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.