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Abstract
The trend in real agricultural wages in Egypt is described well by an inverted U-shaped
curve with a peak around 1985. But the rise and fall of real wages masks a
complex dynamic process by which nominal wages adjust in response to changes in food
prices. We use governorate-level panel data for 1976–1993 to explore the nature of this
adjustment process. Our results indicate that nominal wages adjust slowly. There is a
significant negative initial impact of rising food prices on real wages, though wages do
catch up in the long run.