& Family Planning, Human Development and Growth in Uganda Jouko Kinnunen, VATT Hans Lofgren, World Bank Dino Merotto, World Bank Presentation for the Twelfth Annual Conference on.
Download ReportTranscript & Family Planning, Human Development and Growth in Uganda Jouko Kinnunen, VATT Hans Lofgren, World Bank Dino Merotto, World Bank Presentation for the Twelfth Annual Conference on.
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Family Planning, Human Development and Growth in Uganda
Jouko Kinnunen, VATT Hans Lofgren, World Bank Dino Merotto, World Bank Presentation for the Twelfth Annual Conference on Global Economic Analysis, Santiago, Chile June 10-12, 2009 THE WORLD BANK GOVERNMENT INSTITUTE FOR ECONOMIC RESEARCH (VATT), Finland
Background and Motivation
• • • • • Extremely high fertility and youthful population in Uganda; why a problem?
Development and public expenditure planning needs of GoU Need to endogenize population in MAMS Role of fertility within development Recent changes in the international politics of family planning 2
Research Questions
• • • What is the impact of increased family planning (FP) services on macro and MDG indicators in Uganda?
Does the way of financing the increased (?) public expenditure on FP matter?
How sensitive are the results to FP cost estimates?
3
Main results
• • • • Major effects of FP: – – improved EV welfare for (living) Ugandans; better outcomes for MDG indicators; and – – creation of additional fiscal space in the medium- to long-run Macro-level effects are otherwise minor ”Domesticity” of the adjusting government income variable plays a role Expected per-capita cost of FP very moderate Qualitative results are not very sensitive to the cost of FP 4
• • • • • • • •
Current situation
Total fertility rate (TFR) close to 7 children Dependency ratio = [population not 14-65]/[population 14-65] = 110 percent Unmet demand for contraceptives for 41% of households Current contraception prevalence = 24% 2 out of 7 children unwanted High pressure on land use potential for conflicts Pressures on public expenditure on health and education Dependency of GoU on foreign aid (its value similar to direct tax receipts) 5
Economics and Demography
• • • • Links between growth in per-capita GDP and population Age structure affects labor supply, private and public consumption, investment, and productivity Human development and demography closely linked: MDGs, social services Increasing number of CGE models with (at least partly) endogenous demography 6
• • • • • • • •
MAMS
MAMS = Maquette for MDG Simulations Developed at World Bank; applied to 35 countries (in many cases in collaboration with UNDESA and UNDP) Used to analyze medium- to long-run impact of strategies, including effects on monetary poverty and human development (MDG indicators).
Recursive-dynamic single-country model Government services modeled in relatively detailed fashion: public sector as producer, consumer, and investor Productivity impact of public infrastructure MDGs covered in Uganda application: 1 (headcount poverty), 2 (net primary completion), 4 (under-five mortality), 5 (maternal mortality), 7 (access to improved water) For more information on MAMS: www.worldbank.org/mams 7
The demographic extension
• • • Population disaggregated by gender and (one-year) age cohorts Fertility and mortality modeled with two-level constant elasticity and logistic functions (mimics modeling of MDGs in MAMS) Constant net migration rates 8
Fertility (by age of mother, sex of child) at time t
The dynamics of the demographic extension
Mortality (sex,age) at time t Migration (sex, age) at time t Population(sex,age) at time t (beginning of the year) Population(sex,age) at time t+1 9
Constant elasticity function (bottom level)
ZDEMG dmg
CE
;
poptot MDGVAL
;
mdg QHPC
; ;
QFINS flab
;
QFINS fcapgov
inf intermedia variable for demographi indicator te c
CE
per capita MDG service indicators infrastruc ture 2 level; and capital per 7a; stock capita share of hhd consumptio educated of n; labor force; 10
Mortality rate (top level)
MORTRATE a
,
g
LOG
ZDEMG mrt
;
MDG
4
ADJ
mortality other maternal rate causes for than mortality
int
ermediate general developmen t indicator
;
LOG
adjustment and factor disaggrega te btw aggregate mortality values MDG
4
value
11
Fertility rate (top level)
FERTRATE a
,
g
LOG
ZDEMG frt
* 1
FAMSERV
fertility
15 49
rate olds age group gender of for per and child
int
ermediate general developmen t indicator
; 1
family planning LOG
adjustment and factor disaggrega te btw aggregate mortality values MDG
4
value
*
service fertility effect on
12
BASE scenario 2003-2030
• • • • • • Annual GDP growth 6.2% (recent average growth rate).
