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This paper aims to identify the level of contribution of different levels of education to remaining in unemployment as well as the transition from unemployment to employment in Egypt.

In this paper, transition probabilities matrix differentiated by gender, age groups, educational levels, marital status and place of residence based on worker flows across employment, unemployment and out of labor force states during the period 2012–2018 using Egypt Labor Market Panel Survey of 2018. The results point to the highly static nature of the Egyptian labor market. Employment and the out of labor force states are the least mobile among labor market states. This is because employment state is very desirable and the out of labor force is the largest labor market states, especially for females. Also, this study examines the impact of different educational levels separately on remaining in unemployment and transition from unemployment to employment state using eight binary logistic regression models.

The main results of transitions from unemployment to employment are relatively large for males, elder-age, uneducated workers as well as workers who are not married and urban residents, and the results of the logistic regression models consistent with the transition probabilities matrix results, except for few cases. Based on the above findings, there is enough evidence to accept the null hypothesis that no education has a positive significant impact to transition unemployed individuals from unemployment to employment, while less than intermediate as well as higher education have a negative significant impact to transition unemployed individuals from unemployment to employment.

This paper proposes to address the problem of the unemployment among highly educated which is much higher compared with illiterates and try to understand the impact of different levels of education separately on the transition from unemployment to employment, to help the policymakers to eradicate the gap between education and the demand of the labor market in Egypt.