Impacts of the Global Economic Crisis on Child Poverty in Cameroon and Options for a Policy Response

Innocenti Working Paper No. IWP-2010-04 (ENGLISH)

65 Pages Posted: 27 Jun 2010 Last revised: 8 Jul 2010

See all articles by Sami Bibi

Sami Bibi

Université Laval - Département d'Économique

John Cockburn

Partnership for Economic Policy (PEP); Université Laval; Partnership for Economic Policy (PEP)

Christian Arnault Emini

University of Yaounde II

Ismael Fofana

Université Laval - Département d'Économique

Paul Ningaye

University of Dschang

Luca Tiberti

Université Laval; Partnership for Economic Policy (PEP)

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2010

Abstract

This study aims to evaluate the potential impacts of the 2008/09 global economic crisis on child poverty in Cameroon. It also explores the potential effects that policy responses to such a crisis could have on children. In order to do this, the study uses a macro-micro methodology. A dynamic computable general equilibrium (CGE) model is used to simulate various scenarios of the economic crisis together with policies which respond to the crisis, taking into account the different transmission channels of the global crisis to the Cameroonian economy. The results of the CGE model are then used in a micro-econometric module in order to evaluate the impacts of the simulated shocks on households in general and children in particular.

Five dimensions of child poverty are examined: monetary poverty, caloric poverty, child school participation and child labour, and children’s access to health care services. The study shows that the crisis is projected to lower the real GDP growth rate by 1.3 percentage points in 2009, 0.9 in 2010 and 0.8 in 2011. The crisis would also bring about a 1.05% increase in the number of children who were poor in monetary terms in 2008 and a 4% increase in 2009, 2010 and 2011, compared to the situation without a crisis. With respect to this reference scenario, the crisis is simulated to increase the number of children who are poor in caloric terms by 0.56% in 2009, 1.08% in 2010 and 1.60% in 2011, and negatively affects, albeit lightly, both children’s school participation rate and their access to health care services

Four alternative policy responses to the crisis are simulated: a reduction in the VAT levied on the sale of food products; elimination of customs tariffs applied on imports of food products; free access to school canteens for children under the age of 15 in districts where monetary poverty is higher than the national average; and granting cash transfers to poor children. These policies, with a cost of 1%, 0.4%, 0.19% and 1% of Cameroon’s before-crisis GDP respectively, are financed either by foreign aid or by draining the state’s foreign reserves. Results from these simulations show that, in terms of poverty reduction, cash transfers appear to be the most effective of the four policy responses mentioned above, but this policy is the most ineffective at improving the real GDP growth rate. At the national level, the cash transfer policy completely counters the increase in monetary and caloric poverty engendered by the crisis over the entire period of the study. It even lowers these two types of poverty to less than the situation where the crisis did not occur. Moreover, these transfers have beneficial, although small, effects on children’s school and labour participation rates. Furthermore, beside the cash transfer policy, the subsidy for school canteens has a relatively low cost but carries fairly considerable benefits in response to the crisis, especially in alleviating caloric poverty; while the other two policies are quite ineffective, regardless of which dimension of poverty is considered.

Keywords: Global economic crisis, child poverty, hunger, education, child labour, health, West and Central Africa, Cameroon, social protection

Suggested Citation

Bibi, Sami and Cockburn, John and Emini, Christian Arnault and Fofana, Ismael and Ningaye, Paul and Tiberti, Luca, Impacts of the Global Economic Crisis on Child Poverty in Cameroon and Options for a Policy Response (June 1, 2010). Innocenti Working Paper No. IWP-2010-04 (ENGLISH). Available at SSRN: https://ssrn.com/abstract=1630483 or http://dx.doi.org/10.2139/ssrn.1630483

Sami Bibi

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
DeSeve
Quebec Canada, QC G1K 7P4
Canada

John Cockburn

Partnership for Economic Policy (PEP) ( email )

P.O. Box 30772-00100
ICIPE - Duduville Campus, Kasarani
Nairobi
Kenya

Université Laval ( email )

Dept. of Economics
Québec, Quebec G1V 0A6
Canada

Partnership for Economic Policy (PEP) ( email )

Duduville Campus, Kasarani
P.O. Box 30772-00100
Nairobi
Kenya

Christian Arnault Emini (Contact Author)

University of Yaounde II ( email )

Yaounde
Cameroon

Ismael Fofana

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

Paul Ningaye

University of Dschang ( email )

Cameroon

Luca Tiberti

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Partnership for Economic Policy (PEP)

P.O. Box 30772-00100
ICIPE - Duduville Campus, Kasarani
Nairobi
Kenya

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