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Using panel data, this paper analyzes the impact of high inflation on household livelihoods in urban South Sudan. Based on a difference-in-difference approach, inflation is found to have a strong negative impact on urban poverty between 2015 and 2017, mainly driven by the increase of non-food prices. Food price inflation had a negative and statistically significant impact on girls’ primary and secondary school attendance, while proximity to school is very important for girls’ school attendance. Increases in food prices led to a decline in labor force participation, increasing unemployment among urban residents. Inflation is exacerbating food insecurity and hunger, particularly for the poorest households who are more vulnerable to hunger. Inflation has also negatively affected households’ perceptions of welfare. These changes in welfare are mostly explained by the period of near hyper-inflation in 2017. Addressing high inflation must be at the center of efforts to reduce poverty and hunger to improve the welfare of the people of South Sudan. |
