Growth, distribution and poverty in Madagascar

This paper presents an applied microsimulation model built on household data with explicit treatment of heterogeneity of skills, labor preferences and opportunities, and consumption preferences at the individual and/or household level, while allowing for an endogenous determination of relative prices between sectors. The model is primarily focused on labor markets and labor allocation at the household level, but consumption behavior is also modeled. Modeling choices are driven by a desire to make the best possible use of microeconomic information derived from household data. This framework supports analysis of the impact of different growth strategies on poverty and income distribution, without making use of the “representative agent” assumption. The model is built on household survey data and represents the behavior of 4,508 households. Household behavioral equations are estimated econometrically. Different sets of simulation are carried out to examine the comparative statics of the model and study the impact of different growth strategies on poverty and inequality. Simulation results show the potential usefulness of this class of models to derive both poverty and inequality measures and transition matrices without prior assumptions regarding the intra-group income distribution. Market clearing equations allow for the endogenous determination of relative prices between sectors. The impact of different growth strategies on poverty and inequality is complex given general equilibrium effects and the wide range of household positions in markets for factors and goods markets. Partial equilibrium analysis or the use of representative households would miss these effects.Microeconomics Madagascar. ,Madagascar. ,Labor market. ,Poverty. ,TMD ,

Risk and Schooling Decisions in Rural Madagascar: a Panel Data Analysis.

La plupart des ménages ruraux malgaches tirent l’essentiel de leurs revenus de l’agriculture et sont exposés à un fort degré d’incertitude en raison de la fréquence et de l’intensité des aléas frappant les champs de culture ou les troupeaux. En l’absence de marchés du crédit ou de l’assurance, des moyens alternatifs pour éliminer ou atténuer les conséquences défavorables de cette incertitude doivent être trouvés par les ménages. Dans cet article, nous envisageons la possibilité que la mise au travail des enfants constitue un mécanisme de gestion des risques. Afin de tester cette hypothèse, nous examinons les déterminants de la scolarisation en cycle primaire d’un échantillon d’enfants issus de ménages ruraux. Nous examinons notamment le rôle des chocs de revenu subis par les ménages sur les probabilités d’entrée (dans) et de sortie hors de l’école de leurs membres en âge d’être scolarisés, en portant une attention particulière aux questions de genre et d’allocation intra-ménage des ressources. Les résultats indiquent que les chocs transitoires de revenu ont un impact significatif sur la probabilité de sortie de l’école mais pas sur la probabilité d’entrer à l’école. Cela suggère que la déscolarisation des enfants les plus âgés constitue un mécanisme de gestion du risque pour les ménages ruraux.Most households in rural Madagascar are engaged in agriculture and derive a large share of their income from the production of food or cash crops and from animal husbandry. However, agricultural yields can be extremely volatile due to weather conditions, pests, insects, rodents and other calamities. As a result, households record large fluctuations in their incomes that must be dealt with. Since the usual consumption-smoothing market mechanisms are quite limited in the Malagasy context, households need to rely on nonmarket mechanisms or to adopt multi-faceted strategies to cope with risk. In this paper, we examine the possibility that parents obtain informal income insurance by letting their children work. We test this hypothesis by examining the relationship between household income shocks and human capital investment in children. In particular, we investigate whether children’s propensity to join school and to drop out of school responds to transient shocks. We also investigate issues such as gender and intrahousehold resource allocation.Stratégies de gestion des risques; Risk-coping strategies; Décision de scolarisation; Schooling decisions; Transitory shocks; Chocs transitoires;

