Impacts of civil war on labour market outcomes in Northern Uganda: Evidence from the Northern Uganda Panel Survey. By Ibrahim Kasirye

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1 Impacts of civil war on labour market outcomes in Northern Uganda: Evidence from the Northern Uganda Panel Survey. By Ibrahim Kasirye Economic Policy Research Centre, Plot 51 Pool Makerere University P. O. BOX 7841, Kampala, UGANDA And Geofrey Okoboi Economic Policy Research Centre, Plot 51 Pool Makerere University P. O. BOX 7841, Kampala, UGANDA Abstract 1. Introduction/Background Armed conflicts have adverse impacts on economic growth and the welfare status of households. Some of the worst effects of armed conflicts are manifested in labour market outcomes. Children who have experienced violent conflicts are associated with poor nutritional status and this can compromise their lifetime labour productivity (Alderman et al., 2006; Bundevoet et al, 2009). Households and states that have experienced civil unrest have fewer investment resources and this affects self employment prospects (Deininger, 2003; Collier, 1999). On the other hand, individuals forced in armed conscription have lower post war earnings (Annal et al., 2009). Also, individuals who have experienced civil strife are less likely to actively participate in the labour market (Kondylis, 2008). Indeed, there is now recognition that conflicts are the leading constraint to the attainment of the Millennium Development Goals (MDGs). According to the 2011 World Development Report, that assessed the impacts of conflict on development, fragile and conflict affected states account for 77% of the children not in primary school and 70 % of infant deaths (World Bank, 2010). For 20 years, Uganda experienced a civil war in the North and Northeast part of the country. The conflict whose origins were precipitated by Uganda s historical welfare divide i.e. the marginalised north prosperous south divide (Gersony, 1997), was mainly fought between the national army the Uganda People s 1

2 Defence Forces (UPDF) and the Lord s Resistance Army (LRA) the principal rebel group. In addition to rebel insurgencies, Northeastern Uganda also experienced armed cattle rustling perpetuated by the Karamoja ethnic group. One of the hallmarks of the civil war was the displacement of large sections of the population into Internally Displaced Person s (IDP) camps. By 2005, at least 1.8 million persons (about 20% of the population in Northern Uganda) were resident in 200 camps (Office of the Prime Minister, 2006). In the camps, majority of the population depended on international relief agencies for daily sustenance. Apart from displacement, public infrastructure such as schools and health centres were routinely interrupted and closed due to fears of rebel s abductions. At the peak of rebel insurgency, at least 87% of communities that experienced rebel activity reported school closures (Ssewanyana et al, 2006). The major conflict ended in 2006 with the initiation of peace talks between the rebels and government. After the signing of the peace accord, the IDP camps were closed in September 2007 and households returned to their former homesteads. In order to minimize the adverse impacts of the civil war, the Government of Uganda (GoU) created a number of special purpose vehicles to provide safety nets to the war affected population. These included the Northern Uganda Recovery Program (NURP I) operational during period and the Northern Uganda Social Action Fund (NUSAF I; ) and NUSAF II ( ). Also immediately after cessation of hostilities, the Government of Uganda initiated the Peace Recovery and Development Program (PRDP) for Northern Uganda in Initial assessments of the impacts of cessation of armed hostilities point to a large and significant peace dividend. For instance, the national household surveys show that incidence of poverty in Northern Uganda reduced from 61% to 46% between 2005/06 and 2009/10 (Uganda Bureau of Statistics, 2010). However, the reduction in the incidence of poverty was accompanied by increases in income inequality within Northern Uganda. Nonetheless, there is limited understanding of the short and long term impacts of the civil war on the labour market outcomes in Northern Uganda. For instance, it is important to know what types of employment opportunities are available to returning IDPs. It is also important to know how the disruption of key social services during the civil war (e.g. schooling) affected the labour market outcomes for the youth in Northern Uganda. As highlighted by Blattman and Miguel (2010) understanding such impacts of violent conflicts is critical to designing effective post recovery interventions. There have been previous assessments of the impacts of the Northern Uganda civil war on welfare outcomes (see e.g. Deininger, 2003; Ssewanyana et al., 2006; Annan et al., 2006). However, most of the prior studies have focused on the social impacts of the war notably schooling and health status. Only the study by Annan et al., (2006) focuses on labour market issues in the region even then, this particular study focuses on the select group i.e. ex combatants. In the present study, we use a representative panel dataset for Northern Uganda conducted during and after the war, to examine the impacts of the civil war on labour market outcomes. In particular, we investigate the following questions: (1) What types of jobs are people engaged in post conflict Northern Uganda?; (2)What was the impact of the civil war on post war labour participation and occupational choices? ; (3) Were the impacts of the civil war on labour participation and occupation choice similar for women and men?; and (4) How did the disruption of schooling during the civil war impact on labour participation by the youth? 2

