www.elsevier.com/locate/worlddev
World Development Vol. 30, No. 1, pp. 61±75, 2002
Ó 2001 Elsevier Science Ltd. All rights reserved
Printed in Great Britain
0305-750X/01/$ - see front matter
PII: S0305-750X(01)00094-8
Poverty and Inequality in Bosnia and Herzegovina
After the Civil War
MARCELO BISOGNO
The World Bank, Washington, DC, USA
and
ALBERTO CHONG *
Inter-American Development Bank and Georgetown
University Public Policy Institute, Washington, DC, USA
Summary. Ð By taking advantage of new data we provide the ®rst overview on poverty and
inequality in Bosnia and Herzegovina after the war. We use a household survey commissioned by
the World Bank which, despite limitations, helps shed some light on poverty risk and distribution
of income in the country with respect to three issues: regional variation, ethnic di€erences, and
household characteristics. We ®nd large contrasts between the two entities in the country, the
Federation and Republika Srpska. Ethnic cleansing may have exacerbated the di€erences among
regions, as those poor ethnic minorities with the lowest opportunity cost migrated to regions where
they were the ethnic majority. Remittances appear to play a role in ameliorating poverty.
Inaddition, there are some signs that education may be a factor in preventing poverty. Ó 2001
Elsevier Science Ltd. All rights reserved.
Key words Ð poverty, inequality, ethnicity, remittances, Balkans, displaced
ries of the resources. Urgent situations require
urgent measures.
Against these odds, foreign donors have
begun to reassess their humanitarian ®nancial
commitments especially in light of recent, but
widespread, claims of government corruption
(Bisogno & Chong, 2001). As a result, foreign
assistance has started to decline and it is
expected that allocation of resources will be
further reduced in years to come. Consequently, the key dilemma that policymakers
and international donors now face is how to
better allocate these new incoming resources in
a country where little or no reliable information
exists. Indeed, while it is obvious that the war
altered the economic map of the country, as
1. INTRODUCTION
The extreme economic crisis that Bosnia and
Herzegovina faced right after the end of the
civil war, along with the precarious political
balance that resulted after the signing of the
Dayton Agreement in 1995, brought immediate
attention and quick implementation of a major
donor assistance program. The goals included
the minimization of bottlenecks in all areas of
infrastructure, the provision of basic services in
health, education, and housing, the achievement of minimal living standards for the most
vulnerable, and the establishment of institutions that could help make the transition from
plan to market (World Bank, 1997). In fact,
since the end of the civil war, it has been estimated that more than ®ve billion dollars have
been poured into the country in foreign aid
(Hedges, 1998). Because of the severity of the
situation, these ¯ows were made available to
the country with little or no formal assessment
on the actual needs of the potential bene®cia-
* The
®ndings, interpretations, and conclusions expressed in this paper are entirely those of the authors
and do not represent the views of the World Bank or the
Inter-American Development Bank. Final revision
accepted: 27 August 2001.
61
62
WORLD DEVELOPMENT
physical destruction was heavily concentrated
in factories and other industrial sites, it is less
clear the extent to which the economic collapse
along with the demise of pre-war safety net
mechanisms a€ected the welfare mapping in the
country. Though the conventional wisdom
provides some clues on where and who the poor
are, such intuition may not be reliable especially if targeting is to be applied (Bisogno &
Chong, 2001; Grosh, 1994). In fact, to our
knowledge, there is no formal empirical evidence on the situation of poverty and inequality
in Bosnia and Herzegovina after the civil war.
The limited public resources to carry out a
social assistance program and the reduction in
donor assistance contribute to enhance the
importance of having such evidence, which may
serve as a tool to improve the eciency in the
allocation of resources for social assistance
purposes. A better understanding of poverty
and inequality in Bosnia and Herzegovina will
contribute to improved social policies and will
serve as the basis for tailoring the increasingly
scarce available resources for social assistance.
Such is the basic aim of this paper.
This paper is organized as follows. The next
section presents a basic overview of the economy in the immediate years after the Dayton
Accord. It provides the basic context of our
poverty and inequality analysis. Section 3
introduces the data and the methodology
employed; some weaknesses of the data are also
explained. Section 4 presents poverty and
inequality correlates. In particular, we emphasize on regional, ethnic, and household characteristics. Section 5 concludes and gives a
basic policy agenda.
2. BASIC CONTEXT AFTER THE WAR
Civil war in Bosnia and Herzegovina
followed immediately the declaration of independence at the end of 1991. Out of a pre-war
population of 4.4 million people, by the end of
the war, 250,000 people had died or were
missing, and over 50% of the population had
been internally displaced, or had left the
country. The destruction of housing and
production facilities and the displacement of
large segments of the population resulted in a
dramatic reduction in living standards and a
dramatic increase in poverty levels. 1 Estimates
on the value of the physical destruction and
the loss in gross domestic product vary.
Nevertheless, all estimates concur that the
magnitude of the GDP loss was far above the
loss of any other transition countries, even of
those who su€ered similar wars during their
transition processes. World Bank estimates
cites the loss of GDP ranging from US$8.7
billion in 1991 to US$1.5 billion in 1994
(World Bank, 1998a). Economic activity was
nearly paralyzed, while industrial production
recorded a fall of more than 90% in real terms.
