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Inequality of opportunity in earnings and assets in Egypt

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  • Rami Galal
  • Hoda El Enbaby

Abstract

By most available measures, the level of inequality in the MENA region, including Egypt, is considered relatively low. This regularity applies to both inequality of outcomes as well as inequality of opportunity. This paper challenges this view. It argues specifically that circumstances beyond the control of individuals account for a larger share of inequality of opportunity when asset distribution is considered rather than the distribution of earnings, essentially because earnings are subject to measurement errors and idiosyncratic shocks. The paper tests this proposition by estimating the extent to which factors related to the circumstances a person is born into contribute to inequality of opportunity in earnings as well as asset ownership. The results show that circumstances account 26–32% of inequality of asset distribution, compared with only 8–10% of inequality of opportunity in earnings. The analysis further shows that the area of birth and fathers education level are the two most important circumstance factors contributing to inequality of opportunity, for both assets and earnings.

Suggested Citation

  • Rami Galal & Hoda El Enbaby, 2020. "Inequality of opportunity in earnings and assets in Egypt," Applied Economics, Taylor & Francis Journals, vol. 52(38), pages 4146-4161, July.
    • Handle: RePEc:taf:applec:v:52:y:2020:i:38:p:4146-4161
    DOI: 10.1080/00036846.2020.1731409
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    Cited by:

    1. Ibragimova, Zulfiya & Frants, Marina, 2021. "Measuring income opportunity inequality: A structural review and meta-analysis," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 61, pages 89-109.
    2. Caroline Krafft & Ragui Assaad & Ruby Cheung, 2024. "Introducing the Sudan Labor Market Panel Survey 2022," HiCN Working Papers 406, Households in Conflict Network.

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