Economic vulnerability and poverty in Tajikistan

We examine the profile of poverty and vulnerability in Tajikistan using household level panel data for 2004 and 2005. The drop in poverty was largely due to increase in remittances from workers working overseas. Households are more likely to be poor if they live in (a) rural areas, (b) large households, (c) households with a large proportion of children; or are pensioners or live in a household whose head is a pensioner. One half of the households observed to be non-poor are vulnerable to poverty. With expected utility approach, our analysis suggests that vulnerability associated with inequality is very large, whereas that from idiosyncratic risk is moderate. Aggregate shocks have been favorable and reduced vulnerability. We advance several policy recommendations.