With the resumption of peace in 1995,
economic activity started to recover, albeit
from an extremely low base. Real GDP grew
by an estimated 33% during that year,
although still remained below one-third of its
pre-war level. Despite a decrease of about 23%
in its net population, the per capita GDP in the
country dropped from about US$2,000 in 1990
to an estimated US$500 in 1995 (World Bank,
1999a). The very vertically integrated productive structure of Bosnia and Herzegovina and
the pre-war extensive trade between member
states of the former Socialist Yugoslavia hurt
the performance of the economy after several
of the components of the production network
were damaged and as trade with the other
former republics was brought to a standstill by
the war. The destruction of physical and
human capital left many households without
shelter and essential services, creating a new set
of needs, some of them unknown before the
war. Government assessments regarding the
value of the overall war damages range from
US$50 to 70 billion, while estimates about the
direct damage to the productive capacity of the
country is about US$15±20 billion. Physical
destruction was heavily concentrated in factories and industrial premises a€ecting employment opportunities, contributing to boost
unemployment to levels estimated in late 1996
at between 33% and 45% (World Bank, 1997;
World Bank, 1999a).
Unable to survive by themselves, most of the
population started relying on humanitarian
assistance that began to ¯ow to Bosnia and
Herzegovina in signi®cant amounts. Among
the most dramatic legacies of war, with
important social consequences, is the emergence of groups with special needs. In parallel,
the war altered most of the social protection
mechanisms, and in particular social transfers,
which came to an end. Vast sectors of the
population are now displaced and more than
40% of the labor force are ex-soldiers. As will
be seen below, we provide a basic overview on
how households were a€ected by a broad range
of speci®c post-war problems that contribute to
BOSNIA AND HERZEGOVINA
expanding poverty risks, as well as to increasing
income inequality.
3. DATA SOURCES AND
METHODOLOGY
Until recently, reliable data on Bosnia and
Herzegovina had been quite dicult to obtain.
Though not without problems, a suciently
comprehensive household survey has recently
become available. This survey was carried out
by CIET International in 1997 (Andersson,
1997).While previous CIET surveys in Bosnia
and Herzegovina have focused mainly on food
vulnerability, the particular 1997 survey was
broadened substantially to allow for questions
on detailed sources of income as well as
nonfood consumption. It covers 7,182 households, which represents more than 20,000
individuals in 66 communities, thus including
most regions of the country. In particular, our
survey contains data related to a broad range of
sources of income. These involve income from
main and secondary occupations, including
monetary and in-kind payments, additional
bene®ts, and pensions. In addition, the survey
includes other sources of income such as
remittances from abroad, farm production
sold, or agriculture production used for selfconsumption, and monetary and in-kind
transfers. All these sources of income were
combined at the household level and adjusted
by a regional price index. The price index was
normalized at average prices of the Federation.
In other words, all incomes are expressed at the
average purchasing power of the Federation. In
general, this degree of comprehensiveness
provides a rich database and allows for potential analysis on issues that have not been
possible to study in the country beforeÐfrom
basic welfare indicators, to analysis of regional
di€erences, links between labor markets, and
war-speci®c social issues in the country, among
several others.
The survey also has some problems. For one,
it does not allow a construction of a reasonable
consumption aggregate. In other words, it does
not contain the kind of detailed information
about household consumption patterns necessary to estimate an absolute poverty line. This
latter requires an estimate of the absolute minimum level of consumption, income, or expenditure required to sustaining existence (Atkinson
& Micklewright, 1992). 2 Instead, in this paper
we use a relative line as we de®ne poverty using
63
per capita income relative to appropriate groups.
Regardless of whether the individual has enough
resources to sustain existence, she is deemed
poor if her income, consumption, or expenditures are signi®cantly lower than the rest of her
community. Unlike the other case, the relative
poverty line will increase as the society grows
richer, making dynamic comparisons dicult
(Ravallion, 1992). 3
A second issue to consider is that, in general,
poverty rates are sensitive to assumptions made
about economies of scale due to household size.
In other words, whether we simply count the
number of people in a household, or try to
adjust in some way for the composition and size
of families, there may be an impact on the
measurement of poverty. In our study we are
left with the option of either ignoring possible
economies of scale or choosing an arbitrary but
generally accepted adjustment coecient for
example, the OECD scale, applied in several
transition economies studies (Grootaert &
Braithwaite, 1998). We choose an adjustment
coecient of 0.75, which is a middle ground
between assuming no economies of scale and
OECD's 0.5 adjustment coecient. This means
that in order to achieve the same welfare of a
single person spending US$1, a family of three
would have to spend only US$2.3 and a family
of four US$2.8. But, had we simply counted the
number of people in a family and used a per
capita measure, we would not necessarily have
gotten a di€erent incidence of poverty as we
follow a relative approach to de®ning who is
poor. 4
Finally, in spite of its comprehensiveness, a
few areas in Republika Srpska were not
surveyed due to transportation problems and
security reasons. The exclusion of these mostly
war-torn communities may have biased the
sample, as the lower part of the distribution
may not be adequately represented. The design
of this survey does not allow for the calculation
of sampling errors of con®dence intervals,
which may give a better assessment on the
reliability of the data (Klugman & Braithwaite,
1998). Clearly, the best we can do, given the
available information, is to base our estimates
on per capita incomes and be mindful of the
shortcomings noted above.
