Publication: Children and the Fiscal Space in Ethiopia
Date
2023-05-24
ISSN
Published
2023-05-24
Author(s)
Ambel, Alemayehu A.
Belete, Getachew Yirga
Fiala, Oliver
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.
Citation
“Ambel, Alemayehu A.; Belete, Getachew Yirga; Fiala, Oliver. 2023. Children and the Fiscal Space in Ethiopia. Policy Research Working Papers; 10452. © World Bank, Washington, DC. http://hdl.handle.net/10986/39838 License: CC BY 3.0 IGO.”