Hailey Kurth

900194555

Econ 4051

Dr Mona Said

13 April 2022

Wage Differentials: Inequality

Wage inequality is a global issue that is prevalent in almost every country. Income

inequality is defined as “how unevenly income is distributed throughout a population,” so this

means examining the wages from the highest earners to the lowest earners, men and women, and

other demographic factors that could contribute to one’s earnings (Kopp). This reaction paper

will focus mainly on the difference in earnings between men and women in Egypt and the

working poor in Egypt. Based on the literature, there is prevalent wage inequality in Egypt

especially for women, and government intervention and active labor market policies are needed

to correct the continuing rise in inequality.

Most studies done on wage differentials in Egypt have examined earnings starting from

1988 until, most recently, 2018. In these years, Egypt had undergone significant economic and

political changes, so it provides a well-rounded understanding of inequality throughout different

economic environments. From 1988-1998, according to Said, there was a fall in wages, but the

following eight years showed an increase in real wages but also in wage inequality (Said, 2012).

The period from 2012-2018 will be the main time period focused on throughout this reaction

paper. Overall, from 2012 to 2018 mean real monthly wages fell by 17% and median wages fell

by 11%, this data shows that the last decade Egypt has been seeing an increasing decline in

income for all groups. Also, throughout this time period, using the Gini coefficient, an increase
in wage inequality is extremely prevalent, but especially among women and the working poor:

“between 2012-2018 as measured by the Gini coefficient was observed using all inequality

indices, and for both wages and total income, with the largest inequality increases observed

among women, the less educated and those in urban areas” (Said, 2018). This is an important

factor to focus on because these groups are typically, in socioeconomic terms, the most

marginalized and disadvantaged groups.

From 2012 to 2018, among almost all demographic groups there was an increase in the

proportion of low earners (working poor) throughout all of Egypt from 51% to 57%. The largest

proportion of the working poor is found in rural Egypt, but we also saw a ten percent increase in

the proportion of educated workers (college and above) who qualify as low earners. The highest

increase in proportion of wage earners that are now qualified as low earners was among women

at 68% in 2018. Up until 2012, the gender wage gap in Egypt has been minimal or even positive

for women (in the public sector), however this trend has not continued. In 2018, “the gender gap

turned from 8% in favor of women in the public sector to 7% in favor of men,” and in the private

sector this gap saw a more significant increase from 27% in favor of men to 60% (Said, 2018).

There is also a big corrected gender wage gap which is an indicator of gender-based

discrimination. These are great example of why gender discrimination in the workforce needs to

be addressed. Often many of us fall victim to the narrative women have more rights because

more women are in the workplace than before, but the numbers are still showing clear,

increasing signs of discrimination in Egypt.

There is much to be done in Egypt to correct the increasing wage inequality that is

prevalent among all demographic groups, but especially women. The Egyptian government

could employ different policies that directly tackle gender discrimination and how women are
treated in the workplace. I think maternity leave, partially paid by the government, would be the

best incentive for private sector employers to hire and promote women.
 Works Cited

Kopp, Carol M. “How Income Inequality Works.” Investopedia, Investopedia, 7 Dec. 2021,

https://www.investopedia.com/terms/i/income-inequality.asp.

Said, Mona (2012) “Wages and Inequality in the Egyptian Labor Market in an Era of Financial

Crisis and Revolution” in R. Assaad and C. Kraft (ed.) The Egyptian Labor Market in an

Era of Revolution (London: Oxford University Press)

Said, M., Galal, R., and Sami, M. (2019). "Inequality and income mobility in Egypt." Economic

Research Forum (ERF)