Children’s Resources and Poverty: A Collective Consumption Evidence from Ethiopia

We estimate a collective complete demand system model to recover children’s resource shares and analyze their poverty. Identification of the sharing rule between children and adults relies on private assignable goods and distribution factors. Based on Ethiopian LSMS-ISA data for two subsamples of families with children (married male-headed and single female-headed), we observe inequalities in intrahousehold resource allocation and well-being. We find that children command fewer household resources and are poorer than adults, worsening with the number of children. Resource allocation is affected by parental differences in education and age, child education, proportions of female children and women, and the number of non-biological children. Single mothers not only are more altruistic to their children but also avoid higher child poverty than married male heads. However, this seems to disappear when the number of children increases. Unlike the general belief that poor children live only with poor adults and households, our estimates show non-poor families and adults also host poor children. Regional and rural-urban disparities exist. Further, traditional poverty measures, which ignore intrahousehold resource allocation, understate child (and adult) poverty. Findings have implications for fertility, gender, targeting, and spatial redistribution issues.