Inequality of Opportunity in Wages and Consumption in Egypt

Abstract

<p class="first" id="P1">Most explanations of the recent political upheavals in Egypt since 2011 include a reference to rising inequality, but the usual indicators of income inequality in Egypt do not support that inequality was on the rise prior to the uprisings. In this paper we provide measures of inequality of opportunity in wages and consumption for Egypt at different points in time from 1988 to 2012 that shed light on the gap between popular perceptions and measured indices of inequality. Our findings indicate that although measures of inequality of wage income have increased over time in Egypt starting in 1998, the share attributable to circumstances declined steadily throughout the whole period. We attribute this decline to the fact that outcomes for individuals from a middle class background have moved closer to the outcomes of those from a poor background. The outcomes for those from privileged backgrounds remain quite apart from the rest. </p>