Modelling Poverty and Female Labor Force Participation in Egypt. My MSc in Statistics Thesis presentation 2007 Cairo University

1. M.Sc. Results by:
Samaa Hazem Hosny
Cairo University
2007
Modelling the Relationship
between Poverty and Female
Working Status in Egypt

3. 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. 5
Introduction
International Importance of Topic:
MDG 1:
"To Eradicate Extreme Poverty and Hunger"
MDG 3:
"To Promote Gender Equality and Empower
Women "

6. 6
Introduction
World 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. 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. 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. 10
Determinants of Poverty
1. Education
2. Region
3. Family Composition / Dependency Ratio
4. Employment
5. Housing
6. Health

11. 11
1. Education
2. Poverty
3. Family Composition
Determinants of
Female Labor Force Participation

13. 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. 14
Identification
Y1 = f1 (Y2 , X1)
Y2 = f2 (Y1 , X2)
Where
Yi: endogenous variable i
Xi: set of exogenous variables in equation i

15. 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. 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. 18
Exogeneity Test Results
Model 3Model 2Model 1
Estimated
Error from
endogenousendogenousexogenous
In Labor
Force
exogenousexogenousexogenousPoor

19. 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. 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. 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. 22
One-Step vs. Two-Step
(Equation 2: Models 2 and 3)
1-step2-stepA Priori
Expectation
Variable
+ a- a+
Presence of
Child<6
- a
+a (Mod. 2)
(Mod. 3)+-Urban
One-Step Estimation yielded better results

24. 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. 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. 26
Policy 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