Main results of 2016 Household Socio-Economic Survey NATIONAL STATISTICS OFFICE OF MONGOLIA Poverty profile - 2016 Main results of 2016 Household Socio-Economic Survey Mrs. S. Bolormaa, Statistician Population and Social Statistics Department

Contents 1. Understanding poverty 2. Poverty profile 3. Poverty trends 4. Household income and consumption 5. Impact of safety net

1. Understanding POVERTY

What is POVERTY ? Understanding and definition of poverty It is pronounced deprivation in well-being Poverty includes: Low level of income Poor health Low level of education Poor intellectual and physical capacity Poor nutrition Limited access to goods and services Limited access to infrastructure Limited freedom of religious and political expression

Measuring POVERTY Understanding and definition of poverty Defining welfare measures Define relevant welfare measure Monetary-consumption Select a poverty line – that is a threshold below which a given household or individual will be classified as poor Poverty line Select a poverty indicator– which is used for reporting for the population as a whole or for a population sub-group only Poverty main indicators Measuring POVERTY

What is POVERTY LINE? Understanding and definition of poverty Minimum level of expenditures or income at which a person’s healthy and active life, food energy, goods and services required Low consumption High consumption Poverty line Poor Non- poor

2. Poverty profile

Poverty profile

Poverty lines can be food and non-food Poverty profile Poverty lines can be food and non-food

Poverty profile As of 2016, Mongolia had a population of 3.1 million 29.6% or 907.5 thousand persons are poor

Poverty profile Poverty main indicators, national average and by area   2010 2012 2014 2016 Changes /2016-2014/ Poverty headcount National average 38.8 27.4 21.6 29.6 8.0 Urban 33.2 23.3 18.8 27.1 8.3 Rural 49.0 35.4 26.4 34.9 8.5 Poverty gap 11.5 7.1 5.2 7.7 2.5 9.4 6.2 4.9 7.2 2.3 15.2 8.8 5.8 3.0 Poverty severity 4.6 2.7 1.9 2.9 1.0 3.7 2.4 2.8 0.9 6.4 3.2 2.0 1.2

Poverty profile Poverty main indicators by region 2014 2016   2014 2016 Өөрчлөлт /2016-2014/ Poverty headcount Western 26.0 36.0 10.0 Khangai 25.3 33.6 8.3 Central 22.2 26.8 4.6 Eastern 31.4 43.9 12.5 Ulaanbaatar 16.4 24.8 8.4 Poverty gap 5.3 9.7 4.4 5.4 8.2 2.8 5.5 7.0 1.5 8.6 3.9 4.5 6.4 1.9 Poverty severity 1.7 3.7 2.0 2.9 1.2 2.1 2.7 0.6 3.3 4.8 2.5 0.8

Poverty profile Poverty main indicators by location 2014 2016   2014 2016 Changes /2016-2014/ Poverty headcount Ulaanbaatar 16.4 24.8 8.4 Aimag centers 23.8 31.8 8.0 Sum centers 24.7 32.3 7.6 Countryside 27.9 38.0 10.1 Poverty gap 4.5 6.4 1.9 5.8 8.8 3.0 5.7 8.5 2.8 6.0 9.2 3.2 Poverty severity 1.7 2.5 0.8 2.1 3.4 1.3 2.0 1.2

Poverty profile Poverty headcount by aimag in 2016

Poverty profile Poor population 2014 2016 Changes   2014 2016 Changes Population, thousand persons Poor, thousand persons Total 2 937.9 634.0 3 063.6 907.5 273.5 Urban 1 951.8 367.8 2 076.8 563.8 196.0 Rural 986.2 260.1 986.7 343.7 83.6 Region Western 376.7 98.1 393.6 150.1 52.0 Khangai 567.4 143.5 585.7 189.6 46.1 Central 475.9 105.8 492.0 127.6 21.8 Eastern 203.4 63.9 211.4 97.1 33.2 Ulaanbaatar 1 314.5 215.9 1 380.8 343.1 127.2 Location Aimag centers 637.3 151.7 696.1 220.7 69.0 Sum centers 372.9 92.0 537.5 173.4 81.4 Countryside 613.2 171.2 449.2 170.4 -0.8

