nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2020‒08‒31
seventeen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Fuel Poverty Exposure and Drivers: A Comparison of Vulnerability Landscape Between Egypt and Jordan By Fateh Belaid
  2. Education Gap and Youth: A Growing Challenge in the MENA Region By Reham Rizk; Ronia Hawash
  3. Arab Republic of Egypt; Fourth Review Under the Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt By International Monetary Fund
  4. The different forms of crowding-out effects in Morocco: an empirical study (1980-2018) By Zakariae Belmkaddem
  5. Population density index and its use for distribution of covid-19: A case study using Turkish data By Baser, Onur
  6. Less School (Costs), More (Female) Education? Lessons from Egypt Reducing Years of Compulsory Schooling By Elsayed, Ahmed; Marie, Olivier
  7. Patterns of Regional Income Inequality in Egypt: Implications for Sustainable Development Goal 10 By Ioannis Bournakis; Mona Said; Antonio Savoia; Francesco Savoia
  8. Conflict, Rockets, and Birth Outcomes: Evidence from Israel's Operation Protective Edge By Lichtman-Sadot, Shirlee; Benshalom-Tirosh, Neta; Sheiner, Eyal
  9. Short and long-run determinants of inflation in Tunisia By Boukraine, Wissem
  10. "First Palestinian Intifada and Intergenerational Transmission of Human Capital" By Sameh Hallaq
  11. Kuwait; 2019 Article IV Consultation; Press Release; Staff Report; and Statement by the Executive Director for Kuwait By International Monetary Fund
  12. The first victims of Covid-19 in developing countries? The most vulnerable workers to the lockdown of the Tunisian economy By Marouani, Mohamed Ali; Minh, Phuong Le
  13. The Impact of Employer Discrimination on Female Labor Market Outcomes : Experimental Evidence from Tunisia By Alaref,Jumana Jamal Subhi; Nikaein Towfighian,Samira; Paez Salamanca,Gustavo Nicolas; Audah,Mohammed Thabet M
  14. Migration and Inequalities around the Mediterranean Sea By Björn Nilsson; Racha Ramadan
  15. Banking risk management between the prudential and the operational approaches : case of Moroccan banks ACHIBANE Mustapha By Mustapha Achibane; Imane Allam
  16. Morocco; Technical Assistance Report-Monetary and Financial Statistics Mission (July 17 - 28, 2017) By International Monetary Fund
  17. Kuwait; Financial System Stability Assessment By International Monetary Fund

  1. By: Fateh Belaid
    Abstract: This article, using ERF-LIS harmonized microdata, develops an empirical model to investigate the unexplored extent and fuel poverty explanatory factors in Egypt and Jordan. First, we use the “Low income – High Consumption” indicator to measure the fuel poverty extent. Second, we implement a multivariate statistical approach to untangle the fuel poor household profile. Then, to explore the factors driving the risk of falling into fuel poverty situations we use a logistic regression model. This research is an important empirical contribution to the sparse literature of fuel vulnerability in MENA countries. It puts forward an empirical approach, which is helpful in discerning and targeting families most in need of energy and financial related assistance. From policy perspectives, the findings provide promising ways of accounting for the fuel poverty phenomenon as a vector of inequality trends in the MENA region. The main findings of the research point to the crucial instrumental role of economic conditions, reducing inequalities and access to education facilities in attenuating fuel poverty in Egypt and Jordan. Policies that mitigate fuel poverty may thus have direct impacts on both well-being and inequalities reduction.
    JEL: C1 D1 I3 Q4
    Date: 2020–05
  2. By: Reham Rizk; Ronia Hawash
    Abstract: Education inequality has always been a concern for policy makers due to its long-term and intergenerational impacts. This paper examines the determinants and the sources of education inequality among the youth in the MENA region using harmonized income and expenditure surveys. More attention is given to income and regional disparities as source of education inequality. The paper makes use of the Recentered Influence Functions (RIF) unconditional regression techniques to examine youth education inequality measured by years of schooling and to identify the determinants of Gini index of education across countries. The findings show that higher household income reduces education inequality among youth in Iraq and higher education expenditure reduces education inequality for youth in both Egypt and Iraq. Health expenditure is found to be having insignificant impact on education inequality for youth in all countries. Moreover, increasing the number of earners in the household reduce education inequality in both Jordan and Palestine and increases youth education inequality in Iraq and Egypt. It has been also deduced that rural regions are at a disadvantage in terms of educational attainment and educational inequality in comparison to urban regions across all countries and all income quartiles. The decomposition of rich-poor education inequality, reveals that the education gap among youth appear to increase for the poor compared to the rich. Finally, there is a declining trend in youth educational inequality over time for Egypt and Iraq. However, the gap seems to be widening for Jordan and Palestine.
