The Pacific Observatory Insights from High Frequency Phone Surveys in Tonga Q2 2023 – Q4 2023 The Pacific Observatory is a World Bank initiative to increase data availability and quality and to promote evidence-based policymaking. The development objective of the Pacific Observatory is… The Pacific To improve welfare for the poor and vulnerable in Papua Key findings New Guinea and the Pacific Island Countries through expanding socio-economic information for better data-driven Observatory in policymaking. Tonga This presentation uses data from the Pacific Observatory’s high frequency phone surveys in Tonga… To detail socio-economic indicators related to: - Employment and incomes - Food insecurity and social protection - Health care access and education The survey has been collected from 400+ respondents each month since April 2023 (see Annex for the methodology). Employment and Incomes Employment levels have been dropping since Q2. While this drop was more prominent among the wealthier groups and urban households in Q3, employment decreased for all in Q4. Expectations about the household finances and the economy as a whole have worsened in Q4. Key findings Food insecurity and Social Assistance Although food security improved across the country, some urban areas saw worsening conditions in Q4. Health and Education Healthcare was accessible to all groups nationally. School attendance has stabilized since Q2. Employment levels have been falling since Q2 Employment Household incomes are largely stable and incomes Expectations about the future of the economy and of the household finances have deteriorated from Q3 to Q4 Proportion of adults working Proportion of adults working by urban/rural 60% 60% 59% 55% 54% 55% 50% 49% 46% 45% 50% 40% 48% 46% 35% 45% Q2 2023 Q3 2023 Q4 2023 Q2 2023 Q3 2023 Q4 2023 National Tongatapu Vava'u/Ongo Niua Ha'apai/Eua National Urban Rural Source: World Bank high-frequency phone surveys April – December 2023. Source: World Bank high-frequency phone surveys April – December 2023. The proportion of adults working The drop was sharper among has been falling since Q2, urban households, with the most drastic drop in Ha’apai and with no significant difference among Eua provinces. the wealth groups. Employment was down nine Proportion of adults working percentage points since April 60% 55% 53% 55% 52% 51% 50% The employment trend may in part 50% 48% 48% reflect seasonality. A longer time- 46% series data is required to assess 45% 44% whether this is a secular decline. 40% Apr '23 May '23 Jun '23 Jul '23 Aug '23 Sept '23 Oct '23 Nov '23 Dec '23 Note: Error bars indicate 95% Confidence Intervals. Source: World Bank high-frequency phone surveys April – December 2023. The downward employment trend was mainly driven by moveouts out of informal and agricultural jobs in Tongatapu. % of all adults in formal and informal sectors % of all adults employed in industry/services sector % of all adults employed in agriculture sector 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 10% 10% 0% 0% 0% Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Informal Workers Formal Workers Tongatapu Vava'u/Ongo Niua Ha'apai/Eua Tongatapu Vava'u/Ongo Niua Ha'apai/Eua Source: April - September 2023 World Bank high-frequency phone survey. Total household income last month compared to average month (% households) 72% 74% 73% Incomes Household Incomes are stable 14% 13% 10% 14% 13% 16% Total household incomes are stable from month to Higher About the same Less/No income month. Q2 2023 Q3 2023 Q4 2023 Income sources (% households) Wage employment 83% 85% Income sources 85% 76% Farming/fishing/livestock 72% 83% Wage is the main source of income for most households. 76% Remittances from abroad 80% 70% Assistance from the Government 33% 50% 70 to 80% of households received remittances each 36% Non-farm business 34% 31% quarter. 35% 29% Assistance from family within Tonga 35% 27% 26% Assistance from NGOs/charitable organizations 22% 21% 15% Assistance from non-family within Tonga 14% 20% 4% Properties/investments/savings 2% 4% 4% Pension 1% 1% Q2 2023 Q3 2023 Q4 2023 Source: World Bank high-frequency phone surveys April – December 2023. Farming Income from last month compared to average Wage Income from last month compared to average month month 6% 6% 6% 5% 13% 37% 51% 76% Higher About the same Less/No income Don't Know Higher About the same Less/No income Don't Know Source: Oct-Dec 2023 World Bank high frequency phone survey. Source: Oct-Dec 2023 World Bank high frequency phone survey. Farming income fell for even while wage incomes continue more households in Q4 (37%) than in Q3 (24%), to be stable. Proportion of households that is worried about their finances over the next month Expectations about finances National Almost half the households are worried about their Rural finances in the upcoming month. Urban Top 20% Wealthier and/or urban households have drastically 4th Quint changed expectations about their finances from Q3 to Q4, becoming more worried about their finances. 3rd Quint 2nd Quint Bottom 20% 0% 10% 20% 30% 40% 50% 60% Q2 2023 Q3 2023 Q4 2023 Source: World Bank high-frequency phone surveys April – December 2023. Outlook on economy Outlook on economy (% households) 49% The proportion of households feeling worse about the 43% 42% 45% future of the economy has gone up in Q2 from 40% to 40% 37% 35% 33% 37% 40% 37% 45%. 