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This paper investigates the determinants and dynamics of labour demand and specifically informal labour in Egypt’s manufacturing sector, using nationally representative firm-level data from the 2020/21 Egyptian Industrial Firm Behavior Survey. Applying ordinary least squares and fractional logit models, we analyse total employment, the share of informal labour, and its average annual change over the firm life cycle. Three key findings emerge. First, employment is positively associated with capital, exporting, innovation, industrial zones, worker training, and managerial education, and negatively associated with sole proprietorships, wages, and total factor productivity. Second, informal employment is more common among private sector firms, sole proprietorships, and firms using more part-time workers, and less prevalent among firms adopting technology or led by more educated managers. Third, changes in informality over time are modest: most formal firms exhibit no change in the share of informal workers. Notably, formal firms that did not initially employ informal labour tend to increase their informal share, while firms that formalised continue to rely heavily on informal employment. Together, these findings underscore the persistence of informality and limited transitions toward full formalisation within Egypt’s formal manufacturing sector.

This paper investigates the determinants and dynamics of labour demand and specifically informal labour in Egypt’s manufacturing sector, using nationally representative firm-level data from the 2020/21 Egyptian Industrial Firm Behavior Survey. Applying ordinary least squares and fractional logit models, we analyse total employment, the share of informal labour, and its average annual change over the firm life cycle. Three key findings emerge. First, employment is positively associated with capital, exporting, innovation, industrial zones, worker training, and managerial education, and negatively associated with sole proprietorships, wages, and total factor productivity. Second, informal employment is more common among private sector firms, sole proprietorships, and firms using more part-time workers, and less prevalent among firms adopting technology or led by more educated managers. Third, changes in informality over time are modest: most formal firms exhibit no change in the share of informal workers. Notably, formal firms that did not initially employ informal labour tend to increase their informal share, while firms that formalised continue to rely heavily on informal employment. Together, these findings underscore the persistence of informality and limited transitions toward full formalisation within Egypt’s formal manufacturing sector.

The Hungarian election taking place this Sunday is of major significance for the EU as a whole. Prime Minister Viktor Orbán, whose 16-year rule has become increasingly authoritarian, based the election campaign of his Fidesz party on hostility towards Brussels and Kyiv, and has received backing from both Washington and Moscow. In the polls, however, he is trailing behind opposition candidate Péter Magyar and his Tisza party.

A meeting between US President Donald Trump and Nato Secretary-General Mark Rutte on Wednesday has failed to mend the rifts within the alliance. Rutte said afterwards that Trump was "clearly disappointed" by the Europeans' refusal to support the US in the war against Iran, while Trump pointedly raised the subject of Greenland again.

With just a day to go before direct negotiations between the US and Iran begin in Islamabad, both sides are accusing each other of failing to honour the ceasefire. Israel has stepped up its attacks in Lebanon, which Tehran says breaches the ceasefire agreement. And the reopening of the Strait of Hormuz – a key US demand vis-à-vis Iran – remains uncertain.

Next AFET committee meeting will be held on:

• Wednesday 15 2026, room SPAAK 3C50, Brussels

Meetings are webstreamed with the exception of agenda items held "in camera".

AFET - DROI calendar of meetings 2026
Meeting documents
Webstreaming
Source : © European Union, 2026 - EP