4. POVERTY: WHERE, WHO, AND WHY
Similar to other studies on transition economies (World Bank, 1997; World Bank, 1998a;
64
WORLD DEVELOPMENT
Table 1. Bosnia and Herzegovina poverty indicators (in percentage)
Poverty measures (%)
Extreme poverty
Poverty
Poverty incidence
Poverty gap
Severity of poverty
Average shortfall of the poor
11.5
4.4
2.5
41.5
27.3
11.1
6.7
44.1
Average per capita income (in DM)
44.3
88.7
Source: Authors' calculations. The headcount index shows the percentage of individuals falling below the poverty
line. The poverty gap index sums all the poverty gaps in the population, that is, the amount of money needed to bring
all the poor up to the poverty line as a share of income. The severity index gives greater weight to those furthest from
the poverty line (Klugman & Braithwaite, 1998). Poverty line is calculated at 30% of the median of per capita income.
Extreme poverty line is calculated at 60% of the median of per capita income.
World Bank, 1998b) in this paper we construct
two relative poverty lines; the ®rst one drawn at
30% of the median of per capita income and the
second one drawn at 60% of the median of per
capita income.Table 1 shows our basic poverty
results using these two lines. The headcount
index or poverty incidence shows the percentage of individuals in the population falling
below the poverty line. The poverty gap
measure sums all the poverty gaps in the
population, that is, the amount of income
needed to bring all the poor up the poverty line,
as a share of total income (Klugman & Braithwaite, 1998). The severity of poverty index
gives a larger weight to those individuals (or
households) furthest from the poverty line
(Ravallion, 1992). According to our survey,
27.3% of the population is considered poor,
and 11.5% fall under the category of ``extremely'' poor.
(a) Poverty and inequality by regions
Figure 1 provides a basic visual description
of entity and regional subdivisions in the
country. As a result of the Dayton Accord,
Bosnia and Herzegovina was set up as a single
sovereign state composed of two Entities, a
Federation, divided into 10 cantons, and the
so-called Republika Srpska, comprised of two
main regions. Entity di€erences in living
standards are large, with a poverty incidence
in Republika Srpska 2.4±2.8 times higher than
that of the Federation, as shown in Table 2.
Indeed, while the poverty rate in the Federation reaches 21.5%, it reaches 51.9% in the
Republika Srpska. Likewise, the extreme poor
represent 24.1% in the latter, but only 8.1% in
the Federation. Worse, poverty in Republika
Srpska is much deeper and more severe than in
the Federation. Our results for speci®c regions
are also presented in Table 2. We ®nd that the
area around Pale is the poorest in the
Republika Srpska. According to our numbers,
Posavina is the poorest canton in the Federation. This last is consistent with the fact that
the area has received signi®cant ¯ows of
refugees after the end of the war. Unsurprisingly, this canton also has the highest rate of
unemployment in the country (World Bank,
1999a). On the other hand, the canton with the
lowest poverty rate is Western Herzegovina
with 4.1%. Western Bosnia, Tuzla, and Sarajevo also appear to fare relatively better than
the rest of the country in terms of poverty
measures.
When we analyze relative income by quintiles, the di€erences are also rather striking.
This is shown in Table 3. At the national level
the average income for the ®rst quintile is
deutsche marks DM (deutche marks) 39.38,
for the second quintile, DM95.81, for the third
quintile DM149.39, for the fourth DM227.44,
and for the ®fth quintile DM503.67. The top
10% of the population receives one-third of the
income of the country, while the bottom 50%
of the population receives barely above 20% of
the total income. The above is re¯ected in the
fact that the per capita income Gini coecient
of the country is 0.45, which ranks close to the
highest among transition economies (Milanovic, 1998). 5 In general, the distribution of
income has worsened dramatically with respect
to the pre-war conditions, in particular, given
the fact that the pre-independence Bosnia and
Herzegovina was organized as a relatively
egalitarian society. In fact, it is remarkable
that the pre-war Gini in the country was about
0. 26. 6
Relative income di€erences are very dramatic
at the entity and regional level, too. As with the
poverty measures, income inequality in the
BOSNIA AND HERZEGOVINA
65
Figure 1. Map of Bosnia±Herzegovina.
66
WORLD DEVELOPMENT
Table 2. Bosnia and Herzegovina poverty indicators by entity and selected cantons (in percentage)
Poverty risk
Cantons
Posavina
Tuzla-Podrinje
Zenica-Doboj
Gorazde
Central Bosnia
Neretva
Western Herzegovina
Sarajevo
Western Bosnia
Federation
Pale
Banja Luka
Republika Srpska
Bosnia and Herzegovina
Depth of poverty
Severity of poverty
Extreme
poor
Poor
Extreme
poor
Poor
Extreme
poor
Poor
8.5
9.0
5.7
6.8
7.7
5.9
4.1
6.0
5.1
8.6
24.9
23.6
24.1
11.5
27.4
21.0
22.6
23.1
22.8
16.6
7.8
15.1
19.0
21.5
59.3
47.6
51.9
27.3
4.8
4.2
2.1
2.2
2.9
1.9
1.1
2.2
2.3
10.7
8.9
7.5
8.9
8.6
5.6
3.3
5.9
6.5
12.6
11.2
7.1
7.2
8.4
5.5
3.5
8.4
7.4
18.4
17.0
12.4
13.0
14.3
11.3
8.9
12.8
12.8
7.6
9.1
23.0
21.8
11.7
14.4
20.1
22.6
Source: Authors' calculations based on CIET household survey (Andersson, 1997). Income includes: Wage and nonwage earnings, compensations, pensions, remittances from abroad, income from cash handout program, food aid,
assistance from international organizations and the imputed value of own agriculture production. No assessment for
public services has been done, nor estimates for the imputed value of the services of durable or owner-occupied
housing, subsidized housing, or housing received as compensation associated to a job. Poverty line is calculated at 30%
of the median of per capita income. Extreme poverty line is calculated at 60% of the median of per capita income.
