Due to its pyramid population structure, Egypt needs to create jobs at
a high pace to absorb the many new entrants at its labour market.
This article structurally models and quantifies the impact of these
demographic shocks and the shedding of public sector jobs on
unemployment. The findings indicate that Egypt needs to grow at 5%
for many years to come. Job creation better occurs in the private than
in the public sector. Egypt’s public sector has been driving up
government expenditures disproportionably, not only because of the
numerous public sector employees but also because of high public wage
Keywords: Demography, labour supply, employment, public sector
employment, public finance.