Economic Research Forum (ERF)

Inequalities in Jordan before and after the pandemic

1140
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

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.

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.

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.

Participation of Arab countries in global value chains

To what extent are countries in the Arab region participating in the global value chains (GVCs) that now dominate world trade? What are the main determinants of engagement in GVCs? And what are the expected benefits for Arab countries from joining them? This column answers these questions, concluding that it is important to focus on the products in which countries both enjoy a natural comparative advantage and can increase domestic value added in the intermediate and final parts of the production process.

Climate change: a growing threat to sustainable development in Tunisia

Tunisia’s vulnerability to extreme weather events is intensifying, placing immense pressure on vital sectors such as agriculture, energy and water resources, exacerbating inequalities and hindering social progress. This column explores the economic impacts of climate change on the country, its implications for achieving the sustainable development goals, and the urgent need for adaptive strategies and policy interventions.

Growth in the Middle East and North Africa

What is the economic outlook for the Middle East and North Africa? How is the current conflict centred in Gaza affecting economies in the region? What are the potential long-term effects of conflict on development? And which strategies can MENA countries adopt to accelerate economic growth? This column outlines the findings in the World Bank’s latest half-yearly MENA Economic Update, which answers these questions and more.

Rising influence: women’s empowerment within Arab households

In 2016 and again in 2022, a reliable poll of public opinion in the Arab world asked respondents in seven countries whether they agreed with the statement that ‘a man should have final say in all decisions concerning the family’. As this column reports, the changing balance of responses between the two surveys gives an indication of whether there been progress in the distribution of decision-making within households towards greater empowerment of women.

Assessing Jordan’s progress on the sustainable development goals

Global, regional and national assessments of countries’ progress towards reaching the sustainable development goals do not always tell the same story. This column examines the case of Jordan, which is among the world’s leaders in statistical performance on the SDGs.

Unleashing the potential of Egyptian exports for sustainable development

Despite several waves of trade liberalisation, Egypt’s integration in the world economy has remained modest. In addition, the structure of its exports has not changed and remains largely dominated by traditional products. This column argues that the government should develop a new export strategy that is forward-looking by taking account not only of the country’s comparative advantage, but also how global demand evolves. The strategy should also be more inclusive and more supportive of sustainable development.

International and regional financial integration in MENA

What are the effects of financial integration at both the regional and international level on the domestic economies of the Middle East and North Africa? This column summarises new research evidence on this question. The results suggest that while regional financial integration offers substantial benefits, ‘too much’ international integration could hinder financial development.