    JEL: I24 O15 O53
    Date: 2020–05
  3. By: International Monetary Fund
    Abstract: This paper discusses Argentina’s Fourth Review under the Extended Arrangement under the Extended Fund Facility (EFF). The paper highlights that Egypt’s macroeconomic situation has improved markedly since the initiation of the authorities’ reform program in November 2016. The liberalization of the foreign exchange market, prudent monetary policy, and ambitious fiscal consolidation has helped stabilize the macroeconomic environment. Growth has accelerated; external and fiscal deficits have narrowed; international reserves have risen; and public debt, inflation, and unemployment have declined. The external environment has shifted in recent months, posing new policy challenges. The tightening of global financial conditions and heightened global risk aversion have contributed to a pullback by investors from emerging markets. The outlook remains favorable, provided policies agreed under the program are implemented, but the balance of risks has shifted. The authorities’ prudent policies have been instrumental in preserving macroeconomic stability, even as the external environment has weakened notably. The IMF staff supports the authorities’ request for the completion of the fourth review under the Extended Arrangement under the Extended Fund Facility.
    Keywords: External sector;Unemployment;Supply and demand;Employment;Inflation;Egyptian pound,overall balance,primary balance,finance gap,medium-term
    Date: 2019–04–06
  4. By: Zakariae Belmkaddem (UCD - Université Chouaib Doukkali)
    Date: 2019–07–12
  5. By: Baser, Onur
    Abstract: Since March 2020, Turkey has been experiencing a large outbreak of a novel coronavirus (2019-nCoV). We estimated the population weighted density for each of the 81 cities in Turkey as well as the districts of its three densest cities. Istanbul, a city of 16 million, has a district with a population weighted density more than 5 times higher than New York City, the epicenter of Covid-19 pandemic. By using weighted least squares, we calculated the elasticity of the Covid-19 spread with respect to population weighted density as 0.67. In addition to the density, the proportion of people over 65, the per capita GDP, and the number of total health care workers in each city positively contributed to the case numbers, while education level and temperature had a negative effect. We suggested a policy measure on how to transfer health care workers from different areas to the areas with a possibility of wide spread and rank some of the cities according to their success at minimizing death given their population weighted density.
    Keywords: Density index, covid-19, turkish data, distribution
    JEL: C0 I1
    Date: 2020–04–22
  6. By: Elsayed, Ahmed (IZA); Marie, Olivier (Erasmus University Rotterdam)
    Abstract: Exploiting a unique policy reform in Egypt that reduced the number of years of compulsory schooling, we show how it unexpectedly increased education attainment as more students chose to complete the next school stage. This impact is almost entirely driven by girls from more disadvantaged households. Treated women later experienced important positive improvements in labor market opportunity and marriage quality, as measured by bride price received and household bargaining power. We attribute the increased investment in daughters' human capital to changes in the behavior of credit-constrained families facing reduced school costs combined with strongly non-linear returns to female education.
    Keywords: school costs, education investment, gender bias, female labor market, marriage, bride price, Egypt
    JEL: I21 I25 J24 O55
    Date: 2020–06
  7. By: Ioannis Bournakis; Mona Said; Antonio Savoia; Francesco Savoia
    Abstract: Income distribution is seen as instrumental to human development and to a number of development outcomes through a variety of channels. It is also considered important in itself, as testified by its inclusion in the Sustainable Development Goals. Yet existing research on income inequality in developing economies has not devoted much attention to the regional dimension. This is important, as progress in reducing income inequality at national level on SDG Goal 10 is only a partial success if a country presents large regional variation, where very unequal regions coexist alongside relatively equal ones. This paper contributes to fill this gap by offering a case study on Egypt, and adds to our knowledge of income inequality in the Arab region, an area that has not seen extensive empirical analysis. Using newly assembled data by LIS and a range of inequality measures, the paper shows that there has generally been an increase in income inequality during 1999-2015 and finds evidence of unconditional convergence in income distribution across Egyptian Governorates. This result implies that income inequality in less unequal regions grows faster than in more equal regions, regardless of regional characteristics. Second, the speed of convergence has not been uniform: sustained for most regions, but significantly slower or even lacking for some regions. Finally, convergence across regions has been significant also for the bottom forty per cent and proportion of people living below 50% median income, implying that maintaining this convergence process will be an important policy avenue to guarantee that progress on SDG 10 will be geographically widespread, achieving shared prosperity at both the national and regional level.
