C. Breisinger, Yumna Kassim, Sikandra Kurdi, J. Randriamamonjy, J. Thurlow
Food is a vital part of poor households' budgets and so subsidizing staple foods would appear to be an obvious pro-poor policy. Indeed, most countries in North Africa have prioritized large national subsidy programs for staple foods and fuels as their main social safety net. However, these programs account for significant shares of government spending and often drive fiscal deficits, especially when import prices rise. In this paper we use a dynamic Computable General Equilibrium model to evaluate the trade-offs between reducing poverty and managing fiscal balances. The modeling framework allows us to measure the efficiency costs of subsidies compared to cash transfers - switching to the latter is an emerging regional trend. We analyze these issues through a detailed case study of Egypt, where efforts to replace food subsidies with cash transfers is already underway. Data is also available in Egypt to design scenarios that realistically reflect potential targeting effectiveness and administrative costs. We show that replacing broad food subsidies with targeted cash transfers of roughly equivalent fiscal costs can improve the welfare of the poorest households, but the continuation of fiscal deficits results in a deceleration of economic growth. The latter gradually reduces welfare gains for the poor and leads to substantial welfare losses for middle-income households who lose access to subsidies without benefitting from cash transfers. Our findings highlight the political challenges facing subsidy reform programs.
{"title":"From Food Subsidies to Cash Transfers: Assessing Economy-Wide Benefits and Trade-Offs in Egypt","authors":"C. Breisinger, Yumna Kassim, Sikandra Kurdi, J. Randriamamonjy, J. Thurlow","doi":"10.1093/jae/ejad006","DOIUrl":"https://doi.org/10.1093/jae/ejad006","url":null,"abstract":"\u0000 Food is a vital part of poor households' budgets and so subsidizing staple foods would appear to be an obvious pro-poor policy. Indeed, most countries in North Africa have prioritized large national subsidy programs for staple foods and fuels as their main social safety net. However, these programs account for significant shares of government spending and often drive fiscal deficits, especially when import prices rise. In this paper we use a dynamic Computable General Equilibrium model to evaluate the trade-offs between reducing poverty and managing fiscal balances. The modeling framework allows us to measure the efficiency costs of subsidies compared to cash transfers - switching to the latter is an emerging regional trend. We analyze these issues through a detailed case study of Egypt, where efforts to replace food subsidies with cash transfers is already underway. Data is also available in Egypt to design scenarios that realistically reflect potential targeting effectiveness and administrative costs. We show that replacing broad food subsidies with targeted cash transfers of roughly equivalent fiscal costs can improve the welfare of the poorest households, but the continuation of fiscal deficits results in a deceleration of economic growth. The latter gradually reduces welfare gains for the poor and leads to substantial welfare losses for middle-income households who lose access to subsidies without benefitting from cash transfers. Our findings highlight the political challenges facing subsidy reform programs.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"1 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"60898756","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study contributes to the literature on the identification of factors shaping the decision to participate in the grain market in Africa. Unlike previous studies, we introduce labor market participation into the farm household model to highlight heterogeneities in decision making. Empirically, we rely on an extension of Heckman's approach and introduce control functions to mitigate endogeneity issues related to the adoption of agricultural technologies. We find that limited access to transportation infrastructure, by discouraging the supply of grain, constrains households to experience an excess of labor; price incentives may have a reverse effect on the choice of market regimes, even though the effect on production may be positive for households that are already participants. We also show that farmers' responses to grain prices are not sensitive to their labor market position. The use of agricultural technologies encourages cereal production and employment of external agricultural labor. This study thus provides a better targeting when designing policies promoting marketing and rural employment.
