Identifying Activities for Greater Employment Generation in Egypt: An Input-Output Analysis
Date
2022-08
Authors
Iman, Al-Ayouty
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Abstract
Between 2006 and 2017, Egypt's average rate of unemployment was 11.2%, and
23.8% among the youth. Promoting employment-generating industries may mitigate
unemployment. The present study, therefore, identifies industries (agricultural,
extraction and mining, manufacturing, and services activities) with an employment generating potential, with special reference to the youth. The study uses input output analysis to compute employment and output multipliers for Egypt in the
year 2016‒2017. A spatial analysis is also employed to test for spatial autocorrelation
(dependence) in total employment and youth employment. Results show that the
highest manufacturing employment multipliers, ranging from 4.30 to 1.90, are: Food
products; Basic metals; Motor vehicles; Paper products; Non-metallic mineral products;
Beverages; Wearing apparel; Coke and refined petroleum products. Among primary
industries, agriculture, extraction of crude petroleum, and mining employment
multipliers are 1.45, 1.43, and 1.37, respectively. The employment multipliers of the
leading service industries range from 2.66 to 1.44: Real estate; Hotels and restaurants;
Administrative & support services; Communication; and Construction. Total and youth
employment are found to have positive spatial dependence, with evident clustering of
total and youth employment among governorates of the regions of Greater Cairo, the
Delta, and Upper Egypt. Many of the high ranking employment multiplier industries
and the feeding industries along their value chains are also located in these regions,
and in geographically close regions. With the established spatial dependence, a key
policy implication is to direct investment to where these industries are located, and
possibly to locations of the feeding industries along their value chain. Potentially,
there would be stronger inter-firm linkage across regions, and further generation of
total and youth employment.