GPIR Working Papers (English)
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- ItemCoping Strategies and Inequalities during the COVID-19 Pandemic Period: Evidence from Kenya(African Economic Research Consortium, 2024-04-10) Giovanis, Eleftherios; Ozdamar, OznurGovernments worldwide have implemented stringent lockdown measures in response to the COVID-19 pandemic outbreak, which has had an adverse impact on employment, affecting people's public life, health, and wellbeing. People have witnessed job losses, cuts in wages, and a decline in their living standards and quality of life. This study aims to estimate the inequalities and wellbeing costs, demonstrating the living standards necessary to make up for people's wage reduction or job losses. In particular, we aim to explore the coping strategies used to enhance their wellbeing compared to those of households without a coping strategy. We use food insecurity as a measure of wellbeing outcomes. The empirical analysis relies on detailed household surveys from the World Bank Microdata Library. We use seven waves of the Panel COVID-19 Rapid Response Phone Survey with Households in 2020‒2022 in Kenya. Also, the results highlight the potential inequalities of the COVID-19 pandemic across gender and types of workers, such as those employed in the informal sector and on temporary contracts. The findings show that specific coping strategies, such as delayed payment obligations, credit purchases, and reduced non-food consumption, are associated with larger inequalities. Regarding the gender of the head of the household, the results suggest that the disparities between female-headed households that had to cope with income and employment loss and female-headed households that did not require to follow any strategy are significantly higher compared to their male counterparts. We derive similar concluding remarks when we consider households with social security coverage and the type of employment contract. Key words: Coping strategies; COVID-19; Food insecurity; Inequalities; Kenya; Panel data; Sub-Saharan region; Risks; World Bank microdata.
- ItemAsymmetric Response of Poverty to Growth and Inequality in South Africa: Implications for Current and Future Shocks(African Economic Research Consortium, 2024-04-10) Ngepah, NicholasThis study investigates the effect of economic growth on poverty reduction, given inequality in South Africa. It focuses on whether the poor suffer more losses of welfare during economic recessions and depressions than they gain during expansions, and the factors that can assist the poor to stay afloat during times of economic shocks. Individuals in micro data set are matches with municipality-level data and in binary, truncated, panel, instrumental variables, and quantile regression techniques to estimate poverty and welfare effects of positive and negative economic growth rates. The study finds that, while economic growth reduces poverty, it is not enough to compensate for the poverty-raising effects of inequality. Moreover, economic decline raises poverty, but economic prosperity more than compensates by a higher magnitude. The study also reveals that, social grants and free health care and education policies have limited effects on poverty reduction during economic downturns. The findings call for policy measures that reduce inequality and promote economic growth to help cushion the poor during times of significant economic decline. Additionally, programmes that provide good education up to tertiary level and access to the labour market are crucial for sustaining poverty reduction efforts in South Africa.
- ItemCOVID-19 Pandemic, Poverty and Health Outcomes in South Africa: Do Social Protection Programmes Protect?(African Economic Research Consortium, 2024-04-10) Omotayo, Abiodun Olusola; Ogunniyi, Adebayo IsaiahThe COVID-19 pandemic resulted in significant income loss for many people, and deepened poverty for individuals and vulnerable populations who were adversely affected through job losses. In South Africa, income loss made it harder to acquire health care and a healthy food, which had a negative impact on health outcomes. This study hypothesized that the COVID-19 shocks disproportionately affects the poor's health, hence the need to know the impact of social protection programmes and interventions through the South Africa Social Security Grant (SASSG). Herewith, we employed the nationally represented, robust and reliable National Income Dynamics Study (NIDS) data set which was conducted in 2017 (pre-COVID-19), with the 1st wave of the NIDS-Coronavirus Rapid Mobile Survey (NIDS-CRAM) conducted in 2021 (during COVID-19). The household's per capita total income was used to generate poverty lines, while concentration curves and indices were employed to explain the income-health inequalities. The Difference-in-Difference with fixed effects model was used to estimate the impact of SASSG on the COVID-19 poverty stressors and self-reported health status. Given the significance and magnitude of institutional variables in determining the socioeconomic inequalities in poor health, addressing hunger, income inequality, and unemployment slightly helped to mitigate income-health inequalities during the COVID-19 shocks. We found that the social protection intervention in South Africa (SASSG) cushioned the impact of the COVID-19 pandemic in the context of poverty stressors and self-reported health status. Therefore, we advocate for programmes in South Africa that focus on reducing poverty and health disparities connected to income, as well as more proactive social protection programmes. Key words: COVID-19 shocks; Health capital; Income inequality; Redistribution relationships; Social security grant; South Africa.