Poverty profile Inequality National average Urban Rural Region Western   GINI coefficient 2014 2016 National average 0.32 Urban 0.33 Rural 0.28 0.30 Region Western Khangai 0.29 Central 0.31 Eastern Ulaanbaatar 0.34 Location Aimag centers Sum centers Countryside 0.27

Poverty profile Monthly average per capita consumption, tugrugs   Monthly average per capita consumption Changes /2016-2014/ 2014 2016 National average 268 069 236 288 -11.9 Urban 290 123 249 102 -14.1 Rural 229 471 209 260 -8.8 Region Western 232 646 198 561 -14.7 Khangai 233 923 213 864 -8.6 Central 262 308 245 333 -6.5 Eastern 224 516 185 222 -17.5 Ulaanbaatar 305 380 261 826 -14.3 Location Aimag centers 258 855 223 689 -13.6 Sum centers 240 228 219 234 -8.7 Countryside 219 737 197 322 -10.2

Monthly consumption of NON-POOR, 2016 Poverty profile Monthly consumption of NON-POOR, 2016

Monthly consumption of POOR, 2016 Poverty profile Monthly consumption of POOR, 2016

Poverty profile Monthly average per capita consumption, by main categories of consumption, urban and rural, 2016

Monthly average per capita consumption, Poverty profile Monthly average per capita consumption, by household deciles

Poverty profile Poverty main indicators by age of head of household Poverty by household size More than 8 Poverty headcount Main poverty indicators by highest educational level completed by household head Poverty gap Poverty severity Primary None Lower secondary Technical and professional Master Complete secondary Vocational Diploma Bachelor’s

Poverty profile Main poverty indicators, by labor force participation of household head   National average Employed Unemployed Outside the labour force Total Agriculture Industry Services Poverty headcount 29.6 27.6 39.1 31.7 19.8 48.7 30.6 (0.7) (1.3) (0.8) (2.2) (1.2) Poverty gap 7.7 6.8 10.0 8.5 4.3 15.4 (0.2) (0.5) (0.9) Poverty severity 2.9 2.4 3.6 3.2 1.4 6.5 3.4 (0.1) - Standard errors are included in brackets. 

3. Poverty trends

Poverty distribution curve Poverty trends Poverty trends Poverty distribution curve Poverty line Per capita consumption (Thousand of Tugrug per month) Source: HSES 2014 and HSES 2016 Cumulative share of population Poverty headcount (%) National Urban Rural Poverty declined significantly during 2012-2014, but increased between 2014-2016

Poverty trends Many households were just above the poverty line in 2014, however number of households below poverty line increased in 2016. Rise in poverty has been led by uniform decrease in consumption. Poverty line

Poverty trends Poverty growth was higher in Eastern region and lower in Ulaanbaatar

Poverty trends Urban poverty remains stable 2016

Poverty trends Poverty rate by source of income, type of housing, gender and education of household head

Decomposition of poverty changes into growth and inequality components What is the effect of the growth in mean consumption and the increase in consumption inequality on poverty? Change in poverty: - growth of consumption is generally associated with reduction of poverty - rise in inequality could be expected to increase poverty Growth component - real mean consumption had changed - no change in relative inequalities Inequality component - relative inequalities had changed - no change in real mean consumption

Decomposition of poverty changes into growth and inequality components Between 2014 and 2016 :   Poverty Headcount Gap Severity National Change in poverty 8.0 2.5 1.0 Growth component 7.3 2.3 Inequality component 0.7 0.2 0.0 Urban 8.3 0.9 7.8 1.1 0.5 -0.2 Rural 8.5 3.0 1.2 6.6 2.0 0.8 0.4 If inequality had not changed, the poverty would have increased by 7.3 points due to decrease in consumption. If average consumption had not changed, the poverty would have increased by 0.7 points due to increase in inequality component. Because of these two factors the poverty growth is 8.0 points.