{"title":"A Crossed Analysis of Participations in Labor and Grain Markets: Evidence from Malawi","authors":"Alhassane Camara, L. Savard","doi":"10.1093/jae/ejad007","DOIUrl":"https://doi.org/10.1093/jae/ejad007","url":null,"abstract":"\u0000 This study contributes to the literature on the identification of factors shaping the decision to participate in the grain market in Africa. Unlike previous studies, we introduce labor market participation into the farm household model to highlight heterogeneities in decision making. Empirically, we rely on an extension of Heckman's approach and introduce control functions to mitigate endogeneity issues related to the adoption of agricultural technologies. We find that limited access to transportation infrastructure, by discouraging the supply of grain, constrains households to experience an excess of labor; price incentives may have a reverse effect on the choice of market regimes, even though the effect on production may be positive for households that are already participants. We also show that farmers' responses to grain prices are not sensitive to their labor market position. The use of agricultural technologies encourages cereal production and employment of external agricultural labor. This study thus provides a better targeting when designing policies promoting marketing and rural employment.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"1 1","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41776643","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Economic development in Sub Saharan African countries is strongly tied to households' ability to cope with exogenous events affecting their well-being. Using data from the Lesotho Child Grant Program (CGP) we provide evidence on the presence of any spillover effect of the program on non-eligible households living in treated villages and whether households' food security and nutrition are influenced by the presence of a particular network structure. We take advantage of information on each household's received and disbursed monetary transfers to build a set of indicators representing quantitatively and qualitatively the network architecture of each household. We find relevant spillover effects of the CGP on the food security and nutrition of non-eligible households living in treated villages and embedded in a social network. Geographical proximity seems to be strongly tied to positive spillover effects for food security and access to food.
{"title":"Feed Thy Neighbour: How Social Ties Shape Spillover Effects of Cash Transfers on Food Security and Nutrition","authors":"Alessandro Carraro, Lucia Ferrone","doi":"10.1093/jae/ejad004","DOIUrl":"https://doi.org/10.1093/jae/ejad004","url":null,"abstract":"Abstract Economic development in Sub Saharan African countries is strongly tied to households' ability to cope with exogenous events affecting their well-being. Using data from the Lesotho Child Grant Program (CGP) we provide evidence on the presence of any spillover effect of the program on non-eligible households living in treated villages and whether households' food security and nutrition are influenced by the presence of a particular network structure. We take advantage of information on each household's received and disbursed monetary transfers to build a set of indicators representing quantitatively and qualitatively the network architecture of each household. We find relevant spillover effects of the CGP on the food security and nutrition of non-eligible households living in treated villages and embedded in a social network. Geographical proximity seems to be strongly tied to positive spillover effects for food security and access to food.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"92 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136085519","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The external deficits in SSA countries are a major concern and may be connected to emigration from these countries to advanced economies. According to the life cycle theory, by decreasing labour force, emigration induces a fall in savings and a deterioration in the external balance in the countries of origin. Migrants' remittances may dampen or even counterbalance this effect, depending on migrants' skills that matter for their propensity to remit. Empirical investigation for SSA countries over the period 1990–2014 shows that low-skilled emigration improves the current account balance, whereas high-skilled emigration worsens it because highly skilled emigrants have higher saving potential but tend to remit less than low-skilled ones. Therefore, incentives for the financing of home economies by skilled migrants would be beneficial.
{"title":"Emigration and External Imbalances in Sub-Saharan Africa: Do Migrants' Skills Matter?","authors":"D. Coulibaly, Blaise Gnimassoun","doi":"10.1093/jae/ejad008","DOIUrl":"https://doi.org/10.1093/jae/ejad008","url":null,"abstract":"\u0000 The external deficits in SSA countries are a major concern and may be connected to emigration from these countries to advanced economies. According to the life cycle theory, by decreasing labour force, emigration induces a fall in savings and a deterioration in the external balance in the countries of origin. Migrants' remittances may dampen or even counterbalance this effect, depending on migrants' skills that matter for their propensity to remit. Empirical investigation for SSA countries over the period 1990–2014 shows that low-skilled emigration improves the current account balance, whereas high-skilled emigration worsens it because highly skilled emigrants have higher saving potential but tend to remit less than low-skilled ones. Therefore, incentives for the financing of home economies by skilled migrants would be beneficial.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48510762","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Zaakhir Asmal, Haroon Bhorat, Ravi Kanbur, Marco Ranzani, Pierella Paci
Abstract This paper investigates the effect of multiple minimum wages, known as remuneration orders, on employment and working hours in Mauritius. Using data between 2005 and 2014, the analysis finds no effect on overall employment and different effects in sign for men and women. The minimum wage has a positive long-term effect on women's employment (0.141) and a negative effect on male employment (−0.097). The estimated employment elasticity magnitudes for men and women are within the range of elasticities found in previous studies of employment effects of minimum wages in low- and middle-income countries. The aggregate employment effect of the minimum wage in Mauritius is not significant, due to the larger share of men who are employed. The extensive margin effect of minimum wages is also associated with a 2.2% increase in average working hours for men but a 1.3% decline in average working hours for women in the covered sector. In the uncovered sector, the significant positive effect along the intensive margin, estimated at 4.6%, is driven by changes in labour supply among men.
