A Simultaneous Random Effect Model Of Poverty And Child Bearing: Evidence From Ethiopia

Course ID
Ethiopian Economics Association (EEA)
Abbi Mamo Kedir

The incidence and severity of poverty in urban and rural Ethiopia are similar – both at
very high levels. In contrast, urban and rural fertility rates differ dramatically. Whereas the Total Fertility Rate (TFR) in rural areas is as high as 5.5, it is as low as 1.9 in Addis Ababa. The declining fertility rate especially in the capital city is paradoxical to economic demographers. This paper analyses the complex relationship between childbearing and poverty in urban and rural Ethiopia. We model child bearing and poverty as joint processes and use a joint (simultaneous) estimation technique using FIML (Full Information Maximum Likelihood). In a panel probit context, we assumed non-zero correlation between the household specific random effects of our fertility and poverty equations. We have included fertility variables as endogenous regressors in the poverty equation and poverty indicator variable as an endogenous regressor in the fertility equation. Using a panel data for three (comparable) waves both for rural and urban Ethiopia, our analysis examines the inherent differences in the poverty and fertility relationship. Among others, child labour is a significant factor for high fertility in rural areas. Surprisingly, it is also a factor which is responsible for increasing the probability of poverty incidence at the household level. The possible implications of our results include the provision of improved family planning services, social support, labour market conditions and educational services both in rural and urban Ethiopia. “At an estimated population of 77 million people, Ethiopia is second only to Nigeria – currently sub-Saharan Africa’s most populous nation. And Ethiopia’s population is growing at a rapid pace, adding some two million people every year. Experts are warning the Horn of Africa nation may not be prepared to handle the consequences of such a population boom. By the year 2050, the Washington-based Population Reference Bureau says Ethiopia’s population will grow by an astounding 120 percent. That means in 44 years, the population of Ethiopia is expected to be around 169 million people”. March 8, 2006 (VOA News)

Corporate Author: Getnet Alemu and Getachew Yoseph (Editor) & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: Ethiopian Economic Association (EEA)
ISBN/ISSN: 978-9994-54-03-7
Primary Descriptors:


Geographic Descriptors: Ethiopia
Cataloge Date: 02/27/2013
Broad Subject heading: Poverty, food, production& agricultural practices
Call Number: 330.963 PRO 2007
Serial Key Title: Proceedings of the Fourth International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: II
Publication date: 2013-05-27 00:00:00
Forum or Discussion date: 2013-02-27 00:00:00
PDF file: Abbi Mamo_A Simultaneous random effect model of poverty and child bearing.pdf
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Author: Abbi Mamo Kedir

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