4. HOUSEHOLD INCOME AND CONSUMPTION

Household income and consumption

Decomposition of poverty changes by growth in income sources Household income and consumption Decomposition of poverty changes by growth in income sources

5. IMPACT OF SOCIAL PROTECTION AND ASSISTANCE

Social protection coverage Impact of social protection and assistance Social protection coverage   Household Population Total 89.4 94.3 Social protection and assistance 87.4 93.4 Retirement pensions 29.2 24.6 Maternity, new born and postnatal nursing mothers benefit 8.9 12.1 Disability pension 11.3 13.0 Survivor pension 2.1 2.4 Child money* 63.9 79.4 Other 26.2 30.0 *- Members of households receiving Child Money are included child money beneficiaries

Social protection coverage and distribution Impact of social protection and assistance Social protection coverage and distribution   Total Poor Non-poor 2014 2016 Direct and indirect beneficiaries Social protection programs 93.2 93.4 98.4 98.6 91.8 91.3 Child money 76.5 79.4 18.7 94.2 25.9 73.2 Retirement pension 22.3 24.2 16.7 19.3 23.8 26.3

Social protection coverage and distribution by quintile, 2016 Impact of social protection and assistance Social protection coverage and distribution by quintile, 2016

Average per capita social protection benefits Impact of social protection and assistance Average per capita social protection benefits 2014 2016 Thousand tugrugs

Distribution of social protection beneficiaries Impact of safety net Distribution of social protection benefits Distribution of social protection beneficiaries 2016 он Poor Non-poor As of 2016, 31% of social protection beneficiaries were poor and remaining 69% non poor. As of 2016, 20% of social protection program benefits were distributed to poor and remaining 80% to non-poor.

Share in consumption, national average, 2016 Impact of safety net Share in consumption, national average, 2016 Share of social protection program benefits, pensions and remittances

Per capita share of social protection benefits, 2016 Impact of safety net Per capita share of social protection benefits, 2016 Share social protection benefits, pensions and remittances in consumption is higher among poor than non-poor.

Impact of social protection programs Impact of social protection and assistance Impact of social protection programs   Poverty headcount Poverty gap Poverty severity 2014 2016 National average 21.6 29.6 5.2 7.7 1.9 2.9 All social protection 36.7 47.1 14.4 21.2 8.5 13.7 Child money 24.6 33.3 6.6 9.6 2.7 4.0 Disability pensions 23.8 32.5 9.7 2.8 4.3

Impact of social protection programs in reduction of inequality Impact of social protection and assistance Impact of social protection programs in reduction of inequality   GINI coefficient Teil indices 2014 2016 National average 0.320 0.323 0.186 0.190 All social protection 0.386 0.414 0.272 0.315 Child money 0.332 0.337 0.199 0.205 Disability pensions 0.331 0.338 0.198 0.207

Impact of social protection and assistance Overlapping in benefits and pensions Number of benefits Хүлээн авсан тэтгэмжийн тоо

Cost and benefit correlation, 2016 Impact of social protection and assistance Cost and benefit correlation, 2016   Poverty gap estimation during transition /million tugrugs/ Poverty gap /mln tugrugs/ Difference /mln tugrugs/ (dPG) Monthly spent monetary value /mln tugrugs/ (X) Cost and benefit (dPG0/X) All social protection 93,613.7 34,130.2 59,483.4 144,280.8 0.41 Child money 42,261.6 8,131.4 19,590.9 0.42 Disability pension 42,955.4 8,825.2 19,174.1 0.46 As of 2016, Mongolia needs 34.1 billion tugrugs for poverty eradication. If all kinds of social protection programs would have not applied, this amount would increase to 93.6 billion tugrugs. Monthly the social protection programs have contributed 59.5 billion tugrugs for decreasing the poverty gap. Monthly the population has received 144.3 billion tugrugs from social welfare programs. Correlation of poverty gap reduction cost per 1 tugrug is 0.41, meaning poverty gap is reduced by 0.4 tugrugs for every 1 tugrug spent.

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