Asset Inequality in MENA : The Missing Dimension?

The vast majority of existing studies gauging economic inequality rely on current household income or consumption expenditures. Since wealth is distributed more widely across households, and household wealth is related positively to income and consumption, overall inequality is likely to exceed inequality measured by income or consumption alone. Wealth should thus be included in the measurement of inequality, in tandem with them. Moreover, since wealth is not only an outcome but a productive factor and an important driver of lifetime opportunities of all household members, it is important to understand its distribution across households in different demographic groups, countries and points in time.This study examines economic inequality in four MENA countries – Egypt, Ethiopia, Jordan and Tunisia – using measures of wealth based on productive and non-productive household assets (including livestock, farm equipment and capitalization of firms owned by households), and using high-quality partially harmonized panel surveys. In Egypt and Ethiopia, household wealth and its distribution is tracked across multiple survey waves of the Egyptian Labor Market Panel Survey and the Ethiopian Socio-Economic Survey. This is done by applying the relative prices of all assets from benchmark years to other years. The study reports the degree of inequality in the wealth index within countries, and across regional and other demographic dimensions. Comparisons of wealth distributions across countries, and their evolution over time (in Egypt and Ethiopia) are made, and implications for households' welfare are discussed. Wealth distribution is juxtaposed with the distribution of household wage earnings or consumption to gauge the degree of multidimensional inequality, and the relationship between productive and non-productive assets is estimated