Estimating labor demand elasticities and elasticities of substitution in Egyptian manufacturing sector : a firm level static analysis

Abstract EN

This paper attempts to investigate crucial questions of labor demand related to how firms respond to changes in wages, how this responds to changes according to skill levels.

This is reached through estimating own wage elasticities of demand for labor, and elasticities of substitution among different labor inputs disaggregated according to skill level in Egypt.

Based on micro establishment level data obtained from Egypt enterprise survey 2008 conducted by the World Bank.

Though skill can be described by education level, the present study use occupation to define skills.

As such it identifies four occupations professionals, skilled production workers, unskilled production workers and non-production workers.