Wednesday, February 16, 2011

One sign of Egypt's mismanaged economy

David Leonhardt:
Three researchers — Michael Clemens, Lant Pritchett and Claudio Montenegro — recently found a novel way to measure how well various countries use the workers they have. The three compared the wages of immigrants to the United States with the wages of similar workers from the same country who remained home.

A 35-year-old urban Egyptian man with a high school education who moves to the United States can expect an incredible eightfold increase in living standards, the researchers found. Immigrants from only two countries, Yemen and Nigeria, receive a larger boost. In effect, these are the countries with the biggest gap between what their workers can produce in a different environment and what they are actually producing at home.

No wonder 19 percent of Egyptians told Gallup (well before the protests) that they would move to another country if they could. Mr. Clemens says that for every green card the United States awarded in a recent immigration lottery, 146 Egyptians had applied.

So one of the tasks facing Mr. Mubarak’s successors will be creating places within Egypt where Egyptians want to move, much as Indian workers have flowed into Bangalore and Brazilian workers have flowed into Rio.
Egypt? It is the only large country to have become less urban in the last 30 years, according to the World Bank.
Well worth reading it all.

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