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The report on poverty and unemployment in Egypt presents a detailed survey of key issues related to the current situation and trends in the country, and it presents an annotated bibliography of the recent literature in these areas. The general conclusion that can be derived from the evidence on poverty, income inequality and unemployment studies in Egypt is that parsimonious models of growth and income inequality and those of labor markets have limited used in Egypt. Instead, market segmentation and other imperfections, and the strong formal and informal institutional factors governing the operation of the economy in general and enterprises in particular are likely to be more useful in explaining how macroeconomic adjustment and structural reform are essential for a sustained reduction in aggregate poverty. However, lack of adequate data undermines the credibility of empirical analysis on the key components linking economic growth to employment generation, as a necessary condition for sustained poverty reduction, and structural adjustment as a necessary condition for employment and productivity recovery. United States Agency for International Development (USAID)/Egypt (62 pages). February 1998