Working papers

Studies of economic inequality have traditionally relied on income or consumption as their welfare aggregate. This is problematic, because households choose their labor market participation, and smooth their consumption over time based on their wealth. Neither income nor consumption measures welfare or inequality perfectly. Wealth must be accounted for as an economic outcome as well as a driver of lifetime opportunities. Since wealth is distributed more widely, and is related positively to income and consumption, overall inequality is likely to exceed inequality measured by income or consumption alone. We use panel surveys and wealth indexes based on productive and non-productive household assets to examine economic inequality in four MENA countries – Egypt, Ethiopia, Jordan and Tunisia. Wealth distribution and households’ economic mobility are evaluated across surveys. To mitigate ordinality of wealth indexes, they are benchmarked by applying relative asset prices estimated in one survey to other surveys.

Education is one of the most important types of investment in human capital that is beneficial. Private returns to education include financial option returns, non-financial options and non-market returns. On the other hand, the social returns to education include economic growth and non-market social effects. Education has many development goals i.e. it is considered as a tool of social empowerment and global competitiveness. Moreover, education is the most significant asset that explains income disparities among individuals. Accordingly, equity in education leads to equity in income distribution. The main objective of this paper is to estimate the demand and supply functions for schooling in Egypt using the data of the Egypt Labour Market Panel Survey 2012. It is concluded that, the number of years of schooling and the family characteristics are the main variables that affect the demand and supply functions of education in Egypt.

The objective of the paper is to test the impact of exports and innovation on the demand of skilled labor in the MENA region using firm-level data. In this matter, our contribution is threefold. First, we examine the connection between exports and skill bias through several innovation and technology adoption indicators. Second, we differentiate between the effect of innovation on skilled blue-collar (production workers) vs. white collars workers (non-production workers). Third, we test this relationship for nine MENA countries, using firm-level data from the World Bank Enterprise Survey (2013). Our results suggest a positive and significant impact of exports on innovation and technology adoption. Furthermore, demand for skilled production workers by firms in the MENA region is likely to be higher than that for non-production workers. This demand is particularly high when a firm adopts a new logistics method, a new production method, a new product and a new organizational structure. Third, the larger the firm, the higher the demand for skilled production and non-production labor.