M.Sc. Results by:

Samaa Hazem Hosny

Cairo University2007

M.Sc. Results by:

Samaa Hazem Hosny

Cairo University2007

Modelling the Relationship between Poverty and Female

Working Status in Egypt

Modelling the Relationship between Poverty and Female

Working Status in Egypt

3

Chapter 1: Introduction and Importance of the Study

Chapter 2: Literature Review

Chapter 3: Variables

Chapter 4: Methodology and Model Specification

Chapter 5: Results

Chapter 6: Conclusions and Recommendations

Thesis Contents

5

Introduction

International Importance of Topic:

MDG 1: "To Eradicate Extreme Poverty and

Hunger"

MDG 3: "To Promote Gender Equality and

Empower Women"

6

IntroductionWorld Development Report 2007:

Percentage of Egypt’s population below the National Poverty Line: 22.9% in 1995/1996 16.7% in 1999/2000

Percentage of Egypt’s population below the International Poverty Lines: 3.1% below $1 a day in 1999/2000 43.9% below $2 a day in 1999/2000

7

Objectives

Exploring and identifying the determinants of each of the two topics and the direction of relationship with each of the two variables

Testing the endogeneity and significance of each of the two variables in the equation of the other

Defining the impact of the different criteria of poverty measurement on the simultaneous relationship between poverty and female labor force participation

8

Dataset

SPSC Survey 2002

6 governorates: Cairo, Giza, Dakahliya, Menofiya,

Menia, and Souhag

5 regions of Egypt: Urban Upper, Rural Upper, Urban

Lower, Rural Lower, and Metropolitan regions

Stratified multi-stage random sample

The analytic sample is restricted to 6072 women

aged 15 years and more

Sampling weights were calculated using the regional

distribution of the 1996 census

10

Determinants of Poverty

1 .Education

2 .Region3. Family Composition / Dependency

Ratio4 .Employment

5 .Housing6 .Health

11

1. Education

2. Poverty

3. Family Composition

Determinants of Female Labor Force

Participation

13

S E M s Structural (Behavioral) Equations: Function of: Endogenous (stochastic), Exogenous

(non-stochastic), and Residuals yt' Г + xt' B = εt'

Reduced Form Equations: Function of: Exogenous (non-stochastic), and Residuals

yt' = -xt' B Г-1 + εt' Г-1

= xt' π + v t'

14

Identification

Y1 = f1 (Y2 , X1)

Y2 = f2 (Y1 , X2)

Where

Yi: endogenous variable i

Xi: set of exogenous variables in equation i

15

Identification

Order Condition of Identification:K-k ≥ m-1.

If K-k = m-1 (just identified)If K-k > m-1 (over-identified)

Rank Condition of Identification: “If and only if at least one nonzero

determinant of order (M-1)*(M-1) can be constructed from the coefficients of the variables (both endogenous and predetermined) excluded from that particular equation but included in the other equations of the model” (Gujarati, 1995)

16

M o d e l

Equation 1: ind.labfori =f(α0 + α1poori +

α2agei + α3mrtsti + α4edui + α5pychildi + α6hhsexi + α7pbwi + α8pwchildi + α9h.wrksti + α10urbruri + α11unempratei + ε1i)

Equation 2: poori =f(β0 + β1ind.labfori +

β2mrtsti + β3edui + β4pychildi+ β5hhsexi+ β6hhagei + β7pbwi + β8pwchildi + β9h.wrksti + β10urbruri + β11unempratei + ε2i)

θ1ee.poori +

θ2ee.labfori

+

Exogeneity Test(Bollen et al. 1995)

18

Exogeneity Test Results

Model 3 Model 2 Model 1 Estimated Error from

endogenous

endogenous

exogenous

In Labor Force

exogenous exogenous exogenous Poor

19

Results of Equation 1

Same results for the three models except that “age” is only significant in Model 1

Being poor is strongly significant and positively related to labor force participation

Currently married (+FLFP) and presence of a young child (+FLFP) need for money

20

Being in the labor force is strongly (positively) significant in the three models to being poor

Mainly, Models 2 and 3 are similar

Presence of a working child (+Pov), being in the labor force (+Pov), and PBW (-Pov) The more poverty, the more individuals go for work, and increasing PBW can reduce poverty

Results of Equation 2

21

Combined Results PBW (+FLFP) and (-Poverty): Importance of women’s work to

combat poverty. Currently married (+FLFP) and (-

Pov): The more LFP, the higher the income and so less poverty

or currently married are well-off and work for other reasons

Illiterate (-FLFP) and (+Pov): Need for better education of

women

22

One-Step vs. Two-Step

(Equation 2: Models 2 and 3)

1-step 2-step A Priori Expectatio

n

Variable

+ a - a +Presence of Child<6

- a+a (Mod.

2) (Mod. 3)+

- Urban

One-Step Estimation yielded better results

24

Limitations of the Study

Dataset could not support categorization

Lacking information on sample design to adjust for within-group dependency

Cross-sectional data is not helpful in tracking the poverty and female working status of households

25

Further Research Suggestions

Using panel data and cause-and-effect analysis between poverty and female labor force participation to verify the results obtained in this study

Fitting different models for urban and rural women due to the differences in both work and poverty patterns and relationships between them

Dividing the percentage of breadwinners into female or male percentages

26

Policy ImplicationsPolicy Implications Putting women's work in consideration to

help households avoid or escape poverty Revising education and training programs

Life-long learning UN International Decade on Education for

Sustainable Development (ESD) 2005-2014 Taking the living conditions of the working

poor into consideration in macro and micro policies

Media and civil society roles in raising the awareness of the importance of women’s work

Need for employment-oriented policies for poverty alleviation