    JEL: O15 D63
    Date: 2020–07
  8. By: Lichtman-Sadot, Shirlee (Ben Gurion University); Benshalom-Tirosh, Neta (Ben Gurion University); Sheiner, Eyal (Ben Gurion University)
    Abstract: In summer 2014, southern Israel experienced rocket attacks from the Hamas-ruled Gaza strip on a nearly daily basis for over 50 consecutive days. We exploit this unexpected escalation in the Israeli-Palestinian conflict and variation across localities in Israel in the amount of sirens that warned of rocket attacks to measure the effect of conflict intensity on birth weight and gestation length among mothers who were pregnant during this period. In addition to the common notion that conflict intensity induces stress and anxiety, we also show that conflict intensity is correlated with absences from work and lack of prenatal care. Results on changes in birth outcomes are consistent with a detrimental effect of stress and reduced prenatal care and a beneficial effect of reduced work attendance during pregnancy. Our results demonstrate that multiple factors can impact birth outcomes when evaluating the effect of armed conflict and that the effects can also be qualitatively different.
    Keywords: birth outcomes, prenatal stress, prenatal care, Israeli-Palestinian conflict
    JEL: I10 I12
    Date: 2020–06
  9. By: Boukraine, Wissem
    Abstract: The depreciation of the national currency, the higher wage costs passed on to prices and the growing external debt, has characterized the Tunisian economy for almost a decade. In this context we investigate its inflation dynamics to understand which variables affects it in the short and the long run. We apply the Autoregressive Distributed-lagged model over quarterly data from 2010 to 2019 alongside the bound testing approach. Our results suggest a significant impact of external debt and loans on inflation in the short and long run, while GDP growth affects inflation only in the long run.
    Keywords: Inflation, ARDL, Tunisia
    JEL: C01 E31
    Date: 2020
  10. By: Sameh Hallaq
    Abstract: This paper attempts to estimate the intergenerational transmission of human capital in Palestine. The main question is whether formal parental education improves their offspring's cognitive skills and school achievements. I use the instrumental variable (IV) method in the estimations to overcome the potential endogeneity of parental education. The main source of variation in parental educational attainment is parents' exposure to the First Palestinian Intifada (1988-93) during their middle- and high school ages. During the First Palestinian Intifada, many school days were lost due to frequent school closures and other restrictions. Furthermore, many young people preferred to search for low-skill employment in Israel, since it provided them with better wages than the local labor market and hardly required any level of educational attainment. This study employs two outcomes, namely the standardized cognitive test scores and school achievements during the academic year 2012/13 for students between grade 5 and grade 9 in West Bank schools. Overall, the results support the hypothesis of a human capital spillover but more so for girls than for boys, where the IV results are often insignificant because of their large standard errors.
    Keywords: Intergenerational Mobility; First Intifada
    JEL: I20 J62
    Date: 2020–07
  11. By: International Monetary Fund
    Abstract: This Article IV Consultation highlights that growth has strengthened, and fiscal and external positions improved due to higher oil prices. The increased uncertainty about oil price prospects though underscores the need to reduce dependence on oil and increase savings for the future. The key priority is to build national consensus around equitable and well-sequenced reforms to underpin fiscal consolidation and promote the private sector. While authorities’ efforts to strengthen the fiscal accounts are welcomed, more ambitious reforms will be needed to secure adequate savings for future generations and reduce financing needs. Reforming the public wage bill, subsidies, and transfers, raising non-oil revenue, and enhancing the fiscal policy framework and governance are expected to support fiscal consolidation and increase the efficiency of spending on human and physical capital. Creating jobs for the large number of nationals joining the labor force over the next decade hinges on the emergence of a vibrant private sector.
    Keywords: Fiscal policy;Credit;Central banks;Financial and Monetary Sector;Expenditures;non-oil,CBK,investment income,FSSA,overall balance
    Date: 2019–04–02
  12. By: Marouani, Mohamed Ali; Minh, Phuong Le
    Abstract: While the Covid-19 pandemic had both health and economic effects in rich countries, the first wave impacted many developing countries’ mainly through its economic and social consequences. The objective of this paper is to perform a first-round assessment of the potential consequences on workers using the Tunisian labor force survey. Three main factors of vulnerability are investigated, the inability to work from home, being part of a non essential industry and working for the private sector. We find that the most affected are craftsmen, machine operators and elementary occupations in non-agricultural activities. The typically vulnerable worker is a young individual with low education, a man if self-employed and a woman with a temporary contract and lower earnings if wage-earner. When we take into account self-employed workers, the managers’ category becomes the most affected among high and medium skill occupations. When we look at regional effects, we unexpectedly find that the coastal regions (except the capital) are the most fragile. This is due to the fact that most of the manufacturing, tourism and international transport activities are located in coastal regions.
