Decomposing inequality and poverty in post-war Rwanda: The roles of gender, education, wealth and location

Abstract

This paper provides an overview of poverty and inequality in post-war Rwanda. Rwanda is one of the poorest countries in the world, and has recently become one of the most unequal. High levels of poverty and inequality have important implications not only in terms of evaluations of social welfare, but also for management of social tensions and the propensity for violent conflict in the future. This paper uses the first two available and nationally representative rounds of household surveys –EICV1 2000 and EICV2 2005 – to decompose and identify the major ‘sources' of poverty and inequality in the country. I find stark differences in vulnerability to poverty by region, gender and widow status of the head of household. I additionally find important changes in the ‘income generating functions' of Rwandan households, and that distribution of land and financial assets are increasingly important in determining the inter-household distribution of income.

Keywords:

• Rwanda
• inequality
• poverty
• gender
• decomposition methods

JEL codes:

• D26
• I3
• J16
• O15

Notes

²Ethnicity is not examined because the Government of Rwanda, since the 1994 genocide, made it illegal to collect information on ethnicity.

³An extensive literature on vulnerability exists (see Chaudhuri et al., 2002; Bourguignon et al., 2006; Kamanou & Morduch, 2005).

⁴Old returnees refer to individuals whose families fled Rwanda during periods of violence prior to 1990. A large proportion of these families escaped Rwanda from 1959 to 1963 during the instability and targeted attacks of Tutsi's with independence and the overthrow of the monarchy.

⁵The dependency ratio is calculated as number of children (age <18) divided by number of adults.

⁶Pottier (2006) cites three additional sources of conflict around land since the genocide, due to female-headed households' need for land, return of new and old caseload refugees, and acquisition of land by the new political elite.