The National Statistics Office (NSO) of Mongolia and the World Bank announced December 30, 2021 their joint official poverty rate estimation for 2020. The two organizations have collaborated on poverty measurement based on household consumption surveys since 2002.

According to the 2020 Household Socio-Economic Survey (HSES), the national official poverty rate in 2020 was 27.8 percent [1], 0.6 percentage points lower than in 2018. This translates to about 903.4 thousand people of Mongolia living in poverty in 2020.

Compared to 2018, the urban poverty rate dropped by 0.7 percentage points to 26.5 percent, while the rural poverty rate fell by 0.3 percentage points to 30.5 percent. Among the poor, 64 percent lived in the urban areas in 2020, with 43 percent living in Ulaanbaatar.

While estimates show that poverty in 2020 was slightly lower than it was in 2018, the COVID-19 pandemic has sharply slowed down the pace of poverty reduction. Simulations indicate that in the absence of the pandemic, poverty in 2020 may have been about 3 percentage points lower, suggesting that poverty reduction stalled as a result of the pandemic. The wide array of COVID-19 relief packages, including top-ups on existing social assistance programs, undoubtedly played a crucial role in preventing a rise in poverty between 2018 and 2020.

Table 1 Poverty headcount rate and number of poor, 2018-2020

[1] The 2020 household welfare and official poverty rate were estimated by a survey-to-survey imputation approach (see Annex)

Annex. The poverty estimation methodology for the 2020 Household Socio-Economic Survey

The Household Socio-Economic Survey (HSES) is the official survey for monitoring household welfare and poverty as well as key socio-economic indicators in Mongolia.  The HSES has been implemented biennially since 2012.  Official poverty rates have been reported at the national, urban/rural and aimag level, estimated as a share of the population that has consumption below the national poverty line.

In line with international best practices, changes were introduced to the 2020 HSES consumption module to better reflect current consumption patterns. While these changes improve the accuracy of the consumption measured by the 2020 survey, household consumptions over time are no longer comparable. In order to restore comparability of the 2020 household consumptions and poverty rates to previous survey years, the 2020 poverty rate was simulated based on the SWIFT Plus (“Survey of Well-being via Instant and Frequent Tracking”)[2] survey-to-survey imputation approach. In the SWIFT Plus imputation approach, the 2018 HSES is used to model consumption, and this model is applied to the 2020 HSES data to predict consumption and poverty in 2020. In addition, in order to improve the accuracy of estimates at the aimag level, the model was individually developed by each group of aimags (8 urban groups and 6 rural groups) and poverty was estimated at national, urban and rural, and aimag levels. The 2020 poverty estimation was carried out through a close collaboration and technical support from the World Bank Poverty and Equity Global Practice and SWIFT team.

Going forward, future HSES will adopt the same consumption module as the 2020 survey and a new poverty series will commence with the rebasing of the national poverty line to the 2022 survey.  While rebasing is typically done at the same time as revision of a consumption module, it was decided to postpone the exercise to 2022 due to COVID-19 induced disruptions to field work and consumption patterns.

[2] For more details, please refer to Yoshida, N., Munoz, R., Skinner, A., Lee, C., Brataj, M., Durbin, S.W., and Sharma, D. (2015). “Survey of WellBeing via Instant and Frequent Tracking (SWIFT) Data Collection Guidelines.” Washington, D.C.: World Bank Group. and a forthcoming technical note for Mongolia 2020 poverty estimation.

Source: World Bank Mongolia