Role of Education for Poverty Reduction: Distribution of Education Expenditure Across Consumption Groups in Yemen

Abstract

This paper examines how public education expenditure is equitably distributed across consumption groups in Yemen with the aim to consider the role for reducing poverty and income inequality. It employs a standard benefit-incidence analysis methodology, with attention to country-specific measurement issues and methodological limitations, using the micro-level data from nationally representative surveys and the government official data on schools and public expenditure. Gender and rural-urban disaggregated analyses are also undertaken.

It is found that Yemen spends the adequate level of public expenditure on education as a whole but the distribution pattern does not necessarily favor a poorer group in absolute terms. Women and rural population in any consumption groups gain far less benefits from public expenditure than males and urban population. The distribution pattern is different by the level of education and it tends to favor the poor at a lower level of education. However, public expenditure on primary or basic education does not appear to be distributed equitably to the poor in Yemen as compared with other countries while public expenditure on secondary and higher education is less inequitably distributed. A snapshot of demand for basic education implies that poorer households can be more responsive to expansion of educational supply and reduction in cost of schooling but that girl-specific factors need to be addressed for stimulating demand for rural girls' schooling in any consumption groups.

Policy implications to improve the distribution pattern of public education expenditure in favor of the poor, rural population, and women include: retaining a current high level of public financial commitment to education while ensuring the allocation prioritized to basic education; improving internal efficiency in basic education while expanding new programs for under-benefited children, especially rural girls; introducing programs to increase household spending among the better-off households at a higher level of education; and improving the information base on scholarships abroad programs on equity aspects.