Inequality of Opportunity in the Labor Market for Higher Education Graduates in Egypt and Jordan

Caroline Krafft, University of Minnesota
Ragui Assaad, University of Minnesota

In the Middle East and North Africa, unequal opportunities occur in both the education system and the labor market. Individuals’ outcomes depend on circumstances beyond their control, such as gender or parents’ education. However, it could be that unequal opportunities in the labor market are due to unequal human capital (pre-market inequality). Alternatively, individuals could experience unequal rewards in the labor market even after accounting for differences in their human capital (in-market inequality). This paper tests whether there is in-market inequality of opportunity, focusing on higher education graduates in Egypt and Jordan. Specifically, the paper examines whether a number of labor market outcomes are affected by circumstances after carefully controlling for the type and quality of human capital an individual possesses. Substantial in-market inequality of opportunity is found, such that the functioning of the labor market itself is a substantial source of inequality in Egypt and Jordan.