The effect of COVID-19 on the gender employment gap in Egyptian manufacturing<sup>*****</sup> Amirah El-Haddad<sup>*</sup> and Phoebe W. Ishak<sup>†</sup>

# **1. Introduction**

The gender gap in Egypt has changed over time in response to changes in policy, itself driven by changes in the underlying development model of the country. The state-led inward looking development model in Egypt from the 50s to nearly the 80s meant that female employment was disproportionately greater in the government sector, that is in Egyptian bureaucracy and in state owned enterprises (SOE) including in manufacturing. With the gradual liberalization in the 70s and the adoption of the Economic Reform and Structural Adjustment Program (ERSAP) in 1991, the situation has changed. The public sector employment guarantee scheme was suspended and the ERSAP entailed large scale privatization of SOE. Privatization in turn fueled private sector growth especially in textiles and clothing (TC), which has caused this sector to increasingly attract female workers. In fact, the entire increase in private sector employment between 1998 and 2006 was on account of the feminization of just two sectors, these are food processing and TC (Assaad and El-Hamidi 2009).

During the first half of the 2000s the economy was further liberalized. Additionally, competition from countries such as China, India, Bangladesh, Pakistan, Indonesia, and even Turkey had become fierce with the phase-out of the Multi-fibre Agreement (MFA) in 2005. Liberalization had been largely ‘hybrid’ implying that the transition to a market economy was not preceded by the necessary regulatory framework (El-Haddad 2023). These developments have increasingly transformed Egypt into a rentier economy (El-Haddad 2015) and increasingly informal. Similar to the formal sector, the informal sector became largely male dominated or ‘de-feminized’ (Assaad 2002). Accordingly, the informal sector has further entrenched the gender employment gap in the country. Whilst policies induced these substantial shifts in the gender gap, the role of social norms and gendered socioeconomic roles is as important.

Apart from these long term trends, the gender gap could also suddenly change. An economic crisis can potentially be a driver of change and so can either decrease or exacerbate the gap. Through imposed lockdown measures to limit the spread of the virus, the breakout of COVID-19 has simultaneously induced a demand and a supply side shock with potential job losses following a demand-pushed recession and a supply-side contraction.

This paper is positioned within the recent literature investigating the effect of the pandemic on the gender gap, but is also more broadly situated within the historical evolution of

> * We are thankful for the generous financial support provided by the project ‘Stability and Development in the Middle East and North Africa’, funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) towards the administration of the 2020/21 Egyptian Industrial Firm Behavior Survey (EIFBS) instrument. The contents of this document are the sole responsibility of the authors and do not reflect the position of the BMZ. We are grateful to Dr. Zakaria Othman for undertaking the sampling. Thanks are also due to Marian Adel for research assistance. The dataset can be downloaded here: Egypt, Arab Rep. - Egyptian Industrial <u>Firm Behavior Survey, EIFBS 2020/21 (erfdataportal.com)</u>

> * Senior Economist, German Institute of Development and Sustainability (IDOS) formerly German Development Institute (DIE), Tulpenfeld 6 D-53113 Bonn, +49(0)228 94927-253, Amirah.El-Haddad@idos-research.de Professor of Economics, Faculty of Economics and Political Sciences, Cairo University Amirah.elhaddad@feps.edu.eg; Fellow ERF Web:  https://www.die-gdi.de/en/amirah-el-haddad/ † Postdoctoral researcher, Aix-Marseille Université, CNRS, Marseille, France, research affiliate at IZA Bonn and the Economic Research Forum (ERF), Email: phoebe.ishak@univ-amu.fr

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