Table 3. Bosnia and Herzegovina relative income by entity and selected cantons (in percentage)
Average income per quintile
(as a share of average income of region)
Posavina
Tuzla-Podrinje
Zenica-Doboj
Gorazde
Central Bosnia
Neretva
Western Herzegovina
Sarajevo
Western Bosnia
Federation
Pale
Banja Luka
Republika Srpska
1
2
3
4
5
23.51
20.12
28.81
29.77
22.13
30.07
25.29
29.68
24.34
22.37
19.81
15.02
16.67
54.83
48.06
56.59
61.82
48.92
60.37
53.46
60.00
50.96
38.52
34.68
25.89
35.89
82.30
70.86
79.41
84.57
76.97
86.13
81.20
83.64
71.31
76.64
56.52
60.54
58.16
121.36
106.39
112.27
109.49
117.59
124.31
116.85
115.74
104.71
113.55
90.55
95.86
95.05
211.52
253.58
221.85
211.36
233.76
198.47
219.59
209.97
243.39
235.37
292.29
292.90
292.27
Theil index
Gini index
0.237
0.382
0.249
0.213
0.300
0.189
0.315
0.217
0.355
0.315
0.649
0.624
0.635
0.379
0.457
0.381
0.353
0.422
0.340
0.391
0.358
0.437
0.420
0.534
0.545
0.543
Source: Authors' Calculations based on CIET household survey (Andersson, 1997). Income in Deutsche Marks.
Income includes: Wage and non-wage earnings, compensations, pensions, remittances from abroad, income from
cash handout program, food aid, assistance from international organizations and the imputed value of own agriculture production. No assessment for public services has been done, nor estimates for the imputed value of the
services of durable or owner-occupied housing, subsidized housing, or housing received as compensation associated
to a job. Inequality indices are closer to zero when incomes are more equally distributed.
Republika Srpska is much higher than in the
Federation. Pale and Banja Luka, the two main
regions in Republika Srpska have the most
unequal distribution of income in the country.
On the other hand, Neretva, Sarajevo, and
Gorazde are the less unequal cantons in the
Federation. These wide regional disparities
appear to be linked with the outcomes of the
war and its sequels. In fact, some of the regions
that appear to be doing relatively well, such as
the southwestern cantons of the Federation,
were not among the wealthiest when part of the
former Socialist YugoslaviaÐquite the
contrary.
BOSNIA AND HERZEGOVINA
At least, four factors may have played a role.
First, there was major physical destruction
caused by the war, which, as described above,
unevenly a€ected di€erent regions of the
country, as some areas were more industryoriented than others. Second, there was a large
displaced population, which, according to our
estimates account for 26% of the population in
the Federation, and 31% of the population in
the Republika Srpska (27% of the country).
Third, there are di€erences in the amount of
international assistance ¯owing to di€erent
parts of the territory, and in particular to each
of the two entities. Indeed, as of 1997, the
Federation had received preferential treatment
from the international donor community
which, given its magnitude, may have helped
create large income di€erences between the two
entities. 7 Fourth, there are external links with
neighboring countries that may have bu€ered
some of the negative impact of the war in some
of the regions. For instance, trade with Croatia,
historically a commerce partner, may help
explain the welfare of areas such as Western
Herzegovina, Neretva, and Western Bosnia, all
three cantons who coincidentally have Croatmajority population, and thus, close ties with
the country. In this regard, foreign remittances
appear to have played an extremely important
role. More than one-third of the coecient of
variation of income inequality and poverty
rates are explained by remittances from abroad.
While two-thirds of the coecient of variation
is linked with total earnings, roughly one-third
of such coecient is linked with remittances
from abroad. Between total income and foreign
remittances, roughly 95% of the coecient of
variation is explained. 8 On the other hand,
some cantons are relatively isolated from other
regions. For instance, one of the poorest
cantons in the Federation, Gorazde, is
surrounded by Serb neighbors and have little
territorial connection with the rest of the
Federation (see Figure 1). Ethnic cleansing may
have played a role, too.
(b) The ethnic dimension
Bosnia and Herzegovina were probably the
most diverse of the republics of the former
Socialist Republic of Yugoslavia in terms of
ethnic composition. Although mostly populated by an ethnic group referred to here as
Bosniacs, there were several other ethnic
groups concentrated in di€erent areas of the
territory, mainly Serbs and Croats, in this
67
order. Of the 4.4 million people living in the
country before the war, 43% were Bosnians,
31% were Serbs and 17% were Croats. They are
all of Slavic origin but profess di€erent religions. Croats are, in general, Roman Catholics,
Serbs are Orthodox, and Bosniacs tend to be
Muslims. Before the war these groups were
somewhat integrated, in particular in the
biggest cities where interethnic marriages were
common (Hall, 1998). Serbs were the majority
along a wide arc of western Bosnia, and also in
parts of eastern Herzegovina, and eastern
Bosnia along the border with Serbia. Croats
were a predominant majority in western Herzegovina, while Bosniacs were concentrated in
central and eastern Bosnia, and central Herzegovina. The above is, nevertheless, a very
rough description. The reality was far more
complex. In fact, although some regions were
dominated by certain ethnic groups, the ethnic
integration was not rare until the war (Hall,
1998). 9
The new ethnic map of the country looks
regionally far less integrated than in the past.
