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

• Published date: 01 November 2021
• Author: Vincenzo Salvucci,Finn Tarp
• Date: 01 November 2021
• DOI: http://doi.org/10.1111/rode.12835

Rev Dev Econ. 2021;25:1895–1918. wileyonlinelibrary.com/journal/rode

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1895

Received: 17 March 2021

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Revised: 14 August 2021

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Accepted: 9 September 2021

DOI: 10.1111/rode.12835

SPECIAL ISSUE ARTICLE

Poverty and vulnerability in Mozambique: An

analysis of dynamics and correlates in light of

the Covid- 19 crisis using synthetic panels

VincenzoSalvucci

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FinnTarp

This paper has been submitted for the special issue: “Poverty, vulnerability and Covid- 19.”

University of Copenhagen, Copenhagen,

Denmark

Correspondence

Vincenzo Salvucci, University of

Copenhagen, Øster Farimagsgade 5,

Building 26, DK- 1353 Copenhagen K,

Denmark.

Email: vincenzo.salvucci@econ.ku.dk

Funding information

This paper is part of the Oxford Policy

Management (OPM) Data and Evidence

to End Extreme Poverty (DEEP) project

undertaken on behalf of the Foreign,

Commonwealth and Development Office

of the UK.

Abstract

This study aims at providing new insights into poverty,

vulnerability, and their correlates in Mozambique, apply-

ing synthetic panels techniques and expanding on earlier

analyses. Our results suggest that there is a high degree of

poverty immobility, especially in rural areas in the north-

ern and central regions and for low- educated people. Even

nonpoor households are at a high risk to vulnerability, and

this risk does not differ much for households in urban/rural

areas or in different regions or with different education lev-

els. We also observe that a large portion of the population re-

mains in or out of poverty over the entire year, with a higher

percentage of individuals moving into poverty between the

dry and the rainy seasons and a nonnegligible proportion of

vulnerable people not managing to revert to nonpoverty in

the subsequent dry season. Overall, these findings are highly

relevant for designing anti- poverty policies and strategies, as

they provide information on intra- year shocks and on some

of the characteristics related to upward and downward mo-

bility over longer time spans, also with regard to the recent

Covid- 19 and other recent shocks suffered by the country.

KEYWORDS

Mozambique, poverty, poverty dynamics, synthetic panels,

vulnerability

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use,

distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes.

© 2021 The Authors. Review of Development Economics published by John Wiley & Sons Ltd.

1896

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SALVUCCI and TARP

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INTRODUCTION

Longer- term poverty trends in Mozambique are well known thanks to a number of available

household surveys and to several poverty assessments and studies undertaken since 1996/1997.

The positive achievements over time in terms of growth and poverty reduction, together with

concerns related to sluggish agricultural productivity, growing inequality, and regional dispar-

ities, are among the most important stylized facts uncovered by these analyses. Nevertheless,

Mozambique remains one of the poorest countries in the world.

Five years ago, the positive developments registered seemed to pave the path for further

growth and broad- based development, and findings of significant coal and natural gas reserves

in the early 2010s increased these expectations even further. Nonetheless, from 2015 a series of

economic and natural shocks hit the country, causing significant economic slowdowns and pos-

sibly strong impacts on living standards (Egger et al., 2020; Mahdi et al., 2018, 2019; Mambo et al.,

2018; World Bank,2020a). Finally, the Covid- 19 crisis struck and remains ongoing (Barletta et al.,

2021; Betho et al., 2021; DTM & INGC,2020; FAO, 2020; Mussagy & Mosca,2020).

In this situation, understanding who among the poor and vulnerable are likely to remain in

their category over time or experience a downward/upward transition is key for timely policy re-

sponses. Such an analysis would greatly benefit from representative panel data following house-

holds over time, but panel data are not available.1 While nationally representative cross- sectional

household budget survey data exist, they are collected only every 5– 6years. Consequently, most

poverty studies and evaluations in Mozambique lack the poverty and vulnerability dynamic

dimension.2

This study attempts to provide new insights into poverty, vulnerability, and their correlates

in Mozambique using all the information in the four national household budget surveys avail-

able and with regard to the Covid- 19 crisis and other shocks suffered by the country in recent

years. We first expand the analyses in Salvucci and Tarp (2021) that applied the synthetic panels

approach introduced by Dang etal.(2014) and Dang and Lanjouw (2013, 2017, 2021) to the four

national household budget surveys; and in this study, we obtain a more detailed profile of poverty

and vulnerability transitions, adding insights to the dynamic dimension of these phenomena.

Moreover, we analyze the panel dimension of the 2014/2015 household budget survey in detail

compared to the last poverty assessment. It only presented poverty rates in the various quarters

without exploring the different trajectories.

The new insights we provide include robust estimates of the transition probabilities between

different poverty states in a period of sustained growth and moderate poverty reduction. They

highlight the results relative to the probabilities of staying poor, becoming vulnerable or falling

into poverty, for different household categories and characteristics over time. Also, we provide

an analysis of intra- year mobility in a “normal” year such as 2014/2015. It permits analyzing,

for example, the characteristics of those households that remain poor throughout the year or

the characteristics of those who fall into poverty during the rainy season and do not manage to

recover in the subsequent dry season, a key pattern in the Mozambican setting.

The period under analysis has been one of accelerated growth and poverty reduction for

Mozambique, and our results depend on the specific subperiod under analysis. This means, for

JEL CLASSIFICATION

I32; C53