The Impact of Uncertainty on The Labour Market in Egypt

The current economic overview has become extremely uncertain. Uncertainty about how individuals and firms react to the future evolution of the economy is considered one of the most critical phenomena facing policymakers in developed and developing countries. It appears after significant shocks such as revolutions, natural disasters, terror attacks, elections, and economic crises. Since the financial crisis of 2008, the Egyptian economy has faced many unanticipated adverse shocks due to political, security, and economic instability on the one hand and the government's decisions to re-stabilize the economy on the other hand. These incidents have forced households and companies to become more "uncertain" about the current and future economic conditions. Moreover, the current high uncertainty about the financial and health situation due to the COVID-19 pandemic encourages researchers to investigate its implications on the global economy and the Labour market. It has been argued that the implications of uncertainty shocks seem to be stronger in developing than the developed countries. The main objective of this doctoral thesis is to investigate the impact of uncertainty shocks, measured by the volatility of the Egyptian stock market index, EGX30, on the labour market in Egypt. The author employed quarterly time series data from 2003Q4 to 2021Q2. The vector autoregressive model (VAR), the impulse function (IRF) tool, and the Granger causality test have been used to capture the effect of uncertainty shocks on the weekly average wage, labour productivity, and unemployment rate. The results showed that uncertainty shocks, measured by the stock market index, EGX30, cause a sharp drop in employment, GDP, and labour productivity growth in the short-run. At the same time, it increases weakly average wages, consumer price index, and interest rate. It happens because uncertainty forces firms to pause or postpone their hiring and investment decisions, decreasing labour productivity by mismatching skills to jobs. Thus, uncertainty shocks generate temporary sharp recessions and then recoveries. Nevertheless, since the confidence intervals contain zero, the results of impulse response functions are statistically insignificant.

ISBN:	978-80-7678-087-3
EAN:	9788076780873
Počet stran	45 stran
Datum vydání	08. 09. 2022
Pořadí vydání	První
Jazyk	anglický
Vazba	e-kniha - pdf
Autor:	Emad Attia Mohamed Omran
Nakladatelství	Univerzita Tomáše Bati ve Zlíně
Tématická skupina	999 - nezařazeno
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