FAMILY PLANNING, GROWTH, INCOME DISTRIBUTION: GRAPH-THEORETIC PATH ANALYSIS OF RWANDA

This paper explores macroeconomic linkages among family planning, human capital and economic growth in Rwanda. Based on a disaggregated social accounting matrix (SAM), welfare effects of alternative exogenous injections are investigated, and the high and low-income pathways are identified by graph-theoretic path analysis. Three important findings follow from the analysis. First, rural income gains spread over the entire economy, while urban income gains are largely contained within urban areas. This suggests a relatively larger income multiplier effect of rural investments. Second, investing in family planning and health promotes agricultural production, with a considerable rural employment effect. Thus, targeted rural investment should yield economic growth followed by an improvement in income equality. Third, a unit increase in the consumption of family planning and health commodities is respectively associated with 1.3 unit, 1.2 unit and 0.74 unit increase in the agricultural, service and manufacturing production; It further generates 60% more income for the urban-Kigali households than rural households. To sum up, benefits of investing in family planning-health should not be overlooked in terms of improvement in rural employment, agricultural production and poverty reduction.