Household Welfare and Poverty Dynamics in Burkina Faso: Empirical Evidence from Household Surveys
32 Pages Posted: 20 Apr 2016
Date Written: April 2001
The benefits from growth following devaluation of the CFA franc in Burkina Faso in 1994 were undermined by increasing income inequality. Factors that fed that growth in income inequality: disparities in wages and in educational attainment and unequal access to productive assets.
Fofack, Monga, and Tuluy investigate the dynamics of poverty and income inequality in a cross-section of socioeconomic groups and geographical regions over the five-year growth period following the 1994 devaluation of the CFA franc in Burkina Faso.
Results show rapidly increasing urban poverty accompanied by rising income inequality, declining poverty-growth elasticities, and significant changes in the poverty map. In rural areas, the incidence of poverty remained the same and income inequality did not increase.
In contrast, the distribution of welfare across socioeconomic groups was more stable. The rank ordering of socioeconomic groups on the welfare scale did not change during the post-devaluation growth period.
Poverty remains largely a rural phenomenon, whose inelastic nature may justify a shift toward growth-oriented policies that at least maintain the rural poor's share of income to reduce poverty in the medium term. Among factors that feed into income inequality: disparities in wages and in educational attainment and unequal access to productive assets (especially human capital).
This paper - a joint product of Macroeconomics 3 and Macroeconomics 4, Economic Management and Social Policy Group; and Burkina Faso, Mali, Mauritania, Sao Tome and Principe Country Director's Office, Africa Region - is part of a larger effort in the region to better understand the dynamics of poverty and how the benefits of growth are distributed in Sub-Saharan African countries. The authors may be contacted at firstname.lastname@example.org, email@example.com, or firstname.lastname@example.org.
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