The Welfare Effects of Structural Change and Internal Migration in Tanzania
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Washington, DC: World Bank
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Structural change has implications
for various dimensions of development, including poverty
reduction. However, the existing empirical literature on
Sub-Saharan African economies, including Tanzania, has
mainly focused on trends and patterns in macroeconomic or
aggregate welfare indicators, largely providing a
descriptive analysis of the nature of structural change and
its potential welfare implications. This paper provides
micro insights on structural change in Tanzania and its
effect on welfare, using a recent household panel dataset,
which was collected between 2015 and 2021. The results show
that cross-sector labor movements are dominated by movements
between agriculture and services, although most individuals
studied within the two periods continue to remain in
agriculture, with industry’s share in employment declining
marginally. The paper shows that among the individuals
studied, the number of people who slid into poverty was
nearly twice the number who escaped poverty, and this is
significantly influenced by the pattern of sectoral
transitions experienced by the individuals. The findings
show that in addition to sectoral transitions and migration
being important to each other, they are both driven by
similar micro factors. The paper highlights the importance
of education (particularly secondary or higher education) to
increasing the chances of an individual embarking on
welfare-enhancing sectoral movement and associated migration
across districts in Tanzania.
Palabras clave
STRUCTURAL CHANGE, INTERNAL MIGRATION, WELFARE, CROSS-SECTOR LABOR MOVEMENT, PANEL DATA, TANZANIA