{"title":"Minimum Wages and Labour Supply in an Emerging Market: The Case of Mauritius","authors":"Zaakhir Asmal, Haroon Bhorat, Ravi Kanbur, Marco Ranzani, Pierella Paci","doi":"10.1093/jae/ejad005","DOIUrl":"https://doi.org/10.1093/jae/ejad005","url":null,"abstract":"Abstract This paper investigates the effect of multiple minimum wages, known as remuneration orders, on employment and working hours in Mauritius. Using data between 2005 and 2014, the analysis finds no effect on overall employment and different effects in sign for men and women. The minimum wage has a positive long-term effect on women's employment (0.141) and a negative effect on male employment (−0.097). The estimated employment elasticity magnitudes for men and women are within the range of elasticities found in previous studies of employment effects of minimum wages in low- and middle-income countries. The aggregate employment effect of the minimum wage in Mauritius is not significant, due to the larger share of men who are employed. The extensive margin effect of minimum wages is also associated with a 2.2% increase in average working hours for men but a 1.3% decline in average working hours for women in the covered sector. In the uncovered sector, the significant positive effect along the intensive margin, estimated at 4.6%, is driven by changes in labour supply among men.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"165 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135116150","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract A forward-looking measure of ‘vulnerability to poverty’ is estimated and a concerted effort is made to understand the sources of vulnerability in the drought-prone lowlands of Ethiopia. Using the Household Consumption Expenditure Survey and the Welfare Monitoring Survey of 2015–16, which include additional zones in the Afar and Somali regions increasing the representativeness of the survey in pastoral areas, the analysis reveals that vulnerability is remarkably higher in the drought-prone lowlands than in the other ecological zones, even though differences in poverty rates are modest. The analysis also reveals important distinctions in the sources of vulnerability. In the drought-prone lowlands, (i) the prevalence of both poverty-induced and risk-induced vulnerability is the highest among all the ecological zones and (ii) the importance of vulnerability due to aggregate shocks, such as droughts, relative to vulnerability due to idiosyncratic shocks is higher than in the other ecological zones. These findings attest to the unique nature of the drought-prone lowlands in comparison to the other agroecological zones of Ethiopia and the need for adaptive social protection programmes targeting not only the chronically poor but also the vulnerable.
