Bangladesh Poverty Assessment: Building on Progress
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Transcript of Bangladesh Poverty Assessment: Building on Progress
Bangladesh Poverty Assessment: Building on Progress
Poverty Trends and Profile
Dhaka, October 23rd 2002
1. Trends in Poverty during the Nineties
Trends in Income Poverty
CBN poverty measures based on various HIES show:
• Decline of roughly one percentage point per year during the nineties
• Number of the very poor declined by only 2.7 million, and of poor remained unchanged
• Poverty higher in rural (53%) than in urban (37%) areas, but declined at roughly same rate
• Considerable regional variation: Highest in Rajshahi (61%) and lowest in Dhaka (45%)
• Poverty rates stagnated in Chittagong division
59%
43%
62.2
50%
34%
45.2 42.5
62.7
0
10
20
30
40 50
60
70
Upper line Lower line Upper line Lower line
Headcount Rate (%) Absolute Number (million)
1991-92 2000
Trends in Output and Employment
Progress … • Per capita GDP increased 36 percent
during the 1990s, twice the average for low and middle income countries
• The labor force grew by 1 million each year to 60 million in 1999-2000
• Private formal sector’s employment share went up from 9 to 14% between 1995-96 and 1999-00, while the public sector’s share remained at 4-5%
• Under-employment declined from 43% to 35% over the decade
• Labor force participation by women increased from 14% to 23%
… but …• Under-employment rates still very
high, indicative of considerable slack in the labor market
• Unemployment rates relatively low (3.7%), but are higher (9%) among young urban males (aged 15-29 years)
• Women still considerably less likely to participate in the labor force than men, and poor working women are at greatest risk of under-employment
• Number of child laborers down from 5.6 to 4.3 million between 95-96 and 99-00. However, one-fourth of children 10-14 estimated to be working rather than studying
Non-income Poverty Measures
Other indicators confirm progress during the 1990s…
• Rising real wages in agricultural, manufacturing, and construction sectors
• Improvements in quantities and composition of food bundle consumed. • per capita fish consumption up 9%• per capita sugar consumption up 11%• per capita meat consumption up 48%
• Anthropometric data suggests good progress in reducing child malnutrition
• Significant improvements in infant & child mortality, and in life expectancy
• Bangladesh has achieved gender and urban-rural parity in enrollment rates
• Evidence of reduced vulnerability to food price variation, and improved
disaster-coping mechanisms
Non-income Poverty Measures (cont.)
… but also illustrate the significant challenges that remain
• Malnutrition rates continue to be high
• Maternal mortality rate among the highest in the world
• Large share of population continues to be at risk to adverse impact of shocks
• Deteriorating law-and-order a source of rising concern, not just for the poor
• More than half (55%) of the population aged 7 and older illiterate
• Gains in enrollment appear to have tapered off or fallen in recent years
• Rising concern being expressed about quality of education imparted through
country’s education system
Impact of Growth and Inequality on Poverty
During the 1990s:• Growth in per capita expenditures
accompanied by rising inequality
• All groups benefited from growth, but the very poor and the better-off benefited relatively more from growth than the middle-class
• Rural areas experienced lower growth compared to urban, but growth was more broad-based in rural areas
Equivalent decline in the incidence of poverty in the two sectors
Growth Incidence Curve for Bangladesh, 1991-92 to 2000
1
1.5
2
2.5
3
3.5
4
0 10 20 30 40 50 60 70 80 90 100
% of population ranked by per capita expenditure
Ann
ual g
row
th in
per
cap
ita e
xpen
ditu
re
(%)
Growth in mean
Mean of growth rates
Rural and Urban Growth Incidence Curves1991-92 to 2000
0 0.5
1 1.5
2 2.5
3 3.5
4
0 10 20 30 40 50 60 70 80 90 100 Urban Areas
Growth in mean
Mean of growth rates
0 0.5
1 1.5
2 2.5
3 3.5
4
0 10 20 30 40 50 60 70 80 90 100 Rural Areas
Ann
ual g
row
th in
per
cap
ita
expe
nditu
re
(%) Growth in mean
Mean of growth rates
% of population ranked by per capita expenditures
2. Profile of the Poorin Bangladesh
Poverty Profile: Land & Education key Assets
Poor
Completed Middle
6%
Completed Primary
12%
Completed Secondary
3%
Completed Higher level1%
Less than Primary
4%
Not literate74%
Non-PoorLess than Primary
5%
Completed Primary
15%
Completed Middle
9%
Completed Secondary
6%
Completed Higher
7%
Not literate58%
Level of Education of Head:• Nearly three-quarters of the poor
population have an illiterate household head
• Incidence of poverty amongst those with an illiterate head eight times that of those with a head with higher education
Land ownership:• Three-fifths of the poor population in
Bangladesh own less than 0.05 acres
• Incidence of poverty amongst the functionally landless is more than three times that of the population owning 2.5+ acres
Poor
Less than 0.05 acres
58%
0.05-0.49 acres15%
2.5 + acres5%
0.50-1.49 acres16%
1.50-2.49 acres6%
Non-Poor
1.50-2.49 acres13%
0.05-0.49 acres11%
0.50-1.49 acres20%
2.5 + acres21%
Less than 0.05
acres35%
Other Household Assets• Considerable disparities in other asset ownership (health, housing,
business assets, etc.) Asset ownership Gini 0.7 vs. Income Gini of 0.4
• Asset portfolios of the poor also differ from those of the rich
Livestock
Fin. Assets and savings
Family business assets
Other farm assets Non-operated land or property
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100%
1 2 3 4 5 6 7 8 9 10 Wealth Decile
Urban Areas
Asset Portfolios Profile
Livestock
Fin. Assets and savings Family business assets
Other farm assets
Non-operated land or property
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100%
1 2 3 4 5 6 7 8 9 10 Wealth Decile
Rural Areas
Sources of Income of the Population
• Income earning strategies are heterogeneous across and within different types of households
• High dependence of the poor on daily wage labor income
• Agriculture (crops, livestock, fishing) is an important source of income, although its importance declines steadily with income
• Even for the poorest tenth of the population, 40% of income is from non-farm sources
Sources of Income by Income Decile
Daily wages
Salaries
Agriculture
Self- employment
Other
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100%
1 2 3 4 5 6 7 8 9 10
Some Findings of Wage and Per Capita Expenditure Regressions
Wage analysis shows that labor markets in Bangladesh attach premiums to:
• Education, for both men and women
• Non-farm employment relative to agricultural daily wage labor
• Public sector jobs relative to those in the private sector
• Location closer to metropolitan centers
Per capita expenditures in Bangladesh are positively correlated with:
• Land ownership: Household that own up to 0.5 acres have 7% higher expenditures than landless households
• Common-property resources: Expenditures are 2-3% higher on average in villages where such assets are present
• Infrastructure: Expenditures are between 6-12% higher in villages with electricity, phones, and a nearby bus stop
Poverty Projections under Alternate Growth ScenariosProjections based on Bangladesh’s growth record over the nineties suggest that an
acceleration in growth rate to 6 percent per annum needed to halve poverty by 2015
31%
25% 20%
50%
18% 13% 10%
34%
0 5
10 15 20 25 30 35 40 45 50
2000 2005 2010 2015 Year
Hea
dcou
nt in
dex
4.5% growth 6.0% growth 7.5% growth
Upper Poverty Line
Lower Poverty Line