3 Examining the labour dynamics in Northern Uganda is of critical policy relevance. First, it is important to understand if there were changes in the sector of employment for former IDPs. Previous assessments in the region showed an increase in poverty in the sub region during due to movement of labour in agriculture (Ssewanyana et al., 2006). Consequently, it is important to know if there were changes in the sector of employment after the civil war. Secondly, during the civil war, the household economy in Northern Uganda heavily depended on child labour (Ministry of Finance, Planning, and Economic Development, 2002) and as such, it is important to know whether the situation changed after the end of the war. Finally, the current National Development Plan ( ) recognizes the limited access to education in post conflict areas (Government of Uganda, 2010); it is important to know how low education attainment has affected labour market participation and occupation choice for households in Northern Uganda. 2. Data and Methods We utilise the panel dataset from the Northern Uganda Survey (NUS) covering 18 districts of Uganda. The dataset was collected by the Uganda Bureau of Statistics (UBoS) and the main objective was to provide indicators for the evaluation of the NUSAF social action fund. The first wave conducted between July and December 2004 and covered 4,787 households comprising 25,667 individuals. The second wave was conducted during August 2008 January 2009 and covered 3,583 households all from the original 2004 sample. 1 Both samples provide representative estimates at the district level. The NUS surveys were modeled along the lines of the multi topic World Bank s Living Standards Measurement Surveys (LSMS) and contain a standard socioeconomic and community module. In addition to the standard modules, the 2008 survey included a qualitative module. Both surveys were based on a two stratified random sampling procedure. In the first stage, enumeration areas (EAs) based on the 2002 Census as the sampling frame were the principal sampling unit (PSU). In the second stage, 10 households were randomly selected from each EA. Unlike prior Uganda National Household Surveys (UNHS)s, the 2004 NUS survey was able to cover the Acholi sub region which was the epicentre of the Northern Uganda civil war. In addition, the panel survey interviewed for the first time households resident in IDP camps. The NUS surveys unlike the regular UNHS captured detailed information on household shocks and shock responses some retrospectively, over the period. Specific shocks included: rebel raids; experience of abduction; migration, and deaths of household members. This information was collected both at household and community levels. The other information captured relate to household demographics; economic activity status of individuals within the household; household consumption; and community access to social infrastructure. 1 The relatively high attrition rate between the two waves is explained by cessation of hostilities which precipitated the resettlement of former IDPs. The resettlement process hampered efforts to track surveyed households especially households previously resident in IDPs. Indeed, at least 45% of the households could not be re interviewed because they had either shifted to another village or unknown location (Office of the Prime Minster, 2009). Nonetheless, other panel datasets in Africa also report high attrition rates more so in non conflict environments. For instance, the Kenyan Life Panel Survey ( ) had an attrition rate of 15 % (Baird et al. 2008). 3

4 With regard to labour market activities, the panel surveys collected information on activity status during the past 7 days for all persons aged 5 years and above. Specific information collected included: the type of activity, the sector of employment; and the mode of payment for employees. For individuals not working, the surveys inquire the reasons for inactivity. At the community level, information was collected on the presence of a major factor or other sources of employment within 10kms of the village centre. We use proposensity score matching (PSM) to examine how residence in internally displaced camps (IDP) affected labour outcomes. In particular, we assume IDP residence in 2004 as a treatment and look at the labour market outcomes in 2008 and establish how previous presence in the camps affected labour market prospects in The two main outcomes considered are labour force participation and change in the nature of occupation. 3. References Alderman, H., J. Hoddinot, and B. Kinsey (2006) Long term consequences of early childhood malnutrition. Oxford Economic Papers Vol. 58. No.3: Annan, J., C. Blattman, D. Mazurana, and K. Carlson. (2009) Women and Girls at War: Wives, Mothers, and Fighters in the Army. Households Lord s Resistance in Conflict Network Working Paper 63. Annan, J., C. Blattman, and R. Horton (2006). The State of Youth and Youth Protection in Northern Uganda: Findings from the Survey for War Affected Youth. Kampala, Uganda: UNICEF Baird, S., J. Hamory, and E. Miguel (2008), Tracking, Attrition and Data Quality in the Kenyan Life Panel Survey Round 1 (KLPS 1). Working Paper No. C08, 151 Centre for International and Development Economics Research, University of California, Berkeley). Blattman, C and E. T. Miguel (2010) Civil War. Journal of Economic Literature Vol. 48. No.1: 3 57 Bundervoet, T., P. Verwimp, and R. Akresh. (2009) Health and Civil War in Rural Burundi. Journal of Human Resources, 44(2): Collier, P (1999) On the Economic Consequences of Civil War. Oxford Economic Papers, 51. No.1: Deininger, K. (2003). Causes and Consequences of Civil Strife: Micro Level Evidence from Uganda. Oxford Economic Papers, 55: Gersony, R. (1997). The Anguish of Northern Uganda: Results of a field based Assessment of the civil conflict in Northern Uganda. Submitted to USAID Mission, Kampala. Government of Uganda (2010) National Development Plan 2010/ /15 (Kampala: National Planning Authority) Kasirye, I and S. Ssewanyana (2010) Impacts and determinants of panel survey attrition: The case of Northern Uganda Survey Economic Policy Research Centre (EPRC) Research Paper No.74 Kondylis, F (2008) Conflict displacement and labour market outcomes in post war Bosnia Herzegovina Household in Conflict Network Working Paper No. 45. Ministry of Finance Planning and Economic Development (2002), Challenges and Prospects for Poverty Reduction in Northern Uganda, Discussion Paper #5, Kampala. Office of the Prime Minster (2006) Northern Uganda Social Action Fund: Impact Evaluation (Kampala: Office of the Prime Minster). Ssewanyana, S., S.D. Younger, and I. Kasirye (2006) Strengthening the understanding of the dynamics of 4

5 poverty in Northern Uganda. A research report submitted to the World Bank Uganda country office. Uganda Bureau of Statistics (2010) The 2009/10 Uganda National Household Survey: Socioeconomic report (Kampala: Uganda Bureau of Statistics). World Bank (2010) World Development Report 2011: Conflict, Security, and Development (Washington DC: The World Bank). 5