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


Date:
May, 2016

NO.
1002

Length:
40 pages

Topic:
D3. Distribution
E2. Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
D6. Welfare Economics
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.

ملخص

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


Authors

Caroline Krafft

Assistant Professor of economics at St. Catherine University


Authors

John Roemer

Professor of Political Science & Economics at Yale University


Research Fellows

Djavad Salehi-Isfahani

Professor, Virginia Tech University


Project

EVENTS

There are no Events PAST



Related Publications

Working Papers

The Evolution of Wage Formation and Inequality in Jordan in 2010-2016

Rami Galal and Mona Said

This paper investigates wage formation and inequality in Jordan over the period 2010 to 2016 ... read more


Working Papers

Household Asset Wealth and Female Labor Supply in MENA

Shireen Al Azzawi and Vladimir Hlasny

Female labor force participation rates in the Middle East and North Africa are low compared ... read more


Working Papers

Household Asset Inequality in Turkey: How Informative is the Survey of Income and Living Conditions?

Cem Baslevent

Using micro data from the Survey of Income and Living Conditions conducted by TurkStat, we ... read more