2011年-世界发展银行全球_The_Impact_of_the_Financial_Crisis_on_Poverty_and_Income_Distribution_in_Mongolia_28页_539kb

Summary of the Impact of the Financial Crisis on Poverty and Income Distribution in Mongolia

Core Content

This paper analyzes the impact of the 2008-09 financial crisis and the subsequent Dzud (severe winter storm) on poverty and income distribution in Mongolia. It employs a microsimulation model based on pre-crisis household data and macroeconomic projections to estimate these impacts, as post-crisis household data were not available.

Main Points

• Economic Impact of the Crisis: The financial crisis significantly slowed economic growth, especially in the industrial sector, which contracted by 4.1% in 2009. Per capita GDP is projected to fall by 0.5% in 2009.

• Recovery Trends: The economy began to recover in 2010 and 2011, with GDP growth rates of 7% and nearly 9%, respectively. Remittances, a key source of income, are expected to grow at a high rate (48.3% in 2009) but slow down in subsequent years.

• Labor Market Effects: The crisis led to a contraction in the labor market, with a decline in employment levels and rates. The employment rate dropped from 54.9% in 2008 to 51.3% in 2011. The services sector maintained a relatively stable share of employment, while the shares of agriculture and industry decreased.

• Income Changes: Labor income fell by 2.2% in 2009, while non-labor income (including remittances) increased by 4.7%. Total household income decreased by 0.4% in 2009, but recovered in 2010 and 2011, with labor income being the main driver in 2010 and non-labor income in 2011.

• Poverty and Inequality: The moderate poverty headcount is projected to increase by 1 percentage point during the crisis, but decline below pre-crisis levels during the recovery. Inequality is expected to continue rising even after the recovery.

• Distributional Impacts: The crisis disproportionately affected certain groups, particularly those in urban areas and employed in industry or services. These households experienced larger income losses compared to the chronic poor and the non-poor.

Key Information

• Crisis-Vulnerable Households: Defined as households that were not poor in 2008 but became poor in 2009. These households suffered a 62% drop in average income, with a 75% loss in labor income.

• Chronic Poor: Households that were poor in both 2008 and 2009. They experienced smaller income losses compared to the crisis-vulnerable.

• Non-Poor: Households that were not poor in either 2008 or 2009. They also experienced smaller losses than the crisis-vulnerable.

• Income Sources: Labor income and international remittances account for a significant portion of household income. Non-labor income, such as profits and rents, is assumed to grow at the rate of GDP.

• Methodological Limitations:

  • The model assumes that structural relationships remain constant.
  • It does not account for the informal economy.
  • It uses income data rather than consumption data, which may lead to overestimation of consumption impacts on better-off households.
  • It does not allow for factor mobility across regions or sectors.

• Model Structure:

  • Combines behavioral models from pre-crisis data with macroeconomic projections.
  • Generates estimates for households across the income distribution.
  • Allows for analysis of poverty and inequality changes over time.

Sectoral and Regional Impacts

• Agriculture: Suffered from the Dzud, which led to significant livestock losses and affected rural households.
• Industry: Dominant sector, with labor income heavily impacted by reduced export demand.
• Services: Maintained a stable share of employment but still experienced some negative impacts.
• Urban vs. Rural: Urban households were more affected by the crisis, with higher income losses than rural households.

Poverty Gap and Recovery

• The poverty gap (distance from the poverty line) fell during the recovery but remained above crisis levels, indicating that many who exited poverty were only marginally above the poverty line.
• The model highlights the importance of understanding how different channels of economic shocks affect various groups within the population.

Conclusion

The financial crisis and the Dzud had a complex and dynamic impact on poverty and income distribution in Mongolia. While the economy recovered, the effects on different groups varied significantly. The model provides a useful tool for policymakers to understand and anticipate these impacts, despite its limitations.