Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Investing inpeople to fightpovertyinHaiti R efl ec tio ns fo r e v id e n c e -b a s e d p o l ic y m a k i n g Investing in people to fight poverty in Haiti Reflections for evidence-based policy making © 2014 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 17 16 15 14 This work is a product of the staff of The World Bank with contributions from staff of Observatoire National de la Pauvreté et de l’Exclusion Sociale (ONPES) of the Government of Haiti. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Concept & Design: Manthra Comunicación Integral / Santiago Calero Cover Design: Manthra Comunicación integral Contents Forewords xii Acknowledgments xiv Abbreviations xvi Overview 1 Introduction 1 Haiti in 2012: Monetary and multidimensional poverty 2 Improvements in monetary and multidimensional poverty 5 Poverty reduction: the importance of transfers and nonagricultural income 9 Conclusions and Priority Areas for Development and Poverty Reduction Policy Action 12 Background and introduction 14 Part I:Poverty and Inequality Diagnostic, 2012 23 Chapter 1: Poverty profile and trends 24 Introduction 24 Poverty and extreme poverty: levels and trends since 2001 25 Poverty profiles 33 Key messages 43 Part II: Drivers and Constraints for Poverty Reduction 45 Chapter 2: Income generation in rural and urban areas 46 Introduction 46 Income generation in rural areas: opportunities and challenges 49 Income generation in urban areas: opportunities and challenges 63 Internal transfers and remittances: a common strategy for income generation 71 Key messages 76 Chapter 3: Challenges to human capital accumulation 79 Introduction 79 Access to education 82 Access to health care 95 Key messages 114 Chapter 4: Shocks and vulnerability 120 Introduction 120 Shocks, impacts, and household coping mechanisms 123 Vulnerability to natural disasters 134 Key messages 141 iii Chapter 5: Poverty and social protection 145 Introduction 145 Policy framework 146 Social protection needs throughout the life cycle 147 Alignment of social protection, poverty, and risk analysis 150 Key messages 169 Part III: Reflections to Promote Evidence-based Policy Making 173 Chapter 6: The way forward: key messages and priority areas of policy actions 174 Urban and rural livelihoods 175 The access to and quality of health and education services 177 Risk management and protection 178 References 212 Appendixes Appendix A. Poverty indicators, disaggregated by department and area of residence, 2012 180 Appendix B. Income Inequality – Lorenz Curves 181 Appendix C. Poverty rate comparisons 182 Appendix D. The methodology for determining the MPI and identifying the categories of the poor, 2012 183 Appendix E. The evolution of the characteristics of households (poor and nonpoor) 185 Appendix F. Poverty correlates 186 Appendix G. Correlates of poverty and food security 190 Appendix H. Definition of concepts 192 Appendix I. Correlates of labor income, unemployment, underemployment, and informality in urban areas 194 Appendix J. Mincer earnings function and Oaxaca-Blinder decomposition: a methodological clarification 195 Appendix K. Correlates of enrollment and progress in school 199 Appendix L. Descriptive statistics on the shocks reported by households 201 Appendix M. Coping mechanisms 203 Appendix N. Results of the multivariate analysis of shocks 206 Appendix O. Incidence maps of weather events 209 iv Boxes Box O.1. A new national poverty line for Haiti 3 Box BI.1. The history of poverty measurement in Haiti 19 Box 1.1. The use of the multidimensional poverty index to identify the chronic poor 31 Box 1.2. Gender inequalities generate great vulnerabilities in Haiti 38 Box 2.1. The correlates of poverty and food security 52 Box 2.2. Estimating correlates of agricultural productivity 57 Box 2.3. The government strategy for rural development 62 Box 2.4. Zooming in on the gender earnings gap using the Oaxaca-Blinder decomposition 66 Box 2.5. Remittances as a return on investment 75 Box 3.1. The intergenerational persistence of education: educational gap analysis 83 Box 3.2. The education system in Haiti 87 Box 3.3. Cholera epidemiological evolution and current policy actions 102 Box 3.4. The health care system in Haiti 106 Box 4.1. Formal and informal mechanisms for risk management: financial inclusion 130 Box 4.2. The disaster risk management strategy in Haiti 138 Box 5.1. Methodology and limitations of ECVMAS data on social protection 154 Box 5.2. Limited access to a national identification document (CIN) can be an obstacle in gaining access to social protection and other services 156 Box 5.3. Kore Fanmi 166 Maps Map 1.1. Moderate and extreme poverty rates, by department, 2012 27 Map 3.1. Literacy rate in Haiti, 2012 86 Map 4.1. The shaking intensity of the 2010 earthquake 139 Map O.1. Flood-prone areas, Haiti 209 Map O.2. Hurricanes, depressions, and tropical storms, by department, 1954–2001 209 Map O.3. Drought-prone areas, Haiti 210 Map O.4. Earthquakes, by magnitude, intensity, and economic damage, Haiti, 1701–2014 210 Map N.5. Soil Liquefaction incidents, February 2010 211 Map O.6. Landslide incidents during and after the earthquake of January 12, 2010 211 v Figures Figure O.1. GDP per capita in Haiti and in Latin America 2 Figure O.2. Incidence of poverty and number of poor in urban and rural areas 3 Figure O.3. Distribution of household per capita consumption (in Gourdes) 5 Figure O.4. Evolution of extreme poverty in Haiti, 2000-2012 6 Figure O.5. Income inequality in Haiti and in Latin America, circa 2012 7 Figure O.6. Changes in per capita income composition in urban areas per income quintile, 2001–12 10 Figure O.8. Changes in per capita income composition in rural areas per income quintile, 2001–12 11 Figure BI.1. GDP per capita in Haiti and in Latin America 14 Figure BI.2. GDP growth rate in Haiti and Latin America in 1980–2013 15 Figure BI.3. Real and per capita GDP growth in 2001–2013 18 Figure 1.1. Incidence of moderate and extreme poverty in urban and rural areas, 2012. 26 Figure 1.2. Trends in extreme poverty in urban and rural areas, 2000-2012 28 Figure 1.3. Income inequality in Haiti and in Latin America 30 Figure B1.1.1. Poverty decomposition according to the MPI and monetary poverty 32 Figure 1.4. Chronic and transitory poverty, service access deprivation and resilience in Haiti, 2012 32 Figure 1.5. Income composition in urban and rural areas and by poverty status 35 Figure 1.6. Food insecurity in Haiti, 2012. 36 Figure 1.7.