Inequality of Opportunity in Wages and Consumption in Egypt - Economic Research Forum (ERF)

Inequality of Opportunity in Wages and Consumption in Egypt

Ragui Assaad, Caroline Krafft, John Roemer and Djavad Salehi-Isfahani

May, 2016


40 pages

D3. Distribution
D6. Welfare Economics
E2. Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
O1. Economic Development

We provide in this paper measures of inequality of opportunity of wages and consumption for Egypt at different points in time from 1988 to 2012. A standard way of measuring the degree of inequality of opportunity in a society is to choose a set of circumstances – characteristics of the individual’s environment that affect his future income and are beyond his control – and to partition the population into types, where a type is the set of individuals with the same circumstances. Inequality in the outcomes of interest between types is attributable to inequality of opportunity, whereas inequality within types is attributable to effort or luck. Although measures of inequality of wage income are increasing over time in Egypt starting in 1998, the share attributable to circumstances appears to be declining steadily throughout the whole period. We attribute this decline to the fact that outcomes for the middle class are moving closer to the outcomes of the lower classes. The outcomes for the most privileged groups remain quite different. Another possible explanation is that unobserved circumstances are playing a growing role in inequality of opportunity in Egypt.


نقدم في هذه الورقة تدابير لعدم تكافؤ الفرص في الأجور والاستهلاك لمصر في نقاط مختلفة في الوقت من عام 1988 إلى عام 2012. وهناك طريقة معيارية لقياس درجة من عدم تكافؤ الفرص في المجتمع وهي اختيار مجموعة من الظروف – مثل خصائص بيئة الفرد وتؤثر على دخله في المستقبل وتكون خارجة عن إرادته – وتقسيم السكان إلى أنواع، حيث أن النوع هو مجموعة من الأفراد مع نفس الظروف. عدم المساواة في النتائج في المصالح بين الأنواع تعزى إلى عدم تكافؤ الفرص، في حين أن عدم المساواة داخل أنواع تعزى إلى الجهد أو الحظ. وعلى الرغم من تدابير عدم المساواة في الدخل من الأجور تتزايد مع مرور الوقت في مصر بدءا من عام 1998، تعزى الحصة إلى أن الانخفاض المتواصل طوال تلك الفترة. ونحن نعزو هذا الانخفاض إلى حقيقة أن نتائجها للطبقة الوسطى تقترب إلى نتائج الطبقات الدنيا. لا تزال نتائج الفئات الأكثر تميزا مختلفة تماما. تفسير آخر محتمل هو أن الظروف غير الملحوظة يلعبون دورا متزايدا في عدم تكافؤ الفرص في مصر

Research Fellows

Ragui Assaad

Professor of Planning and Public Affairs, University of Minnesota


Caroline Krafft

Assistant Professor of economics at St. Catherine University


John Roemer

Professor of Political Science & Economics at Yale University

Research Fellows

Djavad Salehi-Isfahani

Professor, Virginia Tech University



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