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Tanzania Mainland Poverty Assessment TANZANIA MAINLAND POVERTY ASSESSMENT www.worldbank.org/tanzania Standard Disclaimer: This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Di- rectors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or accep- tance of such boundaries. Copyright Statement: The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/ The World Bank encour- ages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copy- right Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, http://www.copyright.com/. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. Contents Acknowledgements . ix Acronyms and Abbreviations . xi Executive Summary . xiii Introduction . .xxvii CHAPTER 1 Poverty and Inequality Trends . 1 I. Decline in Poverty and Extreme Poverty Since 2007 ...................................................1 II. Improvements in Households’ Living Conditions and Human Development Outcomes ..............5 III. Moderate and Fairly Stable Inequality ..............................................................12 CHAPTER 2 Poverty Profile . 19 I. Still Too Many Poor and Too Many People Clustered Around the Poverty Line . .19 II. The Characteristics of the Poor .....................................................................21 III. Migration and Poverty ..............................................................................27 CHAPTER 3 Economic Growth and Poverty . 35 I. A Brief Review of Recent Economic Growth ..........................................................35 II. The Growth Elasticity of Poverty .....................................................................39 III. The Distributional Pattern of Growth ................................................................40 CHAPTER 4 Uneven Geographic Decline in Poverty . 45 I. Poverty Trends by Geographic Domains .............................................................45 II. Growth and Distributional Changes by Geographic Domains ........................................48 CHAPTER 5 Increasing Inequality between Geographic Domains . 53 I. The Sources of Urban-Rural Inequality ...............................................................54 II. Determinants of Inequality between Dar es Salaam and the Other Regions ..........................57 iii CHAPTER 6 Inequality of Opportunity . 61 I. Inequality of Opportunity in Household Consumption ...............................................62 II. Inequality of Opportunity in Household Income ....................................................67 CHAPTER 7 Demographic Pressures Pose a Challenge to Poverty Reduction . 73 I. Macro Perspective ..................................................................................73 II. The Demographic Transition in Tanzania ............................................................75 III. Patterns and Determinants of Fertility in Tanzania ...................................................77 IV. Main Findings and Directions for Further Analysis ..................................................79 References . 81 Appendices . 87 Appendix 1.A: Poverty Estimation in the HBS 2007 and 2011/12 ............................................88 Appendix 1.B: Prediction Methods to Establish Comparability between the 2007 and 2011/12 Data .........97 Appendix 1.C: Welfare Dynamics ............................................................................98 Appendix 1.D: Static Decomposition of Inequality ..........................................................102 Appendix 2.A: Characteristics of the Poor and Poverty Correlates ...........................................103 Appendix 2.B: Multivariate Regression .....................................................................106 Appendix 2.C: Migration . .110 Appendix 3: Comparison of Poverty Trends Using NPS and HBS Data .......................................118 Appendix 4: The Unconditional Quantile Regression Model & Analysis of Spatial Inequality .................119 Appendix 5: Inequality of Opportunity: The Parametric Decomposition .....................................135 Appendix 6: Demography .................................................................................146 LIST OF TABLES Table I.1 Adjusted Poverty Rates for 2007 Using Prediction Methods .........................................5 Table I.2 Changes in Economic Status across Quartiles, Wave 1 (2008/09) to Wave 3 (2012/13) ...............12 Table I.3 Decomposition of Inequality by Household Attributes .............................................16 Table II.1 Poverty Headcount for Alternative Poverty Lines, 2011/12 .........................................20 Table II.2 Households’ Demographic Structure ..............................................................23 Table II.3 Migration by Gender and Period ..................................................................27 Table II.4 Characteristics of the Migrants ...................................................................28 Table II.5 Reasons for Migrating .............................................................................29 Table II.6 Relationship to the Head of the Household .......................................................29 Table II.7 Differences between Migrants and Nonmigrants before and after Migration .......................30 Table II.8 Asset Differences between Migrants and Nonmigrants before and after Migration .................30 iv Tanzania Mainland Poverty Assessment Table II.9 Migrant Occupations .............................................................................31 Table II.10 Amount of Domestic Remittances Received by Households .....................................32 Table III.1 Real GDP Growth in Tanzania by Sector, 2008–2013 ...............................................37 Table IV.1 Adjusted Poverty Rates for 2007 by Geographic Domain Using Prediction Methods ..............48 Table IV.2 Endowments and Returns Effects of Some Specific Attributes ....................................52 LIST OF FIGURES Figure ES.1 Poverty and Extreme Poverty Incidence. .xiv Figure ES.2 Share of Households with Improved Housing Conditions .......................................xiv Figure ES.3 Net Education Enrolment Rates .................................................................xv Figure ES.4 Annual Growth in GDP and GDP per Capita ....................................................xv Figure ES.5 Income Inequity in Tanzania by Gini Coefficient, 2001–2011/12 ................................xvii Figure ES.6 Gini Coefficients in Sub-Saharan Africa .........................................................xvii Figure ES.7 Distribution of the Poor Population by Geographic Area ...................................... xviii Figure ES.8 Poverty Headcount by Geographic Domain. xx Figure ES.9 Sources of Urban-Rural Inequality: The Contribution of the Differences in Endowments and Returns to the Consumption Gap ..........................................xxi Figure ES.10 Contribution of Circumstance Variables to Consumption Inequality ...........................xxii Figure ES.11 Poverty Reduction by Number of Children (0–14 years), 2007–2011/12 .......................xxii Figure I.1 Poverty and Extreme Poverty Trends in Tanzania Mainland, 2007–2011/12 .........................2 Figure I.2 Trends in Depth and Severity of Poverty in Tanzania Mainland, 2007–2011/12 ......................3 Figure I.3 Adjusted Poverty Rates for 2007 Using Prediction Methods ........................................4 Figure I.4 Trends in Dwelling Materials, 2007–2011/12 .......................................................6 Figure I.5 Trends in Assets Ownership .......................................................................7 Figure I.6 Trends in Agricultural Land Ownership ............................................................7 Figure I.7 Gross Enrollment Rates in Tanzania and International Comparison .................................8 Figure I.8 Primary and Secondary Net Enrollment Rates, 2001–2011/12 ......................................8 Figure I.9 Share of Children Enrolled in Primary School, by Age ...............................................9 Figure I.10 Gross Enrollments by Gender and Gender Parity Index, 2011/12 ..................................9 Figure I.11 Educational Attainment Is Improving Slowly .....................................................10 Figure I.12 Continued Reductions in Child Mortality, 2004/05–2010 .........................................10 Figure I.13 Recent Improvements in Maternal Mortality, 2004/05–2010 .....................................10
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