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Poverty and vulnerability in Mozambique: An analysis of dynamics and correlates in light of the Covid-19 crisis using synthetic panels

Mozambique has experienced a number of significant shocks and stresses since 2015, including a national debt crisis, extreme weather events and, of course, COVID-19. Over the previous two decades, poverty rates in the country had been slowly falling – from 70% of the population in 1996/97 to 46% in 2014/15; now these hard-won gains are under threat. In this paper, we provide new insights into household-level movements into and out of different states of poverty and vulnerability using survey data from 1996/96, 2002/03, 2008/09 and 2014/15. Our findings reveal a worryingly high level of poverty immobility during this period – and even within a single year – as well as widespread vulnerability that means even comparatively secure households are at risk from shocks and stresses.  

Ordinarily, detailed insights into poverty dynamics would require panel data (repeated observations on the same households over time), which is not readily available and is expensive to collect. Instead, our analysis employs innovative statistical approaches to create a ‘synthetic panel’ from cross-sectional household survey data (repeated observations on different households over time). This approach allows us to look at how the situation of different households might change over time and the characteristics associated with that change.  

For example, we find that persistent poverty is more likely among rural households and that upward transitions out of poverty are most strongly associated with higher levels of education. Looking at intra-year transitions in 2014/15 – where we have actual panel data – we see a similar picture of immobility but also important differences in which households might be most vulnerable to specific seasonal transitions. By better understanding these dynamics, particularly in a time of relative stability, we can develop more effective poverty reduction strategies and responses in times of disruption. 



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