Impact of High Inflation on Household Livelihoods in Urban South Sudan

Using panel data, this paper analyzes the impact of high inflation on household livelihoods inurban South Sudan. Based on a difference-in-difference approach, inflation is found to have a strong negativeimpact on urban poverty between 2015 and 2017, mainly driven by the increase of non-food prices. Food price inflation hada negative and statistically significant impact on girls’ primary and secondary school attendance, while proximity toschool is very important for girls’ school attendance. Increases in food prices led to a decline in labor forceparticipation, increasing unemployment among urban residents. Inflation is exacerbating food insecurity andhunger, particularly for the poorest households who are more vulnerable to hunger. Inflation has also negatively affectedhouseholds’ perceptions of welfare. These changes in welfare are mostly explained by the period of near hyper-inflationin 2017. Addressing high inflation must be at the center of efforts to reduce poverty and hunger to improve the welfareof the people of South Sudan.