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Research on the impact of economic crisis on child poverty and well-being and policy responses in low income countries

Negative economic shocks affecting household incomes and public expenditures have the potential to produce long lasting consequences on children's lives. A timely understanding of the social impact of economic crises aids the design of effective policy responses.

The food prices crisis (2007-08) and the global economic crisis (which started in late 2008) had and continue to have important impacts on the living conditions of children in different development and socio-economic contexts. However, statistical evidence and analysis of the social impact of these economic crises is small and often of little use: lack of timely data limits the understanding of the wider social implications of the crisis, and in this scenario there is a risk that children's vulnerability is less visible and therefore receives less attention in setting the policy responses to the crisis.

Developing economic models to simulate the impact of these economic shocks on children and the effect of alternative policy responses can provide useful indications to policy makers in the absence of real time data.

In 2008, responding to a request of, and in collaboration with the UNICEF Regional Office for Western and Central Africa, the UNICEF Innocenti Research Centre (IRC) developed a micro-economic model to simulate the potential consequences of the increase in food prices on child poverty and on other indicators of child well-being, as well those of alternative policy responses. The micro-economic model was applied to the specific case of Mali, and both methodology and applied research have been released in the Innocenti Working Paper series.

The current research project, started in March 2009, builds on the experience of the research on the food crisis in Mali. The objective is to develop a combined macro and micro economic model to simulate the impact of economic shocks (i.e. the global economic crisis) on the living conditions of children in individual developing countries. The first phase of the study focused on three countries of Western and Central Africa (Burkina Faso, Cameroon and Ghana) and simulated, under different scenarios, the impact of the global economic crisis (2009) on child monetary poverty, hunger, school enrolment, child labour and use of health facilities for the period 2009-11. Different policy responses (e.g. cash transfers, food subsidies etc.) have been simulated and compared.

The methodology combining macro and micro analysis models, a regional report for Western and Central Africa and three country studies were released in the second quarter of 2010. Research is planned to adapt the simulation model to other country contexts and to expand the model to consider different policy response options (for example including in the simulation budget policies and fiscal space). It is envisaged that this research will be complemented by a study on understanding the determinants of infant and child mortality.

The research on the impact of economic crises on children in Western and Central Africa has been developed with the collaboration between the UNICEF Innocenti Research Centre, the UNICEF Regional Office for Western and Central Africa and the UNICEF Division for Policy and Practice. The methodology for the study has been developed by an international team of researchers at the UNICEF Innocenti Research Centre, the Consortium pour la Recherche Economique et Sociale (CRES) in Dakar and Laval University. This group also developed the regional report for Western and Central Africa. The application of the simulation models to individual country data is carried out by national research teams, with the support of the respective UNICEF country offices.

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