- ItemChoice of the Type of School and Outcomes for Youth in the Labour Market in Togo(African Economic Research Consortium, 2024-04-10) Koudjom, Etayibtalnam; Ngoko, Eric Hubert; Limazie, Mazignada Sika; Mafang, LionieThe objective of this research is to analyse the impact of the choice of a type of school by parents on the wage of young individuals in the labour market in Togo. To do this, the multinomial endogenous switching model has been specified and estimated. The empirical analysis is based on the Harmonized Survey on Household Living Conditions (EHCVM, 2018) conducted by the National Institute of Statistics and Economic and Demographic Studies in Togo (INSEED-Togo) on 16,821 young people aged between 15 and 35 years. The results reveal that the variables relating to the distances which separate the schools from the homes of the young individual’s parents (distance to public school and distance to private school), male gender, age, level of secondary and higher education, and the Maritime and Kara regions of residence; and socio professional category (employed father, employed mother) are the main determinants of parents’ choice to enrol their children in a type of school. In addition, the results indicate that young people in the age group considered with access to private type training have advantages in the labour market in terms of wage increases compared to young individuals with access to other types of training or who have not chosen any training. These results provide useful information for public policies in Togo. They imply that policies aimed at reducing inequalities among young people in the labour market should consider the type of school attended by the young people as an effective tool to achieve these objectives. These development policies can target, in particular, young individuals who did not attend any type of school and those who have had the chance to attend public type of training. Key words: School; Parents; Young people; Labour market; Salary; Togo. JEL classification codes: D63; I20; J40.
- ItemIncome Inequality and Growth: Calibration and Simulation for the Kenyan Economy(African Economic Research Consortium, 2024-04-10) Mbara, GilbertWe investigate the notable decline in wealth and income inequality in Kenya over the 10-year period between 2005 and 2015. Using a calibrated continuous time heterogeneous agent model, we attribute up to 92% of the variation in top wealth inequality to a persistent but slow increase in the return to capital, a low risk free rate, and rising “effective” income tax rates. Our study suggests that a macroeconomic environment characterized by low risk-free interest rates anchored by low debt-to fiscal revenue ratios are key to reducing both wealth and income inequality.
- ItemExamining Poverty Dynamics in Ghana: Evidence from Longitudinal and Repeated Cross-Sectional Data(African Economic Research Consortium, 2024-04-10) Gafa, Dede; Hodey, Louis; Senadza, BernardinThis article examines poverty dynamics in Ghana using the Ghana Socioeconomic Panel Surveys (GSPS) and a synthetic panel based on repeated cross-sectional data (the Ghana Living Standard Surveys (GLSS). It provides insight into the extent of poverty mobility and persistence in Ghana, and the factors that explain poverty transitions. The results show that upward mobility has been a key feature of Ghana's poverty transitions between 2006 and 2019. However, there are still high probabilities of poverty persistence and downward mobility among initially poor and non-poor households, respectively. Furthermore, notable heterogeneities exist in poverty transitions across socioeconomic groups. Poverty is more chronic in rural areas and the northern parts of Ghana compared with urban and southern regions, respectively, and among households headed by persons from opportunity-deprived backgrounds. Other characteristics such as the gender of the household head, his/her occupation, and level of education, as well as the number of dependents, are important correlates of poverty persistence and downward mobility in Ghana. Hence, addressing chronic poverty requires targeted policies that foster more inclusive and sustainable growth in rural areas and northern parts of Ghana, and improved access to opportunities for people from disadvantaged backgrounds, the unemployed, and those in vulnerable employment. Key words: Poverty dynamics; Synthetic panel; Africa. JEL classification codes: D63; I32.
- ItemImpact of the COVID-19 Pandemic on Income Inequalities in Cameroon: The Influence of Employment Status(African Economic Research Consortium, 2024-08-12) DEFFO, Rodrigue NDA'CHI; TCHOUMDOP, Michèle Estelle NDONOU; KAMGA, Benjamin FOMBADue to interruptions and closures of activities resulting from social distancing measures implemented to limit the spread of the virus, individuals have seen their incomes reduced, increasing poverty and pre-crisis inequalities. These inequalities have been exacerbated by measures such as the increase in family allowances, which only benefit civil servants. The objective of this study is to analyse the contribution of the activity situation due to COVID-19 to household income inequalities in Cameroon. The data used are those collected from 604 households by CEREG as part of an IDRC-funded study on the impact of public policies related to the COVID-19 pandemic in Burkina Faso, Cameroon, Côte d'Ivoire and Senegal. The Gini and Theil inequality indices show increased income inequality in households where the head is not employed. The conditional quantile regression shows that employment status has a significant and higher effect during severe restrictions on the incomes of typical households in the 25th, 50th, 75th, and 90th percentiles. On the other hand, this increased the distribution of income inequalities within households in the first three quartiles, more than 70% of which can be explained by the change in behaviour resulting from the loss of employment by the heads of household. This result is confirmed by the fact that the share of employment in the formation of income inequalities fell during severe restrictions, according to the Shapley decomposition.
- ItemPoverty, Inequality and Inclusive Growth Dynamics: Evidence from Nigeria’s Panel Household Surveys(African Economic Research Consortium, 2024-08-12) Edeh, Henry C.; Ozor, Jane O.Using updated Nigeria’s micro panel household surveys, we estimate the impact of human capital endowments on household economic well-being – controlling for exogenous circumstance-related factors over which households have little or no control. We found that education and health endowments have significant causal impact on the well-being of the households. More so, education has significant causal impact on the income of households below the bottom 40% (specifically the households at the bottom 25%). Inequalities at the national level are mainly determined by rural-urban and northern-southern inequalities. These observed income inequalities in rural-urban sectors and northern-southern geopolitical zones are mainly propelled by differences in education and health endowments of the households. However, the equalization of human capital endowments in terms of education and health is indeed growth-enhancing. We suggest, therefore, that policies capable of eliminating inequalities in access to schooling and health will enable households at the bottom of the distribution to enjoy better economic well-being.