The Determinants of Private Sector Demand for Employment in Egypt: 1990-2007

This study empirically estimates the critical parameters of private sector demand determinants for employment in Egypt by using annual time series-cross section data (1990-2007) and by applying a fixed effects panel Seemingly Unrelated Regression (SUR) model. The empirical results confirm that, in both long run and short run, there are positive and significant relationship between the private demand for employment and real private domestic product and real private investment. On the other hand, there is unexpected positive and significant relationship between the private demand for employment and the real wages in the long run, and negative and insignificant relationship in the short run. The study also confirm that, if private demand for employment is one percent out of equilibrium, a 44 percent adjustment towards equilibrium will take place within the first year.