Income Distribution, Fertility Behavior and Demographic Transition in Egypt: A Dual Causality?

Abstract - Demographic-economic interrelationships have been broadly examined in the literature from a macro perspective using mostly cross-country panel regressions. A limited strand of literature has emphasized the need to examine the demographic-economic dynamics in a reversed way; inspect dual-causality relation between demographic and economic factors. In this paper, I examine the effect of changes in income distribution and fertility behavior on the speed of demographic transition. I moreover examine the reverse relation by testing effect of changed household structure on income distribution and income disparities in Egypt. Empirical results show that wealth redistribution in Egypt and moving up to higher wealth quintiles did not have a significant effect on decreasing child dependency. Moreover, results also indicate that demographic transition process and the decline in dependency levels that took place since the nineties of the past century didn’t have a significant effect on income disparities in Egypt. The results affirm my previous empirical findings with Nassar et al. (2016); that the dominant effect that has led to changes in child dependency in Egypt was rather the modification in fertility behaviors within wealth groups than the changes in socioeconomic factors.