The Arab Inequality Puzzle: The Role of Income Sources in Egypt and Tunisia

Caroline Krafft and Elizabeth Davis

No 405, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: Egypt and Tunisia are perceived to have high levels of inequality, yet based on standard measures, inequality in these two countries is not unusually high. In this study we explore a new dimension of inequality in Egypt and Tunisia by using a more complete measure of income and decomposing inequality by income sources (factor components). We find that higher-income households have more income sources than lower-income ones. Informal wage work and earnings from household enterprises are more common in Egypt than Tunisia, while formal wage work, pensions, and social assistance are more common in Tunisia. Social assistance does little to offset income inequality in either country. Enterprise earnings (in Egypt) and agricultural earnings (in Tunisia) as well as rent and other capital income in both countries play a large role in inequality. High inequality in these non-wage income sources may help explain why inequality is perceived to be high.

Keywords: Income inequality; inequality decomposition; wages; Egypt; Tunisia (search for similar items in EconPapers)
JEL-codes: D31 O15 P46 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ara, nep-dev and nep-lma
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https://www.econstor.eu/bitstream/10419/204300/1/GLO-DP-0405.pdf (application/pdf)

Related works:
Journal Article: The Arab inequality puzzle: the role of income sources in Egypt and Tunisia (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:405

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