    Date: 2020
  13. By: Alaref,Jumana Jamal Subhi; Nikaein Towfighian,Samira; Paez Salamanca,Gustavo Nicolas; Audah,Mohammed Thabet M
    Abstract: The role of employer discrimination in widening labor market differences between men and women has been hypothesized and investigated in different settings. Using a field experiment, this paper examines the presence and magnitude of gender-based discrimination by employers at the point of screening in Tunisia. The study sent out 1,571 fictitious and substantially identical pairs of male and female resumes in response to online job advertisements. On average, women were 2.4 percentage points more likely than men to receive a callback from an employer. However, this average effect hides substantial heterogeneity across economic sectors. In the information technology sector, women were 15 percentage points less likely to receive a callback than men. No discrimination against or in favor of women is found in engineering, whereas in marketing and finance, women were 19 and 4 percentage points more likely to receive a callback, respectively. The paper also finds that, unlike men, women may suffer from discrimination based on their physical appearance. Veiled women were 8.5 percentage points less likely to receive a callback than non-veiled women. Overall, the findings suggest that, at the point of screening, employer discrimination against women in Tunisia is sector specific, and, on its own, it cannot fully explain the complex challenge of female unemployment in the country.
    Date: 2020–08–13
  14. By: Björn Nilsson; Racha Ramadan
    Abstract: This paper aims to quantify the effects from migration on net income distributions, disentangling the roles played by factor reallocation and remittances, and focusing on two (primarily) destination countries (Spain and Italy) and two (primarily) origin countries (Jordan and Iraq). Using LIS-ERF data sets for the four countries; the paper relies separately on a variant of a shift-share instrument to identify the effect of migration on inequalities at the regional level in Spain and Italy, and on quantile regression to estimate the impact of receiving remittances on per capita expenditure in Iraq and Jordan. The results suggest that migration increases inequality in both origin and receiving countries.
    JEL: D31 D63 O15
    Date: 2020–05
  15. By: Mustapha Achibane (UIT - Université Ibn Tofaïl); Imane Allam (UIT - Université Ibn Tofaïl)
    Date: 2019–09–28
  16. By: International Monetary Fund
    Abstract: This Technical Assistance Report discusses the finalization of the development of standardized report forms (SRF) for other financial corporations (OFC). The mission held constructive discussions with Bank Al-Maghrib’s (BAM) staff on various other aspects of the compilation of monetary and financial statistics (MFS) aimed at improving the quality of the data. These discussions led to the preparation of a detailed action plan with the following priority recommendations carrying particular weight to make headway in improving MFS. The mission held constructive discussions with the staff of the Banking Supervision Department on the classification in the monetary statistics of the financial products offered by Islamic banks. The mission supported BAM proposal to develop a reporting form for the collection of bank source data on securities valuation. The mission made recommendations to improve the sectoring of the financial statements of finance companies and offshore banks.
    Keywords: Monetary statistics;Financial statistics;Central banks;Bank accounting;Financial institutions;OFCs,bam,finance company,STA,SSM
    Date: 2019–03–25
  17. By: International Monetary Fund
    Abstract: This Financial System Stability Assessment paper discusses that Kuwait’s limited economic diversification is directly reflected in the bank-centric financial sector. Banks have high concentrations to single borrowers, large depositors, and sectors, as well as significant common exposures. Risks to the financial sector are mostly external, stemming from oil price shocks, geopolitical tensions, and global financial developments. The risks are mitigated by sizeable sovereign financial assets, and by the ability of public entities to provide liquidity through large deposits. Stress tests suggest that banks are resilient to a wide range of shocks. The newly developed regulatory framework for capital market participants and products is an important step, but some gaps remain. The authorities have made important progress in strengthening the macroprudential framework. The crisis management framework and financial safety net arrangements should be strengthened and further operationalized. The diversification and resilience of the economy is expected to benefit from better financial inclusion of small-and-medium enterprises.
    Keywords: Bank credit;External sector;Central banks;Financial soundness indicators;Market interest rates;CBK,islamic bank,Shariah,liquidity,risk-based
    Date: 2019–04–02

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