Exploring the Determinants of Welfare Distribution in Tunisia and Egypt Using a Welfare Generation Model

The present paper intends to identify the main driving factors of the distribution of welfare in Tunisia and Egypt. We present a regression-based method to compare the labor market and demographic characteristics in both countries, as well as their impact on the distribution of consumption expenditures. For this, we develop a welfare generation model to generate estimates for the contribution of different demographics and labor characteristics for each country to welfare. This allows us to capture differences in both returns in employment and demographic characteristics. In this paper, we present the welfare generation model and its estimation results. These suggest that the most relevant factors in explaining the distribution of welfare are similar in Tunisia and Egypt. Some specific characteristics, such as education and regional characteristics, have a different impact in each country.