Publication: Children and the Fiscal Space in Ethiopia
Loading...
Date
2023-05-24
ISSN
Published
2023-05-24
Editor(s)
Abstract
This study investigates the effects of public transfers and taxes on the wellbeing of children in Ethiopia. It applies the Commitment to Equity for Children methodology to examine the burdens of taxation and the benefits from government transfers and spending, and their differential wellbeing impacts on children. The study integrates data from the 2018/19 Ethiopia Socioeconomic Survey, which also collected data on taxes and transfers, with administrative data. Measuring its distribution by child monetary and multidimensional wellbeing, the study finds, on average, a progressive, poverty-reducing and equalizing fiscal system. However, there are important differences in the distribution of some of its elements. Indirect taxes, comprising of value-added and excise taxes, are regressive. Similarly, primary education spending, the largest of in-kind transfers, is only progressive in urban areas. On poverty and inequality, the fiscal system reduced the monetary child poverty headcount by 21 percent and the poverty gap by 33 percent. The effect is stronger for girls and children in rural areas than for boys and children in urban areas, therefore reducing inequalities in poverty rates. However, this is only the case when in-kind transfers for education and health are considered. Without the inclusion of in-kind transfers, the study finds that the fiscal system is not well calibrated to reduce poverty. This highlights the essential role of public services, not only in delivering fundamental child rights, but also in reducing poverty among children.
Link to Data Set
Citation
“Ambel, Alemayehu A.; Belete, Getachew Yirga; Fiala, Oliver. 2023. Children and the Fiscal Space in Ethiopia. Policy Research Working Papers; 10452. © World Bank. http://hdl.handle.net/10986/39838 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Does Fiscal Policy Have a Role in Improving Child Well-Being in Ethiopia?(Washington, DC: World Bank, 2024-04-01)Taxes, government spending, and public transfers affect the well-being of children and adults, albeit in different ways. There is, however, a dearth of empirical evidence on the impact of these policies on the well-being of children in low-income countries. This policy brief summarizes a recent study by Ambel, Belete, and Fiala (2024), which investigates the effects of fiscal actions on poverty and inequality among children in Ethiopia. The study applies the Commitment to Equity for Children (CEQ4C) methodology on survey data integrated with administrative data. It finds that the fiscal system in Ethiopia is progressive, poverty-reducing, and equalizing for children. However, there are observed differences in the effects of some of the fiscal policy components, as many of these effects are stronger for girls and children in rural areas. The study also highlights the essential role of public services in improving children’s well-being.Publication A Gendered Fiscal Incidence Analysis for Ethiopia(World Bank, Washington, DC, 2022-07)Using the Commitment to Equity methodology, this study investigates differences in the welfare impact of taxes and government spending on men and women in Ethiopia. It analyzes the incidence, progressivity, and pro-poorness of various taxes and transfers and their effects on income mobility, poverty, and inequality using individual-level data from the 2018/19 Ethiopia Socioeconomic Survey. The results show that the fiscal system as a whole is progressive, equalizing, and poverty-reducing. It moved about one in five individuals from one income group to another, and more women than men transitioned to a higher income group, making them relatively better off. However, some of its elements have differential effects on gender equality. Direct and indirect taxes have differential inequality-reducing and poverty-increasing effects for men and women. The inequality-reducing effects are stronger for men, whereas the poverty-increasing effects of some of them, including informal taxes and value-added taxes, are higher for women. On the transfer side, direct social protection transfers and indirect transfers, mainly spending on primary education and health services, promote gender equality better than other types of government spending.Publication Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia(World Bank, Washington, DC, 2015-12)Donors increasingly fund interventions to counteract inequality in developing countries, where they fear it can foment instability and undermine nation-building efforts. To succeed, aid relies on the principle of upward accountability to donors. But federalism shifts the accountability of subnational officials downward to regional and local voters. What happens when aid agencies fund anti-inequality programs in federal countries? Does federalism undermine aid? Does aid undermine federalism? Or can the political and fiscal relations that define a federal system resolve the contradiction internally? This study explores this paradox via the Promotion of Basic Services program in Ethiopia, the largest donor-financed investment program in the world. Using an original panel database comprising the universe of Ethiopian woredas (districts), the study finds that horizontal (geographic) inequality decreased substantially. Donor-financed block grants to woredas increased the availability of primary education and health care services in the bottom 20 percent of woredas. Weaker evidence from household surveys suggests that vertical inequality across wealth groups (within woredas) also declined, implying that individuals from the poorest households benefit disproportionately from increasing access to and utilization of such services. The evidence suggests that by combining strong upward accountability over public investment with extensive citizen engagement on local issues, Ethiopia’s federal system resolves the instrumental dissonance posed by aid-funded programs to combat inequality in a federation.Publication Multidimensional Poverty in Ethiopia(World Bank, Washington, DC, 2015-09)This paper presents trends in monetary and nonmonetary dimensions of wellbeing in Ethiopia using data from the Household Consumption and Expenditure and Welfare Monitoring surveys implemented in 2000, 2005, and 2011. The paper provides evidence on changes in overlapping deprivations using a non-index approach to multidimensional poverty. It assesses the performance of various dimensions in education, health, and living standards, taking one indicator at a time. It then examines the overlap between different dimensions of poverty and examines how this has changed over time in Ethiopia and across rural and urban areas. It highlights that although Ethiopia’s multidimensional poverty index is very high, there have been improvements in overlapping deprivations and, as a result, the number of individuals deprived in multiple dimensions has fallen.Publication Maternal and Child Health Inequalities in Ethiopia(World Bank, Washington, DC, 2015-12)Recent surveys show considerable progress in maternal and child health in Ethiopia. The improvement has been in health outcomes and health services coverage. The study examines how different groups have fared in this progress. It tracked 11 health outcome indicators and health interventions related to Millennium Development Goals 1, 4, and 5. These are stunting, underweight, wasting, neonatal mortality, infant mortality, under-five mortality, measles vaccination, full immunization, modern contraceptive use by currently married women, antenatal care visits, and skilled birth attendance. The study explores trends in inequalities by household wealth status, mothers’ education, and place of residence. It is based on four Demographic and Health Surveys implemented in 2000, 2005, 2011, and 2014. Trends in rate differences and rate ratios are analyzed. The study also investigates the dynamics of inequalities, using concentration curves for different years. In addition, a decomposition analysis is conducted to identify the role of proximate determinants. The study finds substantial improvements in health outcomes and health services. Although there still exists a considerable gap between the rich and the poor, the study finds some reductions in inequalities of health services. However, some of the improvements in selected health outcomes appear to be pro-rich.