{"title":"Quantifying Vulnerability to Poverty in the Drought-prone Lowlands of Ethiopia","authors":"Emmanuel Skoufias, Katja Vinha, Berhe Mekonnen Beyene","doi":"10.1093/jae/ejad003","DOIUrl":"https://doi.org/10.1093/jae/ejad003","url":null,"abstract":"Abstract A forward-looking measure of ‘vulnerability to poverty’ is estimated and a concerted effort is made to understand the sources of vulnerability in the drought-prone lowlands of Ethiopia. Using the Household Consumption Expenditure Survey and the Welfare Monitoring Survey of 2015–16, which include additional zones in the Afar and Somali regions increasing the representativeness of the survey in pastoral areas, the analysis reveals that vulnerability is remarkably higher in the drought-prone lowlands than in the other ecological zones, even though differences in poverty rates are modest. The analysis also reveals important distinctions in the sources of vulnerability. In the drought-prone lowlands, (i) the prevalence of both poverty-induced and risk-induced vulnerability is the highest among all the ecological zones and (ii) the importance of vulnerability due to aggregate shocks, such as droughts, relative to vulnerability due to idiosyncratic shocks is higher than in the other ecological zones. These findings attest to the unique nature of the drought-prone lowlands in comparison to the other agroecological zones of Ethiopia and the need for adaptive social protection programmes targeting not only the chronically poor but also the vulnerable.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136187795","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Poverty, Inequality and Social Protection Programs in Africa: Lessons from the COVID-19 Pandemic","authors":"D. Ngui, N. Ndung’u, A. Shimeles","doi":"10.1093/jae/ejac038","DOIUrl":"https://doi.org/10.1093/jae/ejac038","url":null,"abstract":"","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49216566","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines how inequality could be tackled through structural transformation using unit record data from the Demographic and Health Surveys (DHS) for Africa. Results suggest inequality between countries tends to be higher when the share of labour employed or value-added in the agriculture sector is higher, while no association is observed for industry and services sectors contributions to GDP or employment. Within-country inequality however tends to be strongly affected by structural change. A 1 standard deviation growth in the movement of labour from low- to high-productivity sectors could decrease overall inequality by 0.5% and inequality of opportunity by 1.1%. Results from other data sources strongly support these findings suggesting that positive structural transformation could lead to sustained reduction in inequality in Africa. Other factors correlated strongly with inequality reduction include human capital, which tend to have large and significant income or asset reducing effect in Africa, particularly at higher level of education, while the pace of urbanisation exacerbates it incidence.
{"title":"Structural Change and Inequality in Africa","authors":"Hanan Morsy, A. Shimeles, Tiguéné Nabassaga","doi":"10.1093/jae/ejac050","DOIUrl":"https://doi.org/10.1093/jae/ejac050","url":null,"abstract":"\u0000 This paper examines how inequality could be tackled through structural transformation using unit record data from the Demographic and Health Surveys (DHS) for Africa. Results suggest inequality between countries tends to be higher when the share of labour employed or value-added in the agriculture sector is higher, while no association is observed for industry and services sectors contributions to GDP or employment. Within-country inequality however tends to be strongly affected by structural change. A 1 standard deviation growth in the movement of labour from low- to high-productivity sectors could decrease overall inequality by 0.5% and inequality of opportunity by 1.1%. Results from other data sources strongly support these findings suggesting that positive structural transformation could lead to sustained reduction in inequality in Africa. Other factors correlated strongly with inequality reduction include human capital, which tend to have large and significant income or asset reducing effect in Africa, particularly at higher level of education, while the pace of urbanisation exacerbates it incidence.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47407268","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
M. Niño-Zarazúa, Francesca Scaturro, V. Jordá, F. Tarp
A strand of the political economy literature emphasizes the effect of income inequality on growth and poverty, which materialises through redistribution. The theoretical expectation postulated by standard economic theory is that high inequality would lead to higher redistribution via the collective action of the median voter. The empirical literature testing the median voter theorem has been conducted in the context of industrialised economies. In this article, we examine the median voter hypothesis with specific reference to SSA, a region characterised by high levels of income inequality and limited redistribution. We adopt an instrumental variable approach to unpack the determinants and plausible mechanisms underpinning this relationship. In the article, we account for the effect of omitted top income earners in income inequality estimates, given their weight in the shape of the income distribution and their influence in redistributive policies. Overall, we find a positive relationship between inequality and redistribution in SSA, especially among middle-income countries. Further examination reveals that the abundance of natural resource rents seems to be the driving force affecting tax policy choices, which in turn exacerbates income inequality and undermines progressive redistribution. Thus, in assessing the relationship between inequality and redistribution, our results do not provide strong evidence to support the propositions of the median voter theorem, but instead, they call for alternative interpretations that seem to align more closely to the existence of multiple steady states.
