ON THE EFFECTS OF REDUCING THE GOVERNMENT`S ROLE IN THE LABOUR MARKET: A STYLIZED MODEL FOR EGYPT WITH SOME NUMERICAL POLICY EXAMPLES

This paper analyzes the consequences of pursuing a less activist Government <p> employment stabilization policy strategy in Egypt. On the basis of a fairly stylized model we <p> find that a reduction of the Government’s involvement in the economy along with an <p> introduction of mild but binding firing regulations in the private sector may lead to a rise in total <p> employment and to an improvement in Egypt’s trade balance vis-à-vis the rest of the world.