Economic Research Forum (ERF)

Inequalities in Jordan before and after the pandemic

1187
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

Trust in Lebanon’s public institutions: a challenge for the new leadership

Lebanon’s new leadership confronts daunting economic challenges amid geopolitical tensions across the wider region. As this column explains, understanding what has happened over the past decade to citizens’ trust in key public institutions – parliament, the government and the armed forces – will be a crucial part of the policy response.

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.

Small businesses in the Great Lockdown: lessons for crisis management

Understanding big economic shocks like Covid-19 and how firms respond to them is crucial for mitigating their negative effects and accelerating the post-crisis recovery. This column reports evidence on how small and medium-sized enterprises in Tunisia’s formal business sector adapted to the pandemic and the lockdown – and draws policy lessons for when the next crisis hits.

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.

The threat of cybercrime in MENA economies

The MENA region’s increasing access to digital information and internet usage has led to an explosion in e-commerce and widespread interest in cryptocurrencies. At the same time, cybercrime, which includes hacking, malware, online fraud and harassment, has spread across digital networks. This column outlines the challenges.

Qatarisation: playing the long game on workforce nationalisation

As national populations across the Gulf have grown and hydrocarbon reserves declined, most Gulf countries have sought to move to a more sustainable economic model underpinned by raising the share of citizens in the productive private sector. But, as this column explains, Qatar differs from its neighbours in several important ways that could render aggressive workforce nationalization policies counterproductive. In terms of such policies, the country should chart its own path.

Economic consequences of the 2003 Bam earthquake in Iran

Over the decades, Iran has faced numerous devastating natural disasters, including the deadly 2003 Bam earthquake. This column reports evidence on the unexpected economic boost in Bam County and its neighbours after the disaster – the result of a variety of factors, including national and international aid, political mobilisation and the region’s cultural significance. Using data on the intensity of night-time lights in a geographical area, the research reveals how disaster recovery may lead to a surprising economic rebound.

Macroeconomic policy-making for sustainable development in Egypt

In recent years, economic policy in Egypt has been focused primarily on macroeconomic stabilisation to curb inflation, to reduce the fiscal deficit and the current account deficit, and to increase GDP growth. As this column explains, this has come at the expense of the country’s progress on the Sustainable Development Goals, which is rather modest compared with other economies in the region or at the same income level. Sustainable development needs to be more integrated with the conception and implementation of fiscal and monetary policies.

Education and health in Tunisia: is human capital at risk?

Tunisia has made significant strides in enhancing the skills, knowledge and health of its population, all cornerstones of economic growth and social progress. This column examines the state of the country’s education and healthcare systems, identifying structural weaknesses that could jeopardise human capital and, by extension, progress towards achieving the sustainable development goals.

Qatar’s pursuit of government excellence: promises and pitfalls

As Qatar seeks to make the transition from a hydrocarbon-based economy to a diversified, knowledge-based economy, ‘government excellence’ has been identified as a key strategic objective. This column reports what government effectiveness means in terms of delivery of public services, digitalisation of services, and control of corruption – and outlines the progress made to date on these development priorities and what the country needs to do to meet its targets.