The social impact of a WTO agreement in Indonesia

Indonesia experienced rapid growth and the expansion of the formal financial sector during the last quarter of the 20th century. Although this tendency was reversed by the shock of the financial crisis that spread throughout Asia in 1997 and 1998, macroeconomic stability has since then been restored, and poverty has been reduced to pre-crisis levels. Poverty reduction remains nevertheless a critical challenge for Indonesia with over 110 million people (53 percent of the population) living on less than $2 a day. The objective of this study is to help identify ways in which the Doha Development Agenda might contribute to further poverty reduction in Indonesia. To provide a good technical basis for answering this question, the authors use an approach that combines a computable general equilibrium (CGE) model with a microsimulation model. This framework is designed to capture important channels through which macroeconomic shocks affect household incomes. It allows making recommendations on specific trade reform options as well as on complementary development policy reforms. The framework presented in this study generates detailed poverty outcomes of trade shocks. Given the magnitude of the shocks examined here and the structural features of the Indonesian economy, only the full liberalization scenario generates significant poverty changes. The authors examine their impact under alternative specifications of the functioning of labor markets. These alternative assumptions generate different results, all of which confirm that the impact of full liberalization on poverty would be beneficial, with wage and employment gains dominating the adverse food price changes that could hurt the poorest households. Two alternative tax replacement schemes are examined. While direct tax replacement appears to be more desirable in terms of efficiency gains and translates into higher poverty reduction, political and practical considerations could lead the Government of Indonesia to choose a replacement scheme through the adjustment of value-added tax rates across nonexempt sectors.Rural Poverty Reduction,Economic Theory&Research,Poverty Assessment,Achieving Shared Growth,Inequality

The complementarity of MDG achievements : the case of child mortality in Sub-Saharan Africa

This paper analyzes complementarities between different Millennium Development Goals, focusing on child mortality and how it is influenced by progress in the other goals, in particular two goals related to the expansion of female education: universal primary education and gender equality in education. The authors provide evidence from eight Sub-Saharan African countries using two rounds of Demographic and Health Surveys per country and applying a consistent micro-econometric methodology. In contrast to the mixed findings of previous studies, for most countries the findings reveal strong complementarities between mothers’ educational achievement and child mortality. Mothers’ schooling lifts important demand-side constraints impeding the use of health services. Children of mothers with primary education are much more likely to receive vaccines, a crucial proximate determinant of child survival. In addition, better educated mothers tend to have longer birth intervals, which again increase the chances of child survival. For the variables related to the other goals, for example wealth proxies and access to safe drinking water, the analysis fails to detect significant effects on child mortality, a finding that may be related to data limitations. Finally, the study carries out a set of illustrative simulations to assess the prospects of achieving a reduction by two-thirds in the under-five mortality rate. The findings indicate that some countries, which have been successful in the past, seem to have used their policy space for fast progress in child mortality, for example by extending vaccination coverage. This is the main reason why future achievements will be more difficult and explains why the authors have a fairly pessimistic outlook.Population Policies,Health Monitoring&Evaluation,Early Child and Children's Health,Early Childhood Development,Adolescent Health

Reconciling household surveys and national accounts data using a cross entropy estimation method:

This paper presents an approach to reconciling household surveys and national accounts data that starts from the assumption that the macro data represent control totals to which the household data must be reconciled. The economic data gathered in the survey are also assumed to be accurate, or have been adjusted to be accurate. Given these assumptions, the problem is how to use the additional information provided by the national accounts data to re-estimate the household weights used in the survey so that the survey results are consistent with the aggregate data. The estimation approach represents an efficient “information processing rule” using an estimation criterion based on an entropy measure of information. The survey household weights are treated as a prior. New weights are estimated that are close to the prior using a cross-entropy metric and that are also consistent with the additional information. This approach is implemented to reconcile LSMS survey data and macro data for Madagascar. The results indicate that the approach is powerful and flexible, supporting the efficient use of information from a variety of sources to reconcile data at different levels of aggregation in a consistent framework.National income Accounting., Household surveys., Madagascar.,

Are female employment statistics more sensitive than male ones to questionnaire design ? Evidence from Cameroon, Mali and Senegal

