Children and the Fiscal Space in Ethiopia

Alemayehu Ambel, Getachew Belete and Oliver Fiala

No 10452, Policy Research Working Paper Series from The World Bank

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.

Date: 2023-05-23
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://documents.worldbank.org/curated/en/09950100 ... 381023513823596f.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:10452

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().