According to our survey, Serbs are now almost
94% of the population of the sampled territory
of Republika Srpska. Similarly, either Bosniacs or Croats populate more than 97% of the
territory of the Federation. Even within the
cantons of the Federation the concentration of
ethnic groups is very high. In no canton of the
Federation do ethnic groups except Bosniacs
and Croats represent more than 5.5% of the
population. The highest concentration of Serbs
in the Federation is in Gorazde, where they
are, nevertheless, only 4.4% of the sampled
population, followed by Sarajevo where 3.4%
are Serbs. Within the Federation, Croats are
the majority in the western cantons of Western
Herzegovina, Western Bosnia and Neretva
where they represent 99%, 91% and 69% of the
population, respectively. Croats are also an
important minority in Posavina, a canton in
the border with Croatia with no territorial
connection with the rest of the Federation
(37%) and in Central Bosnia (36.6%). The rest
of cantons in the Federation are numerically
dominated by Bosniacs. Table 4 presents some
simple crosstabulations between the main
ethnic groups in the country and measures of
poverty incidence. At the national level, the
group with the lowest risk of poverty is
the Croat ethnic group while the one with the
highest risk of poverty is the Serb ethnic
group. At the entity level, Croats have the
lowest poverty risk in the Federation and,
68
WORLD DEVELOPMENT
Table 4. Bosnia and Herzegovina poverty indicators by ethnic group (in percentage)
Share of
population
Extreme poor
Poverty risk
Poor
Extreme poor
Poverty share
Poor
Bosnia and Herzegovina
Bosniacs
Croats
Serbs
Others
Total
58.8
21.1
19.4
1.1
100.0
10.2
4.5
23.0
13.0
11.5
25.0
12.6
49.7
31.5
27.3
51.8
8.2
38.7
1.3
100.0
53.7
9.7
35.3
1.3
100.0
Federation
Bosniacs
Croats
Serbs
Others
Total
71.8
25.3
1.9
0.9
100.0
10.2
4.2
5.7
8.9
8.6
25.0
11.9
17.1
21.9
21.5
85.4
12.4
1.3
1.0
100.0
83.5
14.0
1.5
1.0
100.0
Rep Srpska
Bosniacs
Croats
Serbs
Others
Total
1.3
3.0
93.8
1.9
100.0
15.2
15.6
24.5
21.4
24.1
39.1
36.7
52.6
51.4
51.9
0.8
1.9
95.6
1.7
100.0
0.9
2.1
95.0
1.9
100.0
Source: Authors' Calculations based on CIET household survey (Andersson, 1997). Income in Deutsche Marks.
Income includes: Wage and non-wage earnings, compensations, pensions, remittances from abroad, income from cash
handout program, food aid, assistance from international organizations and the imputed value of own agriculture
production. No assessment for public services has been done, nor estimates for the imputed value of the services of
durable or owner-occupied housing, subsidized housing, or housing received as compensation associated to a job.
Inequality indices are closer to zero when incomes are more equally distributed. Poverty line is calculated at 30% of the
median of per capita income. Extreme poverty line is calculated at 60% of the median of per capita income.
along with the Bosniacs, also face the lowest
poverty risk in the Republika Srpska. But,
Bosniacs are the ones with the highest incidence of poverty in the Federation, where they
are the vast majority. Similarly, Serbs have the
highest incidence of poverty within Republika
Srpska, where they are also the majority. This
is consistent with the fact that the distribution
of income of Bosniacs in the Federation is
worst among ethnic groups and the distribution of income of the Serbs in the Republika
Srpska is worst among ethnic groups, too.
Table 5 shows Gini coecients and the
distribution of relative incomes per quintiles of
the main ethnic groups in Bosnia and Herzegovina. Not only do the Croats have the
Table 5. Bosnia and Herzegovina relative incomes by ethnic group (in percentage)
Average income per quintile
(as a share of average income of ethnic group)
Bosniac
Croat
Serb
Other
1
2
3
4
5
22.15
25.86
16.59
16.73
53.16
53.45
35.88
37.63
78.07
79.47
58.85
76.70
112.57
115.05
97.25
122.75
233.69
225.58
291.26
237.07
Theil index
Gini index
0.304
0.291
0.617
0.340
0.416
0.398
0.539
0.453
Source: Authors' calculations based on CIET household survey (Andersson, 1997). Income in DM. Income includes:
Wage and non-wage earnings, compensations, pensions, remittances from abroad, income from cash handout
program, food aid, assistance from international organizations and the imputed value of own agriculture production.
No assessment for public services has been done, nor estimates for the imputed value of the services of durable or
owner-occupied housing, subsidized housing, or housing received as compensation associated to a job. Inequality
indices are closer to zero when incomes are more equally distributed. Poverty line is calculated at 30% of the median
of per capita income. Extreme poverty line is calculated at 60% of the median of per capita income.
BOSNIA AND HERZEGOVINA
highest average income, but they also have the
lowest inequality. On the other hand, the Serbs
have the lowest average income and the highest inequality. One would expect that the
ethnic majority would do better in the territory
where they are, indeed, a majority. This
apparent puzzle may have an explanation.
Given the high geographical mobility of the
population during the war that resulted in a
very high degree of displacement (both internal and international), coupled with the wellknown ethnic problems involved in the
con¯ict, it seems reasonable to believe that
those who chose not to leave their original
place of residence in which they were an ethnic
minority, did so because they were doing
relatively well, either because they had assets
that were very illiquid or because they managed to preserve a job. 10 On the other hand,
those who were poor and belonged to a
minority might have had no reason to stay in
an ethnically hostile environment and consequently chose to leave. Poor Serbs may have
ended up in the Republika Srpska, while poor
Bosniacs in the Federation. This may have
worsened the distribution of income inside
each entity as well as increased the poverty
risk, depth, and severity, of the cantons.