{"title":"Income Inequality and Redistribution in Sub-Saharan Africa","authors":"M. Niño-Zarazúa, Francesca Scaturro, V. Jordá, F. Tarp","doi":"10.1093/jae/ejac053","DOIUrl":"https://doi.org/10.1093/jae/ejac053","url":null,"abstract":"A strand of the political economy literature emphasizes the effect of income inequality on growth and poverty, which materialises through redistribution. The theoretical expectation postulated by standard economic theory is that high inequality would lead to higher redistribution via the collective action of the median voter. The empirical literature testing the median voter theorem has been conducted in the context of industrialised economies. In this article, we examine the median voter hypothesis with specific reference to SSA, a region characterised by high levels of income inequality and limited redistribution. We adopt an instrumental variable approach to unpack the determinants and plausible mechanisms underpinning this relationship. In the article, we account for the effect of omitted top income earners in income inequality estimates, given their weight in the shape of the income distribution and their influence in redistributive policies. Overall, we find a positive relationship between inequality and redistribution in SSA, especially among middle-income countries. Further examination reveals that the abundance of natural resource rents seems to be the driving force affecting tax policy choices, which in turn exacerbates income inequality and undermines progressive redistribution. Thus, in assessing the relationship between inequality and redistribution, our results do not provide strong evidence to support the propositions of the median voter theorem, but instead, they call for alternative interpretations that seem to align more closely to the existence of multiple steady states.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42841613","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
B. Epo, Francis Menjo Baye, G. Mwabu, M. Etyang, P. Gachanja
We conduct an in-depth analysis of the nexus between inequality of opportunity and inclusive growth in Cameroon and Kenya employing cross-sectional data collected over two time periods in each country. Empirical results show that changes in education, health and labour market endowments have large effects on household economic well-being, as proxied by total expenditures per adult equivalent. Employing the regression-based decomposition, we find that effort-based variables are associated with greater Gini inequality compared with circumstance-based variables—more so for Cameroon than Kenya. Among the effort-based variables, education in Cameroon and health in Kenya, are the main correlates of income inequality. The factual and counterfactual distribution analyses undertaken demonstrate that equalisation of human capital endowments is strongly inequality-reducing and further promotes pro-poor growth. Meanwhile, elimination of circumstance disparities in Cameroon reduces Gini inequality, enhances pro-poorness of the growth process, promotes shared-prosperity in urban areas and reduces inequality between the tails of the distribution of well-being. In Kenya, elimination of circumstance-based disparities is pro-poor improving, shared prosperity enhancing, but Gini inequality augmenting. In contrast to the Cameroonian case, equalisation of circumstances increases inequality between the tails of the distribution of well-being. The mechanisms behind these findings are probably the country-specific redistributive policies.
{"title":"The Nexus between Poverty, Inequality and Growth: A Case Study of Cameroon and Kenya","authors":"B. Epo, Francis Menjo Baye, G. Mwabu, M. Etyang, P. Gachanja","doi":"10.1093/jae/ejac045","DOIUrl":"https://doi.org/10.1093/jae/ejac045","url":null,"abstract":"\u0000 We conduct an in-depth analysis of the nexus between inequality of opportunity and inclusive growth in Cameroon and Kenya employing cross-sectional data collected over two time periods in each country. Empirical results show that changes in education, health and labour market endowments have large effects on household economic well-being, as proxied by total expenditures per adult equivalent. Employing the regression-based decomposition, we find that effort-based variables are associated with greater Gini inequality compared with circumstance-based variables—more so for Cameroon than Kenya. Among the effort-based variables, education in Cameroon and health in Kenya, are the main correlates of income inequality. The factual and counterfactual distribution analyses undertaken demonstrate that equalisation of human capital endowments is strongly inequality-reducing and further promotes pro-poor growth. Meanwhile, elimination of circumstance disparities in Cameroon reduces Gini inequality, enhances pro-poorness of the growth process, promotes shared-prosperity in urban areas and reduces inequality between the tails of the distribution of well-being. In Kenya, elimination of circumstance-based disparities is pro-poor improving, shared prosperity enhancing, but Gini inequality augmenting. In contrast to the Cameroonian case, equalisation of circumstances increases inequality between the tails of the distribution of well-being. The mechanisms behind these findings are probably the country-specific redistributive policies.","PeriodicalId":51524,"journal":{"name":"Journal of African Economies","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45604966","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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