Inequality in Egypt: Age-adjusted Gini coefficient

Abstract

Egypt’s current ‘youth bulge’ constitutes the majority of its population, which implies that growth in the working-age population is faster than the overall population growth rate. With a fast-growing young population in Egypt, it is important to understand whether this demographic composition has an impact on the current inequality measures, since an individual’s stage in life deems detrimental for understanding his or her wealth holdings. In this light, this paper departs from the basic life-cycle impact on wealth inequality measures, and alternatively proposes an empirical method to adjust for age-effects in cross-sectional inequality for Egypt. The resulting Age-adjusted Gini coefficient (AG), eliminates wealth inequality that is attributed to age, yet it perpetuates inequality arising from other wealth-generating factors. By using wealth equalising measures, results of the Age-adjusted Gini coefficient show that age and household characteristics have no impact on wealth accumulation in Egypt, however, wealth is greatly influenced by increasing levels of education, making way for possible movement up the mobility scale.