covering about 99 per cent of total employment in Egypt.
The information provided by the platform would be of use to jobseekers, career counsellors, training and educational curricula developers, policymakers, and researchers.
It provides a good starting point for those preparing for a certain career path or searching for new opportunities that match their skills.
It also provides estimates of the top five skills, abilities, and knowledge areas (competences) expected to be in demand for each occupation and the projected number of additional jobs in each occupation by 2030.
* A version of this article appears in print in the 8 May, 2025 edition of Al-Ahram Weekly
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