Expert Commentary

Inequality of opportunity in Egypt

2011 study by the World Bank Economic Review on the contribution of inequality of opportunity to earnings inequality over time.

Since the beginning of the “Arab Spring” in December 2010, governments in Tunisia, Egypt and Libya have fallen, while protests and strife continue in Syria, Yemen and other nations. The source of the discontent was diverse, but deeply felt — decades of struggling under authoritarian regimes, certainly, but also high rates of unemployment and a grinding sense of inequality.

A 2011 study published in The World Bank Economic Review, “Inequality of Opportunity in Egypt,” uses population data to try to understand how the lack of opportunity contributes to earnings inequality across three time periods and different groups. The study seeks to “distinguish inequalities due to unequal opportunities from inequalities due
to individual choices,” in order to

The study’s findings include:

  • Between 1988 and 1998, earnings inequality in Egypt declined slightly before increasing substantially in 2006.
  • Between 1988 and 2006, opportunity inequality was relatively stable, with a “modest decrease” in 1998. Because of the increase in earnings inequality, the contribution of opportunity inequality to earnings inequality declined from 22% in 1988 to 15% in 2006.
  • Unequal opportunities that contributed to income inequality were most closely associated with a person’s gender, his or her father’s and mother’s education, the father’s occupation, and the person’s region of birth. Overall, “the father’s background and geographic origins had the largest effect on earnings.”
  • The researcher concludes, “Egypt’s transition to a more market-oriented economy since the early 2000s, together with rising inflation, might have contributed to widening income differentials. Expansion of intermediate and higher education between 1988 and 1998, followed by slower expansion from 1998 onward, especially affecting underprivileged social groups might have contributed to equalizing opportunities during the first period and limited the increase in earnings gaps between circumstance groups in the second period.”

With respect to policy implications, the author writes, “These findings suggest that policies aimed at reducing the earnings effect of father’s education and skills and of regional origins would help reduce inequality of opportunities in Egypt.”

Tags: Middle East, poverty