Income Inequality in the Arab Region: Data and Measurement, Patterns and Trends

Abstract

This paper provides a review of empirical knowledge about income inequality in the Arab region, focusing primarily on the issues of data and measurement, and the characterization of its patterns and trends. The review shows good progress in the availability of data and quality of measurement. However, the region remains far behind progress being achieved worldwide in terms of coverage and comparability across countries, improvements in quality and content of data, and, more importantly, accessibility of available micro-data to scholars. Within these data constraints and limitations, the available evidence shows moderately high levels of inequality in terms of household expenditure compared to other regions of the world. The patterns of inequality show quite significant variation across countries. One striking result is the weak time variability of the inequality indexes in most of the countries of the region. Alternative measures of welfare distribution such as of horizontal inequality, polarization or inequality of opportunity have been widely used worldwide to supplement the Lorentz-based inequality criteria, but such measures are very scarce in Arab countries. We finally offer suggestions for a research agenda to better our understanding about the nature and determinants of inequality in the region.