Why is Social Insurance Coverage Declining in Egypt? A Decomposition Analysis

We analyze in this paper the decline in social insurance coverage in Egypt from 2007 to 2021 to determine the extent to which it was due to compositional shits in the structure of the economy or the workforce as opposed to changes in coverage for specific types of jobs and workers. We conclude that only a fraction of the decline in coverage can be attributed to structural changes in the economy or to changes in the characteristics of firms and workers. The largest decline in coverage occurred in the period from 2014 to 2017 and were concentrated among male new entrants with no formal education in private sector services working in micro and small enterprises. Although the declines occurred for both wage and nonwage workers, they were larger for the latter. Correcting for firm size, we see that there was a slight reversal in the declining trend post 2018, but coverage rates in 2021 remain well below what they were in 2014 when the declining trend accelerated.