(Photo: IMF)
Dear maria,
The ability to track how people in sub-Saharan Africa have been able to progress educationally and economically from the previous generation has been limited, until now. In a new article, the IMF's Rasmane Ouedraogo and Nicolas Syrichas explain how in a study of of 72 million individuals since 1920, they were able to circumvent the lack of income data across generations in Africa by using the educational and occupational attainment of parents and their children to construct intergenerational mobility indicators.  Read the full article below or on the web.
Have a print copy of F&D Magazine delivered to your home or office. COMING SOON: The next issue of F&D Magazine will be published on December 2. The issue will focus on various ways to safeguard global health and well-being. The pandemic has forced a rethink of international cooperation, public health systems, what defines a healthy society, and whether we need to explore new ways to measure prosperity. Our authors will help bridge the undeniable connection between human and economic health. Ever since the Transatlantic slave trade ramped up in the 17th century, the African continent has had a tough time economically and socially. But around the mid-1990s, the momentum shifted. Over the past two decades, the size of Africa’s economy, as a whole, increased by 50 percent in contrast to a world average of 23 percent. A natural question is how evenly—or unevenly—the benefits of this economic progress have been shared among the population. The answers are critical: recent history has shown that sustainable economic prosperity does not necessarily translate into significant social improvement. According to the World Bank (2020), the poverty rate in sub-Saharan Africa has not fallen fast enough to keep up with population growth in the region, and 433 million Africans were estimated to be living in extreme poverty in 2018, up from 284 million in 1990. A general indicator of a fair and fluid society is intergenerational social mobility—the likelihood that children will achieve a higher standard of living than the household in which they were nurtured. Intergenerational social mobility is often measured in terms of the joint lifetime earnings of the parents and offspring adjusted for the inflation rate, using administrative tax record data. Labor earnings data for both the parents and their offspring are widely available for many developed economies, but are scarce for Africa. In our new study of 72 million individuals since 1920, we circumvent the lack of income data across generations in Africa by using the educational and occupational attainment of parents and their children to construct intergenerational mobility indicators. We measure intergenerational mobility in educational and occupational attainment by linking parents to children in the same household in a set of 28 African countries. Higher education and occupation status is associated with a higher living standard and is comparable across countries. Economic opportunities Our key finding is that economic opportunities measured by literacy rates have improved over time. In Africa, children of both sexes born in the mid-1990s to illiterate parents had a 60 percent likelihood of completing primary school. In comparison, those born in the mid-1940s had only a 20 percent probability. On the other hand, four out of five children whose parents work in one of the traditional low-skill agricultural sectors are likely to follow in their parents’ footsteps across gender and all birth cohorts. This finding suggests that increased education has not translated into better jobs for everyone, which underscores the general African youth unemployment problem. Several factors could explain this divergence, including market and policy failures, the absence of labor opportunities, and school quality. Moreover, there is staggering heterogeneity in African countries’ rates of economic opportunity. In Botswana and South Africa, 75 percent of children achieve higher literacy status than their uneducated parents, whereas that figure is less than 20 percent in Ethiopia and Mozambique. In occupational status, half of the children born in Botswana and South Africa surpass that of their farmer parents. In Ethiopia and Mozambique, only a handful of them end up in a higher-status profession. These findings reflect the persistence of poverty and lack of opportunity in many African countries. Disaggregating the data by gender and region shows that children born in rural areas have a significantly lower probability of upward mobility in education and occupation status than their peers born in urban areas. In addition, in many African countries, there is a conspicuous gender wedge that appears to narrow over generations. Looking at the interplay between education and occupation, the joint upward mobility in education and occupation has declined over younger cohorts, suggesting that the occupational reward, or premium, from better education is declining over time. This disconnect between educational and occupational mobility in recent decades could be linked to two factors: more graduates but weak job creation and a mismatch between labor market needs and graduates’ skills. More surprisingly, the probability that a child with upgraded educational attainment will experience downward mobility in occupation has increased over time. To get further insight into the factors associated with social mobility, we examined several possible drivers of intergenerational mobility in education and occupation. Our research shows that higher upward intergenerational mobility is positively associated with access to electricity and water. Other mechanisms—such as higher fertility, rural residence, and child marriage—are negatively associated with upward mobility. Differences in mobility across countries could also reflect disparities in public education spending, institutions’ quality, and social protection coverage. Other factors, such as conflicts and natural resource endowment are negatively associated with upward educational and occupational mobility. Main lessons Our findings yield three broad lessons overall. First, the place children in Africa are born significantly affects their future socioeconomic status. African regions differ primarily because of differences in the labor market and secondarily in their educational opportunities for children. In this regard, targeted policies to tackle the rural-urban divide, narrow the gender gap, and shrink regional inequalities are essential. Sustaining education spending and investing in human and physical capital will be critical to bridge the existing gaps and create and share opportunities with all citizens. Second, opportunities in education and occupation are persistently low for children in households without access to basic infrastructure—electricity and water. In many African countries, children still drop out of school to handle routine household needs such as fetching water from the river. This suggests that investment in basic infrastructure could enhance education and employment and help lift households out of poverty. Third, good governance and social policies could create educational and employment opportunities for children. African countries should, therefore, promote good governance and enact policies aiming to extend social protection coverage and reduce the risk of violent conflict—critical predictors of social mobility on the continent. The current difficult macroeconomic conditions, sizable job loss, and closures of schools following the outbreak of the COVID-19 pandemic could worsen social mobility in Africa and widen existing gaps. Reference: World Bank. 2020. “Poverty and Shared Prosperity 2020: Reversals of Fortune.” Washington, DC.  | 