Though more research on this issue would be
advisable, a basic indication on the above is
the fact that the average income of the
displaced is less than DM140, which is the
lowest average income when compared with
the average income of educational, gender,
and even ethnic groups. In short, from the
point of view of ethnic groups the answer to
the question, ``who are the poor in Bosnia and
Herzegovina?'' appears to be quite straightforward. In the Federation roughly 85% of the
poor are Bosniacs while in Republika Srpska,
95% of the poor are Serbs. The policy of
``ethnic cleansing'' appears to have succeeded,
either directly or more likely indirectly, in
isolating ethnic groups from one another.
Given the fact that the process of ethnic
cleansing in this country has geographically
displaced households along ethnic lines, it is
not really surprising that both a canton and an
ethnic group yield the lowest and highest
income inequality or poverty index.
(c) Poverty and household characteristics
As recent studies suggest, key determinants
of poverty risk, depth, and severity, and income
inequality in Bosnia and Herzegovina, appear
69
to be some characteristics of the household
such as the level of education of its members,
employment status, type of employment,
gender, and earnings (World Bank, 1999a). In
fact, households with an unemployed head face
the greatest risk of being poor (43% in Bosnia
and Herzegovina) followed by households with
an inactive head (30%). This ®nding applies in
the two entities (the Federation and Republika
Srpska) and for the poor and the extreme poor.
The poverty risk falls by 82% in the case of the
extreme poverty line (69% with respect to the
poverty line), when the head of household is
employed rather than unemployed. In fact, the
poverty risk falls from 31.2% when the head of
household is unemployed to 5.7% when he or
she is unemployed, according to the lower line
and from 57.1% to 17.7% when the higher line
is used. This drop is even more dramatic in the
Federation than in Republika Srpska where the
employment status of the head of household
appears to be relatively less important in terms
of protecting the household against poverty
(World Bank, 1999a). Households with inactive
heads are less likely to fall under poverty than
those households with unemployed heads.
Given the high dependency ratios found among
the surveyed population, however, the highest
share of poor belongs to households headed by
inactive persons. In fact, roughly 38% of the
poor live in a household headed by an inactive
head. As dependency ratios are higher in the
Federation than in Republika Srpska, this
contributes to a higher share of poor under an
inactive head in the former (about 45%) than in
the latter (28%).
The role of education appears to be very
in¯uential in preventing people from falling
into poverty. This is suggested in Table 6.
While the noneducated face an extreme poverty
incidence of 21%, such risk decreases the
highest the educational achievement. Thus, the
poverty incidence for those with primary,
secondary, and post-secondary education falls
to 19%, 10%, and 8%, respectively. A similar
pattern is observed with respect to extreme
poverty. 11 Moreover, notice in Table 6 that
individuals employed in state-owned enterprises, socially-owned enterprises, and the
government face higher poverty risks than
the ones employed in the private sector and the
self-employed sector. This ®nding is important
for several reasons. For one, it may re¯ect the
fact that the economy is, indeed, in transition
from plan to market. The three sectors of
employment that are expected to disappear, are
70
WORLD DEVELOPMENT
Table 6. Bosnia and Herzegovina poverty indicators by characteristics (in percentage)
Share of
population
Extreme poor
Poverty risk
Poor
Extreme poor
Poverty share
Poor
Educational level
No education
Primary
Secondary
Post-secondary
Total
3.5
19.1
57.6
10.8
100.0
20.8
19.0
10.1
7.7
11.4
41.7
38.6
26.5
17.2
27.2
6.4
31.7
50.7
7.2
100.0
5.4
27.1
56.2
6.8
100.0
Sector employment
Private ®rm
Socially owned
Government
Public enterprise
Self-employed
Others
Total
31.8
6.3
25.3
29.9
3.5
3.2
100.0
2.6
8.2
2.8
8.0
1.2
0.0
4.5
9.9
15.0
10.6
24.6
4.9
1.6
14.3
18.2
11.5
15.8
53.6
1.0
0.0
100.0
22.0
6.6
18.7
51.2
1.2
0.3
100.0
Source: Authors' calculations based on CIET household survey (Andersson, 1997). Income in DM. Income
includes: Wage and non-wage earnings, compensations, pensions, remittances from abroad, income from cash
handout program, food aid, assistance from international organizations and the imputed value of own agriculture
production. No assessment for public services has been done, nor estimates for the imputed value of the services
of durable or owner-occupied housing, subsidized housing, or housing received as compensation associated to a
job. Inequality indices are closer to zero when incomes are more equally distributed. Poverty line is calculated at
30% of the median of per capita income. Extreme poverty line is calculated at 60% of the median of per capita
income.
those that face the highest poverty risk. Such
poverty risk is highest for public enterprises,
and not as high for the government sector for in
the long run. It may be expected that the
former will disappear, but the latter will be
reduced only, though drastically. Even more
interesting is the fact that the private ®rm
sector has one of the lowest poverty risks,
which is consistent with this transition
hypothesis. Moreover, the fact that the selfemployed sector has both the lowest poverty
and extreme poverty risk may be an indication
that in the future such a sector may not just be
a ``survival'' sector, but an ``engine of growth''
sector. Similar ®ndings have been obtained in
developing countries when analyzing the
di€erences between the formal and self-employed sector in the context of structural
reform (Saavedra & Chong, 1999). Table 7
further explores the idea that household characteristics may have a bearing on welfare
outcomes in Bosnia and Herzegovina. Once
again, there appear to be some signs of the
increasing role of education in determining
income inequality. The higher the educational
attainment, the lower the di€erentials of
incomes as expressed by both the Gini and the
Theil coecients. In fact, it has been shown
that education acts not by widening inequality
between education groups, but by increasing
inequality within all education groups (World
Bank, 1998a).
