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

In the Middle East and North Africa, unequal opportunities occur in both the education system and the labor market. The outcomes that individuals achieve in the labor market depend on circumstances beyond their control, such as gender or parents’ education, as well as the effort they expend in succeeding in the education system and in the labor market itself. The extent to which outcomes depend on circumstances outside an individual’s control is typically referred to as inequality of opportunity. It could be that unequal opportunities in the labor market are due to unequal human capital (pre-market inequality) or, alternatively, to individuals being treated unequally 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 in Egypt and Jordan, focusing on the labor market experiences of higher education graduates. Specifically, the paper examines whether a number of labor market outcomes are affected by circumstances, such as family background, gender, and place of birth, after carefully controlling for the type and quality of human capital an individual possesses. We find that substantial in-market inequality exists in both settings, but more so in Egypt, suggesting that the functioning of the labor market itself is a substantial source of inequality of opportunity.