Economic Research Forum (ERF)

Inequalities in Jordan before and after the pandemic

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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.

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  • 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

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