5. SUMMARY AND CONCLUSIONS
In this paper we have provided an overview
of issues related with poverty and inequality in
Bosnia and Herzegovina after the war. To do
this, we have taken advantage of a new
household survey which, despite limitations,
sheds light on the situation of the country, in
particular with respect to three issues: regional
variation, ethnic di€erences, and household
characteristics. We found that the contrasts
between the two entities in the country, the
Federation and Republika Srpska, are very
large, the latter being poorer and more unequal
than the former. Moreover, di€erences inside
entities appear to be large, too. Three factors
may explain this outcome: the uneven physical
destruction; the di€erences in international
assistance, and the formal and informal links
with neighboring countries, in particular,
Croatia. Indeed, remittances from abroad
appear to be particularly important. We ®nd
that while two-thirds of the coecient of variation is linked with total earnings, roughly one-
BOSNIA AND HERZEGOVINA
71
Table 7. Bosnia and Herzegovina relative income by characteristics (in percentage)
Average income per quintile
(as a share of average income)
Average
income
Education
No education
Primary
Secondary
Post-secondary
Other characteristics
Male-headed
Ex-soldier
Private sector
Theil index
Gini index
1
2
3
4
5
143.96
189.34
247.67
279.40
17.74
19.63
22.07
24.55
40.80
47.54
50.68
56.43
73.71
74.00
75.64
82.18
111.36
110.54
113.90
118.08
251.41
248.18
237.16
217.95
0.380
0.381
0.317
0.251
0.467
0.451
0.425
0.384
324.66
191.39
254.76
19.98
18.20
23.45
48.29
46.16
48.77
74.97
74.15
80.90
112.91
112.61
113.65
243.57
248.80
251.00
0.356
0.382
0.256
0.442
0.456
0.395
Source: Authors' calculations based on CIET household survey (Andersson, 1997). Income in DM. Income includes:
Wage and non-wage earnings, compensations, pensions, remittances from abroad, income from cash handout
program, food aid, assistance from international organizations and the imputed value of own agriculture production.
No assessment for public services has been done, nor estimates for the imputed value of the services of durable or
owner-occupied housing, subsidized housing, or housing received as compensation associated to a job. Inequality
indices are closer to zero when incomes are more equally distributed.
third of such coecient is linked with remittances from abroad (see Appendices A and B).
The process of ethnic cleansing, by which a
large percentage of the population ended up
displaced, may have exacerbated the di€erences among regions, as the poor ethnic
minorities with the lowest opportunity cost
may have migrated to regions where they were
the ethnic majority. Increased inequality and
poverty rates may have followed. The postwar geographical arrangement of the di€erent
ethnic groups points toward an signi®cant
isolation of the groups from each other. This
re-mapping of ethnic groups will certainly
have to be taken into consideration in the
planning of social policies. If this picture of
relative ethnic isolation is to remain in the
near future, as it is expected, at least in the
medium run, it will certainly impose important
constraints to the geographical mobility of the
labor force, limiting the supply of labor
response to regional shocks. The geographical
dispersion of poverty rates and the di€erences
in the distribution of income found in the
survey also point to a low degree of mobility
of the labor force, and con®rms similar ®ndings related with the labor markets (World
Bank, 1999a).
There are, however, some encouraging signs.
Along with anecdotal observations in the
country, there is more solid evidence suggesting
that the situation in the country may be
improving. The reconstruction program in
Bosnia and Herzegovina has provided a
signi®cant boost to the economy, resulting in
income growth rates averaging 30% over the
past ®ve years, albeit from an extremely low
base. The revamp of the economy allowed for
an increase in real per capita consumption.
Many schools and health clinics have reopened, and the main infrastructure networks
have been largely rehabilitated. Improved
conditions for the return of refugees and the
displaced has led to an increasing number of
minority returns. But, despite rapid economic
recovery the national product is still only at
about 50% of its prewar level; living standards
for many Bosnian families remain low; and the
country remains the second poorest in the
Southeast Europe region, on a per capita
basis. 12
Perhaps one of the key challenges in Bosnia
and Herzegovina in the near future will have to
do with how to reach the poorest most e€ectively. A ®rst step is the creation and implementation of solid institutions that could
provide e€ective service delivery to the neediest. This is a very dicult task. It has been
shown that although the impact of better
governance will eventually translate into
signi®cant reduction of poverty and a reduction of income inequality, the process may not
be without pain (Chong & Calder
on, 2000).
The second step is to use better targeting in
order to increase eciency in service delivery.
Grosh (1994); Bisogno and Chong (2001), and
others have shown that a little targeting may go
a long way in helping reach the neediest. This
72
WORLD DEVELOPMENT
work may be a step in that direction. In addition, better data in the future will allow more
in-depth studies on issues related to the
relationship between con¯ict, dislocation, and
poverty and inequality in the country, and on
their causes. Hopefully, we have taken a step
forward toward a better understanding of those
issues.
