Is Covid-19 Increasing Inequalities in Jordan?

The COVID-19 pandemic poses massive economic challenges on the Jordanian economy, as well as on other economies in the region and worldwide. The COVID-19 pandemic has exacerbated the existing inequalities, economic and non-economic inequalities, between the different socio-economic groups. Hence, understanding the determinants of inequalities and the characteristics of the vulnerable groups are required to provide adequate policies to reduce inequalities, eradicate poverty and leave no one behind. Within this context, the present report overviews the inequality status in Jordan, before and after the outbreak of COVID-19. Based on data availability, the report tackles inequality in expenditure as a proxy of income inequality. While for inequalities in capabilities, the report focuses on inequality in educational outcomes and opportunities. The report summarizes the results of the empirical analysis conducted through research partnership between UNDP Jordan and Economic Research Forum.* The report sheds the light on the drivers of income inequality and examines inequalities of opportunities and of outcomes in education using the latest rounds of the Jordan Household Income and Expenditure Survey (HIES). COVID-19 raises the renewed concerns about inequality. Leveraging on the second wave of the COVID-19 MENA Monitor data, collected by ERF, we examine the impact on income inequality and education. The analysis shows that income inequality is mainly driven by differences in the socioeconomic characteristics of individuals such as education level, employment status and geographical location, as well as the returns to such characteristics. Geographical inequality is in favor of the urban areas. While the gender wage gap is in favor of men, the gender expenditure gap is in favor of female-headed households. Inequality of outcomes in education is related to individual effort such as time and effort spent on educational attainment and measured using the highest educational level attained by students over the period from 2008 to 2017. The findings show that overall inequality of educational outcomes has been widening over time in particular with completing secondary education and above compared to basic completion. The main drivers of educational inequality include parental wealth and education. Additionally, girls in Jordan are less likely to complete basic education compared to boys. The results show that inequality of opportunity in education arises from circumstances beyond the individual’s control such as parental education and financial resources. Inequality in educational opportunities at the completed primary level for young people is persistently high, with wealth being the most influential factor. Inequality of opportunity at the secondary level of education and higher has worsened over time with household wealth being the most important determinant. Assessing the impact of COVID-19 on income, by examining the impacts of the individuals’ and households’ characteristics on the vulnerability of losing income, show that the economic drawback of the pandemic has disproportionate impacts on individuals according to their economic activity, education level, nationality, gender, income group and age. Women, youth, Syrians and individuals living in urban areas are more likely to have lost income during the crisis. Moreover, employment is a key determinant. Informal employees, those working in hard-hit sectors and those who were suspended or had a decline in their wage payment, are more vulnerable to decreasing household income. The report pursues answering the questions of how children’s education are influenced by school closures as a response to COVID-19 outbreak. We examine the socioeconomic status of households using different educational tools during the COVID-19 school closure. The main drivers of inequality for education are families’ education and financial resources. Families play a very important role in helping their children in using online platforms and books. The usage of online education and receiving parents’ help contribute to unequal opportunities for kids in school. Moreover, educated parents can assist their kids in schoolwork and measure their performance over time. Several policy lessons can be concluded from the analysis. Fiscal reforms are required, with removal of subsidies for richer households, poverty reduction programs targeting the poorest and vulnerable segment and improve targeting of social protection schemes. More measures are needed to support jobs and workers. For instance, temporary cash transfers for the lay-offs and self-employed. For education, the government needs to take additional actions to guarantee basic schooling for children, reduce school dropout rates, and improve the quality of education. Other policy options include awareness campaigns, offering conditional cash assistance targeting the least advantaged families to help their children progress at school. As parents’ education is one of the main drivers of inequality of outcomes in education; the government can design programs to reduce illiteracy rates and to formulate ICT literacy programs, particularly for adults. Finally, it is worth noting that the presented analysis is limited by data availability and by the different variants of the COVID-19 that may continue affecting the labor market and the economy.