Economic Research Forum (ERF)

Inequalities in Jordan before and after the pandemic

1105
Is Covid-19 increasing inequalities in Jordan? This column outlines the main findings of a new report on the impact of the pandemic on inequality in expenditure, incomes and educational opportunities and outcomes.

In a nutshell

Women, youth, Syrians and individuals living in urban areas of Jordan are more likely to have lost income during the crisis.

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.

Inequality in educational opportunities at the completed primary level for young people is persistently high, with wealth being the most influential factor.

Covid-19 poses massive economic challenges for the Jordanian economy, as elsewhere in the region and worldwide. The pandemic has exacerbated existing inequalities, both economic and non-economic, between different socio-economic groups. Understanding the determinants of inequalities and the characteristics of the vulnerable groups is required to provide adequate policies to reduce inequalities, eradicate poverty and leave no one behind.

Within this context, our new report provides an overview of inequalities in Jordan, before and after the outbreak of Covid-19. Based on data availability, the report focuses on inequality in expenditure as a proxy for income inequality. For inequalities in capabilities, the report focuses on inequality in educational outcomes and opportunities. The report summarises the results of the empirical analysis conducted through a research partnership between UNDP Jordan and ERF.

The report sheds light on the drivers of income inequality and examines inequalities of opportunities and outcomes in education using the latest rounds of the Jordan Household Income and Expenditure Survey (HIES). Covid-19 raises renewed concerns about inequality. Leveraging 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 socio-economic characteristics of individuals, such as their education level, employment status and geographical location, as well as the returns to such characteristics.

Geographical inequality is in favour of the urban areas. While the gender wage gap is in favour of men, the gender expenditure gap is in favour of households headed by women.

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 with 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 with boys.

The results show that inequality of opportunity in education arises from circumstances beyond individuals’ 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 individual and household characteristics on the vulnerability of losing income, shows that the pandemic has had 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 addresses questions around how children’s education has been influenced by school closures as a response to the Covid-19 outbreak. We examine the socio-economic 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 programmes targeting the poorest and vulnerable segment and improve targeting of social protection schemes.

More measures are needed to support jobs and workers. For example, temporary cash transfers for those who have been laid off and the 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 programmes to reduce illiteracy rates and to formulate ICT literacy programmes, particularly for adults.

Finally, it is worth noting that the analysis is limited by data availability and by the different variants of Covid-19 that may continue affecting the labour market and the economy.

 

This column summarises ‘Is Covid-19 Increasing Inequalities in Jordan?’ by Rana Hendy, Racha Ramadan and Reham Rizk, ERF Policy Research Report No. 41.

Tags: , , , ,

  • Rana Hendy
    Rana Hendy
    Assistant Professor and Director of the Master Program in Public Policy, Public Policy and Administration Department, The American University in Cairo, Egypt
  • Racha Ramadan
    Racha Ramadan
    Associate Professor at Faculty of Economics and Political Science, Cairo University
  • Reham Rizk
    Reham Rizk
    Associate Professor, University of London

Most read

Green hydrogen production and exports: could MENA countries lead the way?

The Arab region stands at the threshold of a transformative opportunity to become a global leader in green hydrogen production and exports. But as this column explains, achieving this potential will require substantial investments, robust policy frameworks and a commitment to technological innovation.

Freedom: the missing piece in analysis of multidimensional wellbeing

Political philosophy has long emphasised the importance of freedom in shaping a meaningful life, yet it is consistently overlooked in assessments of human wellbeing across multiple dimensions. This column focuses on the freedom to express opinions, noting that it is shaped by both formal laws and informal social dynamics, fluctuating with the changing cultural context, particularly in the age of social media. Data on public opinion in Arab countries over the past decade are revealing about how this key freedom is perceived.

Egypt’s labour market: new survey data for evidence-based decision-making

As Egypt faces substantial social and economic shifts, understanding the labour market is crucial for designing policies that promote employment and inclusive economic growth. This column introduces the latest wave of the Egypt Labor Market Panel Survey, which provides fresh, nationally representative data that are vital for examining these dynamics.

Child stunting in Tunisia: an alarming rise

Child stunting in Tunisia seemed to have fallen significantly over the past two decades. But as this column reports, new analysis indicates that the positive trend has now gone dramatically into reverse. Indeed, the evidence is unequivocal: the nutritional health of the country’s youngest citizens is rapidly deteriorating and requires immediate and decisive action.

New horizons for economic transformation in the GCC countries

The countries of the Gulf Cooperation Council (GCC) have historically relied on hydrocarbons for economic growth. As this column explains ahead of a high-level ERF policy seminar in Dubai, emerging technologies like artificial intelligence, blockchain and robotics – what some call the fourth industrial revolution – present a unique opportunity for the region to reduce its dependence on oil and make the transition to a knowledge-based economy.

Shifting public trust in governments across the Arab world

The Arab Spring, which began over a decade ago, was driven by popular distrust in governments of the region. The column reports on how public trust has shifted since then, drawing on survey data collected soon after the uprising and ten years later. The findings reveal a dynamic and often fragile landscape of trust in Arab governments from the early 2010s to the early 2020s. Growing distrust across many countries should raise concerns about future political and social instability.

Corruption in Iran: the role of oil rents

How do fluctuations in oil rents influence levels of corruption in Iran? This column reports the findings of new research, which examines the impact of increases in the country’s oil revenues on corruption, including the mechanisms through which the effects occur – higher inflation, greater public spending on the military and the weakness of democratic institutions.

The evolution of labour supply in Egypt

Egypt stands at a critical point in its demographic and labour market evolution. As this column explains, while fertility rates have dropped, reducing long-term demographic pressures, the ‘echo generation’, children of the youth bulge, will soon enter the labour market, intensifying the need for policies to accelerate job creation. At the same time, participation in the labour force, particularly among women and young people, is declining, partly as a result of discouragement.

More jobs, better jobs and inclusive jobs: the promise of renewable energy

Among the many economic and environmental challenges facing the countries of the Middle East and North Africa (MENA), two stand out: the need for jobs and the need to combat the threat of climate change by moving away from reliance on fossil fuels. As this column explains, embracing renewable energy technologies presents an opportunity for the region to diversify its economy, mitigate the possible negative impacts of digital technologies on existing jobs, reduce its carbon footprint and create significant levels of employment, particularly for women and the youth, across a variety of sectors.

Towards a productive, inclusive and green economy in MENA

Decarbonisation of the global economy is a huge opportunity for countries in the Middle East and North Africa. As this column explains, they can supercharge their development by breaking into fast-growing industries that will help the world to reduce its emissions and reach net zero, as well as offering greater employment opportunities and new export lines. Micro, small and medium enterprises in the region can lead the transition to a cleaner and sustainable future, but this may require the formation of clusters of firms that overcome some of the constraints that their limited size could involve.




LinkedIn