Inter-Group Expenditure Gaps in the Arab Region and Their Determinants : Application to Egypt, Jordan, Palestine and Tunisia

Economic inequality across socio-demographic groups in the Arab region has been suggested to be high and persistent. This paper assesses the main dimensions of this inequality and their incidence across the consumption expenditure distribution in years surrounding the Arab uprisings. The paper evaluates the differentials in household expenditures across rural/urban areas, female/male-headed households, non-educated/educated-headed households and non-employed/employed-headed households in twelve Household Income and Expenditure surveys from four Arab countries: Egypt (2008, 2010, 2012 and 2015), Jordan (2006, 2010 and 2013), Palestine (2007, 2010 and 2011) and Tunisia (2005 and 2010). Unconditional quantile regressions are used to analyze the differentials across the population distribution and to decompose them by source. Our results show that Egypt and Tunisia – countries that have faced political instability during the early 2010s – exhibit relatively high expenditure gaps across rural/urban and non-educated/educated groups. Expenditure gaps in Jordan and Palestine – countries that have largely avoided Arab Spring related uprisings – are more moderate across non-employed/employed and female/male headed households. Overall, education and the return to it and household composition play an important role in bringing about, as well as reducing, economic inequality across social groups. These findings have important implications for the development policy in the four Arab countries