The Tunisian revolution quickly sparked a wave of major uprisings in the region, starting from Egypt and spreading to other countries, such as Libya and Syria among others. Not surprisingly, the fuel of uprisings in these countries finds its main sources in inequality, in its various dimensions. Still, inequality patterns in the region are also different.
Countries such as Morocco and Tuni sia show relatively high inequality levels, while others, such as Egypt, show moderate to low inequality levels. Despite this, little is known about the sources of the differences in household welfare distribution across the MENA region countries.
The present paper intends to identify the main driving factors of the distribution of welfare in Tunisia and Egypt. The authors present a regression-based method to compare the labour market and demographic characteristics in both countries, as well as their impact on the distribution of consumption expenditures. For this, they develop a welfare generation model to generate estimates for the contribution of different demographics and labour characteristics for each country to welfare. This allows the authors to capture differences in both returns in employment and demographic characteristics. This paper presents the welfare generation model and its estimation results. These suggest that the most relevant factors in explaining the distribution of welfare are similar in Tunisia and Egypt. Some specific characteristics, such as education and regional characteristics have a different impact in each country.