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What Drive Regional Economic Inequalities in Tunisia? Evidence From Unconditional Quantile Decomposition Analysis

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  • Hatem Jemmali

    (University of Tunis El-Manar, Tunisia)

Abstract

This paper analyzes the level and main drivers of economic inequality among rural–urban, littoral-inland and nonmetropolitan-metropolitan households in Tunisia using nationally representative data set. On average and across the welfare distribution, households living in privileged regions, mainly in urban and metropolitan areas, are found to be wealthier than their counterparts in rural and nonmetropolitan areas. The analysis finds a non-uniform inequality as well (U-shape) across quantiles in the logarithm of household's consumption expenditure per capita suggesting that consumption differentials are found to be much higher at the top end and the bottom than at the middle of the welfare distribution. Using the newly developed methods of decomposition, we endeavor to decompose the distributional welfare differentials among households into endowment effects, explained by differences in households' characteristics, including the head's educational and employment characteristics, and unexplained effects attributable to unequal returns to these covariates. We find that the endowment effects dominate the return effects and contribute more to the overall gap throughout the welfare distribution. General household’s characteristics and educational level of the head appear as the main and common drivers of different regional consumption differentials.

Suggested Citation

  • Hatem Jemmali, 2017. "What Drive Regional Economic Inequalities in Tunisia? Evidence From Unconditional Quantile Decomposition Analysis," Working Papers 1159, Economic Research Forum, revised 11 2017.
    • Handle: RePEc:erg:wpaper:1159
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