Growth in government consumption declines due to completed reforms in primary education Improvements in MDGs In terms of official MDG targets, only MDG1 (poverty) is attained by 2015 TFR falls from 7.3 in 2003 to 5.6 in 2030 Compared to UN medium variant projection: – population growth rate (3.1% 2003-2030) is very close; – dependency ratio, mortality and fertility rates are all higher 13
Real growth of GDP components, percent under BASE scenario 2009-2030
9 8 7 6 5 4 3 2 1 GDP growth Government consumption Private consumption Exports Imports Private investment Government investment 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 14
MDG indicators for BASE
150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 2003 2005 2007 2009 2011 2013 2015 Poverty rate (%) Net primary completion rate (%) Under-five mortality (per 1,000 births) Maternal mortality (per 10,000 live births) Access to clean water (% of population) 2017 2019 2021 2023 2025 2027 2029 15
Policy simulations: increased family planning
• – – – – Gradual increase in spending on FP starting from 2007, ceteris paribus reducing the fertility rate by 20% in each year (of what it otherwise would be at that year) with simulation specific financing adjustments: fp-ftr fp-tax fp-db fp-fb foreign transfers domestic taxation domestic borrowing foreign borrowing 16
• • • • •
Results for FP scenarios
Small macro effects: sligtly slower GDP growth, higher export share of GDP, more rapid growth in higher consumption per capita Impact of FP on public expenditure: higher 2007-2016, lower 2017+ Very small differences in demographic outcomes between FP scenarios ”Domesticity” of the clearing variable for government expenditure matters: most favorable macro effects when changes (increases) in fiscal space are used to adjust (cut) taxes.
Population in 2030 declines from 61.0 to 53.7 million 17
Average growth rates of macro indicators
Table. Real macro indicators by simulation (% annual growth from 2006 to final 2030) 2006 base fp-ftr fp-tax Absorption Consumption - private Consumption - government Fixed investment - private Fixed investment - government Stock change Exports Imports GDP at market prices GDP at factor cost Total factor employment (index) Total factor productivity (index) Real exchange rate (index)
15532.6
10337.2
2275.5
2205.0
715.0
0.0
1781.0
3517.6
13796.1
12648.1
6.22
6.27
6.04
6.32
5.57
6.56
6.22
6.26
6.25
5.09
1.155
-0.19
6.08
6.19
5.69
6.15
5.34
6.94
6.07
6.20
6.21
5.02
1.189
-0.02
6.19
6.33
5.65
6.32
5.35
6.72
6.23
6.26
6.25
5.06
1.194
-0.17
Note: Base-year column shows data in LCU.
fp-db
6.18
6.31
5.65
6.27
5.35
6.64
6.21
6.23
6.23
5.04
1.188
-0.17
fp-fb
6.08
6.19
5.69
6.15
5.34
6.94
6.07
6.20
6.21
5.02
1.189
-0.02
18
Population for BASE and FP-ftr
30,000 25,000 20,000 6 to 12 base 6 to 12 fp-ftr 13 to 17 base 13 to 17 fp-ftr 18 to 64 base 18 to 64 fp-ftr People in working age (over secondary school age) 15,000 Primary school age 10,000 5,000 Secondary school age 0 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 19
Dependency Ratio
120 110 100 90 80 70 base fp-ftr fp-tax fp-db fp-fb UN Medium variant 2008 60 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 20
Total Fertility Rate (TFR)
7.5
7 6.5
base fp-ftr fp-tax fp-db fp-fb UN Medium variant 6 5.5
5 4.5
4 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 21
0 0 Base scenario Women FP-tax scenario Men 22
0 1 3 2 4
MDG indicators for fp-tax: change from BASE
Poverty rate (%) Net primary completion rate (%) Under-five mortality (per 1,000 births) Maternal mortality (per 10,000 live births) Access to clean water (% of population) -1 -2 -3 -4 -5 -6 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 23
Change in final-year EV per capita, %
40% 35% 30% 25% 20% 15% 10% 5% 0% Rural households Urban households Rural households income quartiles 1-2 Rural households income quartiles 3-4 Urban households income quartiles 1-2 Urban households income quartiles 3-4 All households FP - foreign transfers FP - foreing borrowing FP - domestic borrowing FP - taxation 24
Annual growth rate of per-capita consumption
6 5 4 3 2 base total fp-ftr total fp-tax total fp-db total fp-fb total 1 0 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 25
Sensitivity to cost of FP
• • • Even five-fold annual per-couple cost of protection (~$15 to ~76$) does not change the qualitative result of the study – FP economically beneficial in the long run Government expenditures lower than under BASE first in year 2023 instead of 2017 An evaluation of whether FP is desirable or not does not only depend on economic outcomes 26
Change in Government Expenditure when Annual Cost of Protection per Couple is:
27
Government’s share of GDP with FP unit cost of $76
24 22 20 18 16 14 12 base fp-ftr fp-tax fp-db fp-fb 10 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 28
Final Conclusions & Remarks
• • • • Major effects of FP: – improved EV welfare for (living) Ugandans; – – better outcomes for MDG indicators; and creation of additional fiscal space in the medium- to long-run Expected per-capita cost of FP very moderate Integration of economywide and demographic models is often desirable Topics for possible future studies using this framework (with marginal adjustments) include various issues in health economics, including AIDS 29
Thank Your for Your Attention!
¡Muchas gracias por su atención!
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