Economic Inequality in the Arab Region

The paper uses harmonized household
survey micro-data to assess the levels and determinants of
economic inequality in 12 Arab countries. It focuses on the
sources of rural-urban, as well as
metropolitan-nonmetropolitan, inequalities and applies the
unconditional quantile regression decomposition technique to
analyze the welfare gaps across the entire distribution. The
analysis finds moderate inequality levels, with the Gini
coefficient for the distribution of household real per
capita total expenditures ranging between 30.7 in Libya and
45 in Mauritania. Differences in households'
endowments, such as demographic composition, human capital,
and community characteristics, appear as the main sources of
the urban-rural welfare gap. There is inequality between
metropolitan and non-metropolitan regions in many countries,
mainly because of differences in returns to households'
characteristics and particularly returns to human capital.