This paper investigates the eect of several survey questionnaire characteristics on em- ployment statistics. It also assess the dierences in sensitivity to survey design across gender and living area. Indeed, as suggested in the literature, women, especially those living in rural areas, are expected to be more sensitive than men to survey design, due to both the nature of the work (seasonal, occasional, temporary, informal, unpaid family work) and social norms. In many African countries, labor force surveys are not available on a regular basis and the way existing household surveys and census measure employment diers greatly, both over time and between countries. This makes it dicult to properly study labor market dynamics and to draw meaningful policy recommendations. Using about fty surveys and censuses collected in Cameroon, Mali and Senegal between 1976 and 2012, we rst review the diver- sity of survey instruments used and highlight the key questionnaire characteristics that are likely to aect employment statistics. Exploiting within-survey variations of the wording of questions, the detail of the labor module and the length of the reference period, we then assess the eect of these features on labor statistics. Empirical results shows signi cant eects of each questionnaire feature and suggest that women are not systematically more sensitive than men to survey design, nor is it the case for rural individuals compared to urban ones

Etude sur la croissance partagée au Sénégal, 2001-2005

L'objet de cette étude est de dresser un bilan des performances économiques et sociales du Sénégal durant la première période de la présidence Wade (2001 à 2006). Plus particulièrement, on s'interroge sur l'efficacité de la stratégie de croissance accélérée (SCA) ‐ fortement défendue par les autorités sénégalaises‐ à lutter contre la pauvreté. Après un diagnostic sur les fondements de la croissance macro‐économique au Sénégal, cette étude examine les évolutions de l'emploi et de plusieurs indicateurs sociaux de développement. Nous montrons tout d'abord que les performances de croissance ont été bien en deçà des objectifs fixés par la SCA. Malgré la volonté des autorités à promouvoir l'investissement privé, les changements structurels des fondements de la croissance macroéconomique souhaités ne sont pas observés et la croissance reste fortement tributaire des fonds publics et, partant, de l'aide internationale, comme durant la période post‐dévaluation (1994‐2001). Ensuite, l'étude montre que les secteurs cibles de la SCA ne participent qu'assez marginalement à la création d'emplois de ces dernières années. Par contre, en matière de développement social (mesuré par les raccordements à l'eau, l'électricité et la scolarisation des enfants), on note des augmentations assez importantes des niveaux moyens à l'échelle nationale. Ces progrès sont à mettre au compte des politiques de développement social soutenues par le document stratégique de lutte contre la pauvreté (DSRP). Cependant, les améliorations des indicateurs sociaux des ménages pauvres comme des classes moyennes, notamment en milieu rural, bien que réelles ne permettent pas une réduction significative du dualisme ville/campagne

Land reform in Zimbabwe

There is widespread agreement on the need for land reform in Zimbabwe as a means of reducing poverty. This paper assesses the potential consequences of a land-reform scheme that draws on proposals from Zimbabwe's government in 1998 and 1999. The authors analyze the impact of the reform on resettled farm households and as a development project for which they conduct cost-benefit analysis. The analysis, which considers costs and benefits during a 15-year period, relies on a set of models of family farms that are typical of those that would benefit from land redistribution. The cost-benefit analysis is more comprehensive, also considering the different costs and benefits that affect the government. The results of the analysis indicate that a government-supported land reform could be economically viable under what the authors consider as realistic assumptions regarding the performance of the beneficiaries and the costs that will be faced by the government and other stakeholders. Land reform can generate sustainable livelihoods for the beneficiaries. If viewed as a project, the NPV of the reform is positive for a discount rate that is as high as 20%. The project can also increase employment in the agricultural sector. The analysis takes a long-run perspective, covering a 15-year period. During the first resettlement years, some disruption of agricultural production should be expected. These results are preliminary and based on a partial equilibrium perspective. They are driven by the assumption that the land reform is carried out in a manner that allows farmers on the resettled lands to achieve their productive potential. Such an outcome depends critically on the assumption that the farmers are able to operate in an enabling environment, including critical government support, especially during years 1-5.TMD ,Land capability for agriculture. ,Land use Zimbabwe. ,Land use Economic aspects. ,Rate of return. ,Sustainable livelihoods. ,Poverty alleviation Zimbabwe. ,Agriculture and state. ,Farm income. ,Government spending policy. ,Agricultural productivity. ,