Inequality in the Middle East and North Africa region
Paper Session
Friday, Jan. 7, 2022 12:15 PM - 2:15 PM (EST)
- Chair: Amirah El-Haddad, German Development Institute
The Informalization of the Egyptian Economy (1998–2012): A Driver of Growing Wage Inequality
Abstract
We run recentered influence function (RIF) regressions, using Firpo et al. (2007) distributional approach to identify each control variable’s contribution on the decomposition of wage changes. Using the Egyptian Labour Market Surveys 1998–2012 for waged men we find that wage changes between 1998 and 2012 mainly resulted in increased inequality. The richer percentiles have persistently enjoyed disproportionately larger positive changes in real hourly wages. Whilst increasing in all three wage gaps, inequality increased the most between the top and bottom deciles (90–10 gap), i.e. between the lowest and highest wage earners. This increase in inequality is primarily driven by the unexplained wage structure effect. The distinct labour market segments are foremost responsible for the increased inequality trend. Private sector informality is the largest contributor to increased inequality. The sector does not adhere to a minimum wage, and being unregulated it has responded dramatically to the severe competitive pressures caused by the departing middle classes of the public sector. It suppressed mid and low-end wages resulting in sharp wage gaps at the tails. Public sector wage setting dynamics and the direction of labour movements since liberalization cause the sector to contribute more to wage inequality than does its formal private counterpart.The Impacts of Growth and Distributional Changes on Poverty and Vulnerability: A Global Analysis
Abstract
The impact of COVID-19 on money metric poverty and vulnerability to it, as well as the trajectory toward meeting the Sustainable Development Goals from the current state, have attracted tremendous global concern. Using absolute definitions for the demarcation of poverty and vulnerability, and based on distributional group-records data from national surveys worldwide, we investigate regularities in the distributional impacts of economic growth. We then project the poverty headcount and depth, and the cost of alleviating poverty, for years 2020-2030. First, using beta and generalized-quadratic parametric approximations, we fit continuous income distributions for all countries, and using country-reported poverty headcounts estimate the corresponding national poverty lines. Second, using the historically observed national accounts growth rates and growth rates in mean incomes, we estimate the pass through of national growth to households. Combined with observed trends in national Gini coefficients of inequality, and projected national accounts growth over the following decade, we project the shape of national income distributions for years 2020-2030. This allows us to project the scale of redistribution needed to alleviate poverty in each year, and comment on the prospective source and type of the required fiscal instruments. Finally, for countries where income or poverty-line data are scarce, we impute the regionally justified poverty lines using tendencies in surrounding countries, and we compute the corresponding poverty statistics. Our findings will be used to track the economic cost of COVID-19 for the poor, and the prospective trajectories of recovery under several growth and redistribution scenarios.The Nexus between Fuel, Income, and Housing Poverty: Evidence from Egypt
Abstract
We develop an empirical model to examine the linkage between fuel, income, and housing poverty in developing countries. Our analysis focuses on Egypt, a country that has undergone rapid development and significant energy reforms in recent years. Employing a probit and ordered multinomial framework to data from the Egyptian HIECS Survey, a nationally representative sample of both households and dwellings, we estimate the fuel, income, and housing poverty extent and their key determinants. Our results show that households with low income, high energy, and high housing expenses represent about 16.4% of the total population (respectively, 7.44% for low income, high energy, and low housing expenses). Our findings on key factors of those LIHC poverty types have some interesting policy implications for fuel poverty phenomenon understanding and inequality reduction in Egypt, not only for the LIHC definition, but for any indicator of (fuel) poverty involving the post-housing (energy cost) concept.Analyzing the Inequality and Welfare Status in Iran and Its Competitors: Applying Multi- Criteria Decision Making Techniques
Abstract
Inequality and welfare have ever been two social-economic concerns in so many countries the significance of which increased after the inception of development economics in 1950. In the beginning, inequality and welfare status, IWS was evaluated solely on the unidimensional and economic-centred issue. After the 1970s (the first wave of socio-economic changes), and especially in the 1990s(the second wave of changes), and in the continuation of 21 century the multifaceted nature of inequality and welfare became visible. The importance of social and political aspects of inequality and welfare status, IWS, came up visa vis to economic problems. This article is analyzing the situation of IWS, for Iran and some selected countries including 2020. Selected countries amongst its competitors, South- West Asian ones, for 1980-2020. Selected countries include Azerbaijan, Qatar, Turkmenistan, Afghanistan, Uzbekistan, Jordan, Kazakhstan, Tajikistan, Lebanon, Armenia, Bahrain, Egypt, Georgia, Saudi Arabia, Iraq, Oman, Pakistan, Kirghizstan, Yemen, Kuwait, Emirate, Turkey, Syria. Due to their multidimensional nature of inequality and welfare, applying, the ordinary instruments for analyzing their IWS is not working properly. Hence this article is using Multi-Criteria Decision-Making techniques. Also due to deficiencies of ordinary economic indexes for investigating inequality and welfare status, IWS, this paper is using different indices for exploring the situation of education, health, environmental issues, and so on alongside economic indices. Meanwhile, as the Iranian economy has a specific structure, we maintain one presupposition in this article. That is: “the trend of any variable in Iranian economy including IWS, is affected by two-pack factors; Usual-Technical Factors, UTFs, on one hand, and Primal or Cause of cause Factors, PCFs on the other hand”.The results indicate the calamity of IWS in Iran and a few of the above-mentioned countries. The urgency of sufficient investment in improving the social, environmental and political institutions of countries in question is one policy implication of this research.JEL Classifications
- D6 - Welfare Economics
- R1 - General Regional Economics