Users also downloaded
Showing related downloaded files
Publication Education, Social Norms, and the Marriage Penalty(Washington, DC: World Bank, 2024-10-16)A growing literature attributes gender inequality in labor market outcomes in part to the reduction in female labor supply after childbirth, the child penalty. However, if social norms constrain married women’s activities outside the home, then marriage can independently reduce employment, even in the absence childbearing. Given the correlation in timing between childbirth and marriage, conventional estimates of child penalties will conflate these two effects. The paper studies the marriage penalty in South Asia, a context featuring conservative gender norms and low female labor force participation. The study introduces a split-sample, pseudo-panel approach that allows for the separation of marriage and child penalties even in the absence of individual-level panel data. Marriage reduces women’s labor force participation in South Asia by 12 percentage points, whereas the marginal penalty of childbearing is small. Consistent with the central roles of both opportunity costs and social norms, the marriage penalty is smaller among cohorts with higher education and less conservative gender attitudes.Publication Media and Messages for Nutrition and Health(World Bank, Washington, DC, 2020-06)The Lao People’s Democratic Republic (Lao PDR) has experienced rapid and significant economic growth over the past decade. However, poor nutritional outcomes remain a concern. Rates of childhood undernutrition are particularly high in remote, rural, and upland areas. Media have the potential to play an important role in shaping health and nutrition–related behaviors and practices as well as in promoting sociocultural and economic development that might contribute to improved nutritional outcomes. This report presents the results of a media audit (MA) that was conducted to inform the development and production of mass media advocacy and communication strategies and materials with a focus on maternal and child health and nutrition that would reach the most people from the poorest communities in northern Lao PDR. Making more people aware of useful information, essential services and products and influencing them to use these effectively is the ultimate goal of mass media campaigns, and the MA measures the potential effectiveness of media efforts to reach this goal. The effectiveness of communication channels to deliver health and nutrition messages to target beneficiaries to ensure maximum reach and uptake can be viewed in terms of preferences, satisfaction, and trust. Overall, the four most accessed media channels for receiving information among communities in the study areas were village announcements, mobile phones, television, and out-of-home (OOH) media. Of the accessed media channels, the top three most preferred channels were village announcements (40 percent), television (26 percent), and mobile phones (19 percent). In terms of trust, village announcements were the most trusted source of information (64 percent), followed by mobile phones (14 percent) and television (11 percent). Hence of all the media channels, village announcements are the most preferred, have the most satisfied users, and are the most trusted source of information in study communities from four provinces in Lao PDR with some of the highest burden of childhood undernutrition.Publication Economic Recovery(World Bank, Washington, DC, 2021-04-06)World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. He highlighted vaccines, working closely with Gavi, WHO, and UNICEF, the World Bank has conducted over one hundred capacity assessments, many even more before vaccines were available. The World Bank Group worked to achieve a debt service suspension initiative and increased transparency in debt contracts at developing countries. The World Bank Group is finalizing a new climate change action plan, which includes a big step up in financing, building on their record climate financing over the past two years. He noted big challenges to bring all together to achieve GRID: green, resilient, and inclusive development. Janet Yellen, U.S. Secretary of the Treasury, mentioned focusing on vulnerable people during the pandemic. Kristalina Georgieva, Managing Director of the International Monetary Fund, focused on giving everyone a fair shot during a sustainable recovery. All three commented on the importance of tackling climate change.Publication Global Regulations, Institutional Development, and Market Authorities Perspective Toolkit (GRIDMAP) - Framework and Methodology(Washington, DC: World Bank, 2024-12-05)GRIDMAP--the Global Regulations, Institutional Development, and Market Authorities Perspective Toolkit--provides emerging markets and developing economies (EMDEs) with a “Minimum Package” of policies to build markets that are trustworthy, safe, and competitive. The “Minimum Package” sets out essential regulatory provisions, institutional arrangements, and implementation and enforcement needed for those markets to thrive. GRIDMAP will provide modules focused on various subjects of market regulation, such as consumer protection and data markets.Publication Remarks at the United Nations Biodiversity Conference(World Bank, Washington, DC, 2021-10-12)World Bank Group President David Malpass discussed biodiversity and climate change being closely interlinked, with terrestrial and marine ecosystems serving as critically important carbon sinks. At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.