Didier Yelognisse Alia, Katia A.S.M. Jossa-Jouable Alia and Edwige Rose Fiamohe
The purpose of this paper is to examine the determinants of poverty and the persistence of poverty in Benin using a longitudinal data for the years 2006-2011. The paper also seeks…
Abstract
Purpose
The purpose of this paper is to examine the determinants of poverty and the persistence of poverty in Benin using a longitudinal data for the years 2006-2011. The paper also seeks to understand the dynamic of poverty and what factors explain households’ mobility across poverty status over time.
Design/methodology/approach
To answer the research questions, the paper develops and estimates logit and probit models of poverty. In addition to households’ characteristics as explanatory variables, the models control for the previous years’ poverty status to test for the hypothesis of persistence in poverty. Next, the paper extends the analysis to compute poverty transition matrix and estimates a multinomial models of the determinants of these transitions.
Findings
The paper finds that households’ demographic and socio-economic characteristics are strongly correlated with their poverty status. It also finds a strong evidence of persistence of poverty: being poor in a year increases the likelihood of remaining poor in the following years. The analysis of the dynamic of poverty reveals that there is a large and rapid change in poverty with households moving in and out of poverty. Across all models, it appears that human capital accumulation through education and labor skills are the strongest forces lifting households out of poverty and persistence of poverty.
Practical implications
Taken together, the results suggest that public policies should not only seek to lift households out of poverty, but also seek to reduce re-entries into poverty by investing in education and improving employment skills.
Originality/value
A key contribution of the study is the characterization of the profile of poor and persistently poor households in Benin, and the analysis of the factors explaining the dynamic of poverty. It updates and complements previous studies on poverty in Benin using the most recent nationally representative longitudinal data. The findings stress the crucial importance of human capital as a key force to lift households out of poverty.
Details
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Didier Yélognissè Alia, Nicolas Ponty and Ignace Kamga Tchwaket
The economic literature identifies two families of motives for private transfers: altruism and exchange. Altruistic models postulates that transfers are unselfish assistance to…
Abstract
Purpose
The economic literature identifies two families of motives for private transfers: altruism and exchange. Altruistic models postulates that transfers are unselfish assistance to vulnerable and poor households. Exchange models, however, explain transfers as temporary assistance to households with the expectation of being paid back. The purpose of this paper is to analyze the motives of inter-households transfers in Burkina Faso and identify which model better explains observed transfers’ decisions. The findings can be useful to provide a information on the profile of households receiving and donating transfers and a better understanding of their roles in local communities.
Design/methodology/approach
The paper uses a nationally representative household survey in Burkina Faso that collects detailed information on inter-household transfers. It combines descriptive analysis with various econometric models to identify the type of behavior that better explain the receipt and donation of private transfers. To account for the non randomness of the receipt and donation of transfers in the population, the study estimates a Heckman model to address selection bias.
Findings
Preliminary analyses suggest that one-third of households have participated in transfers’ exchange, either as recipients or donors with the amount received or given representing a substantial share of household income or expenditure. The econometric analyses show that the primary driver of the receipt of transfers is households’ degree of vulnerability. This result indicates that altruism is the underlying model explaining the receipt of transfers. However, the authors also find that affluent households tend to give and receive larger amounts of money suggesting that some elements of exchange are also at play.
Originality/value
The analysis contributes to a large and growing literature on migration, transfers, and remittances in developing countries. It provides insights into the motives of these non-market transactions in the specific context of Burkina Faso, a developing country, where migration and transfers have been historically important social behaviors. The analysis makes an effort to address the potential bias resulting from households’ self-selection into the donation or receipt of transfer. The findings shed additional light on the double role of transfer as a safety net for the vulnerable and social insurance for the non-poor.