32% 32% 31% 30% 29% 26% 27% 23% 25% 26% 26% 23% 22% 21% Q2 2023 Q3 2023 Q4 2023 Q2 2023 Q3 2023 Q4 2023 Q2 2023 Q3 2023 Q4 2023 Better Same Worse Urban Rural National Source: World Bank high-frequency phone surveys April – December 2023. Around 5% of the population faced severe food insecurity in Q4 2023. Food security With the high inflation persisting, food security deteriorated for the poorest group. But urban households became more food insecure in Q4 compared to Q3 Severe food insecurity is on the rise for the poorest group. Severe Food Insecurity (% population) 11.6% 11% 10.2% 9.6% 9.4% 9.5% 8.7% 8.4% 7.6% 7.5% 7.3% 6.9% 6.3% 6.0% 5.7% 5.9% 5.7% 5.5% 5% 5.2% 5.2% 5% 5.1% 4.6% 5% 4.4% 4% 3.9% 4.1% 4% 4% 3% 2.6% 1.9% 1% 1.0% National Tongatapu Ha'apai and Eua Vava'u and Ongo Bottom 20 2nd quintile 3rd quintile 4th quintile Top 20 Niua Island group Wealth group July August 2022 April-June 2023 July-September 2023 October-December 2023 Source: World Bank high-frequency phone surveys April – December 2023. Note: Food insecurity is measured based on the Food Insecurity Experience Scale (FIES) method, established by the FAO. Severe food insecurity implies a high probability of reduced food intake and therefore can lead to more severe forms of undernutrition, including hunger. Unlike the previous quarter, food security has deteriorated for urban households from Q3 to Q4. Food Insecurity, % of urban households Food Insecurity, % of rural households Ate only few kinds of food Ate only few kinds of food Unable to eat healthy food Unable to eat healthy food Worried about not enough food Worried about not enough food Ate less Ate less Skipped a meal Skipped a meal Hungry but did not eat Hungry but did not eat Ran out of food Ran out of food Did not eat a whole day Did not eat a whole day 0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% 60% Q2 2023 Q3 2023 Q4 2023 Q2 2023 Q3 2023 Q4 2023 Source: World Bank high-frequency phone surveys April – December 2023. Source: World Bank high-frequency phone surveys April – December 2023. Receiving medical care in rural areas recovered from Q3 to Q4 Health and Education School attendance rates stabilized nationally Satisfaction rates with education quality remained high Receiving medical care in Care received among those who sought (% households) rural areas recovered to NATIONAL 90% 87% Q2 levels in Q4. 95% 88% Nearly 100% of those who needed TONGATAPU 90% care sought it nationally in all areas 95% and among all wealth groups. 95% VAVA'U/ONGO NIUA 82% Medical care received among those 91% who sought it recovered in rural areas from Q3 to Q4. 95% HA'APAI/EUA 81% 100% Q2 2023 Q3 2023 Q4 2023 Source: World Bank high-frequency phone surveys April – December 2023. School attendance stabilized nationally but some provinces still suffer from high school absence rates in Q4. School Absence (% children) 0% 5% 10% 15% 20% 25% 30% 35% 26% NATIONAL 18% 19% 28% TONGATAPU 18% 19% RESIDENCE 21% VAVA'U/ONGO NIUA 15% 29% 23% HA'APAI/EUA 23% 11% 29% BOTTOM 20% 21% 16% 27% Q2 17% WEALTH GROUP 19% 21% Q3 20% 32% 31% Q4 11% 10% 24% TOP 20% 20% 20% Q2 2023 Q3 2023 Q4 2023 Source: World Bank high-frequency phone surveys April–December2023. Note: School absence indicates if the student has been absent from school for the past 12 months. Overall satisfaction with the education system remains high in Q4 but the population is still most divided about the affordability of education. Education system satisfaction (% respondents) Qualified Teachers Qualified Leaders Adequate teaching material School conditions Affordable Costs Completely disagree Disagree Neither agree nor disagree Agree Completely Agree Source: World Bank high-frequency phone surveys October – December 2023. Acknowledgments and further information Core Team: Elene Metreveli, Shohei Nakamura* Extended team: Ritika Khandelwal, Darian Naidoo Task Team Leaders: William Seitz and David Gould Practice Manager: Rinku Murgai *For inquiries, please contact Shohei Nakamura (snakamaura2@worldbank.org) and William Seitz (wseitz@worldbank.org). The team gratefully acknowledges the Australian Department of Foreign Affairs and Trade for providing financial support for the data collection and analysis. Annex: survey methods The Q4 data for Tonga HFPS continuous surveys was Number of interviewed households collected from 1,257 households via phone by location interviews between October and December 2023. The implementation was led by Sistemas Integrales Comparison of wealth distributions in HFPS and MICS in collaboration with Tonga Statistics Department. # of HHs 16% 14% Tongatapu 1,020 12% The sample was drawn from new households based % of households 10% Vava’u 123 on Random Digit Dialing (RDD) method covering all 8% Ha’apai 54 6% the cell phones in the country. 4% Eua 49 2% The sample is weighted to adjust for population Ongo Niua 7 0% 1 2 3 4 5 6 7 8 9 10 distributions across locations and other socio- Total 1,257 Decile based on MICS economic characteristics. HFPS (unweighted) HFPS (weighted) MICS The wealth distribution in the HFPS is overall similar to that in the Tonga Multiple Indicator Cluster Survey (MICS) 2019.