Quantifying Vulnerability to Poverty in Uganda

Robust poverty reduction in Uganda was disrupted by episodes of shocks during recent years. This paper estimates vulnerability to poverty in Uganda and explores the sources and main correlates of vulnerability using the most recent Uganda National Household Survey 2019/20. The analysis reveals that about 50 percent of population in Uganda is vulnerable to poverty. Vulnerability rates are much higher than poverty in rural areas. Urban vulnerability is predominantly risk induced (high volatility of consumption) and mostly associated with idiosyncratic rather than covariate shocks. Rural vulnerability is equally split between risk-induced and poverty-induced vulnerability (permanently low consumption). Although in absolute terms vulnerability due to covariate shocks is still lower than vulnerability due to idiosyncratic shocks, in relative terms covariate shocks are more important in rural areas. Education is found to be one of the key variables related to lower vulnerability to poverty