NOTES
1. Poverty in Bosnia and Herzegovina is not a new
phenomenon; it rose with the economic crises that hit the
former Socialist Federal Republic of Yugoslavia
(SFRY) in the early 1980s and even began to rise as
early as the 1970s. But, it was not until the war that
income plummeted and jobs were lost in a way incomparable to any other post-World War II event (World
Bank, 1998a).
2. In the economic context of the country we acknowledge the fact that the use of a relative poverty line may
somewhat weaken our ®ndings. This because a large
fraction of the GDP of the country has been destroyed.
3. In general, consumption or expenditure is preferred
to income because it is usually better-reported in
household surveys. In addition, they re¯ect permanent
income more adequately (Deaton & Muellbauer, 1980).
In the case of transition economies, this last argument is
particularly important, as income volatility and unreliability of data tend to be high (Grootaert & Braithwaite,
1998).
4. In fact on a per capita basis, the poverty rate we ®nd
would have been 27.8% instead of 27.3%, and 11.7%
instead of 11.5% when using the two poverty lines
described in the next section. On the other hand by using
an adjustment coecient of 0.5, the poverty rates would
have been 27.2% and 11.2%, respectively.
5. For the sake of comparison, consider that the
average per capita income Gini coecient was 0.33 in
18 transition economies, with Russia (0.48), the Ukraine
(0.47), and the Kyrgyz Republic (0.55) being the most
unequal (Milanovic, 1998).
6. As calculated using the 1990 household survey from
the former Yugoslavia by identifying corresponding
cantons to what today is Bosnia and Herzegovina
(Bisogno & Chong, 2000).
7. Foreign aid has been progressively balanced
after the time of the ®eldwork of our household
survey. Bisogno and Chong (2001) explore the link
between foreign aid targeting and poverty in more
detail.
8. We provide a formal analysis of the role of
remittances on poverty in Appendices A and B.
9. Ideally, a detailed comparison of how ethnic di€erences have evolved before and after the war would be
particularly valuable. Lack of data, however, makes this
impossible to do this rigorously.
10. We obtain similar ®ndings when studying unemployment rates by ethnicity and entity. Bosniacs show
the highest rates of unemployment within the
Federation, and Serbs show the highest rates of
unemployment within Republika Srpska (World Bank,
1999a).
11. An important caveat is that our household
survey is simply a recent ``picture'' of the situation in
Bosnia and Herzegovina, but it does not re¯ect
the ``steady-state'' or long-run equilibrium, of the
country.
12. Authors' estimates based on country data collected
during trips to the country.
REFERENCES
Andersson, N. (1997). Food security assessment in Bosnia
and Herzegovina: The 1997 vulnerability survey.
Mexico City: CIET International.
Atkinson, A., & Micklewright, J. (1992). Economic
transformation in Eastern Europe and the distribution
of income. Cambridge, UK: Cambridge University
Press.
Bisogno, M., & Chong, A. (2000). Determinants of
income inequality in Bosnia and Herzegovina. Wash-
ington, DC: Development Research Group, The
World Bank.
Bisogno, M., & Chong, A. (2001). Foreign aid and
poverty in Bosnia and Herzegovina: Targeting
simulations and policy implications. European Economic Review, 45, 1020±1030.
Chong, A., & Calder
on, C. (2000). Institutional quality
and income distribution. Economic Development and
Cultural Change, 48(4), 761±786.
BOSNIA AND HERZEGOVINA
Deaton, A., & Muellbauer, J. (1980). Economics and
consumer behaviour. Cambridge, UK: Cambridge
University Press.
Grootaert, C., & Braithwaite, J. (1998). Poverty correlates and indicator-based targeting in Eastern Europe
and the Former Soviet Union. Policy Research
Working Paper 1942, The World Bank,Washington,
DC.
Grosh, M., 1994. Administering targeted social programs
in Latin America: From platitudes to practice. World
Bank Regional and Sectoral Studies, World Bank,
Washington, DC.
Hall, B. (1998). The impossible country. New York:
Norton.
Hedges, C. (1998). Bosnia's peace dividend: Hatred for
everyone. The New York Times on the Web, http://
www.nytimes.com/library/review/archive.
Klugman, J., & Braithwaite, J. (1998). Poverty in Russia
during the transition: An overview. The World Bank
Research Observer, 13(1), 37±58.
Milanovic, B. (1998). Income, inequality, and poverty
during the transition from planned to market economy.
World Bank Regional and Sectoral Studies, World
Bank, Washington, DC.
Ravallion, M. (1992). Poverty comparisons: A guide to
concepts, and methods. LSMS Working Paper 88,
The World Bank, Washington, DC.
Saavedra, J., & Chong, A. (1999). Structural reform,
institutions, and earnings: Evidence from the formal
and informal sectors in urban Peru. Journal of
Development Studies, 35(4), 95±116.
World Bank (1997). Bosnia and Herzegovina: From
recovery to sustainable growth. World Bank Country
Study, Washington, DC.
World Bank (1998a). Country economic memorandum:
Georgia. Europe and Central Asia Department, The
World Bank, Washington, DC.
World Bank (1998b). The World Bank's experience with
post-con¯ict reconstruction (Vol. 2, Bosnia and
Herzegovina Case Study). Operations Evaluation
Department, Washington, DC.
World Bank (1999a). Bosnia and Herzegovina 1996±1998
lessons and accomplishment: Review of the priority
reconstruction program. World Bank, Washington,
DC.
73
FURTHER READING
Collier, P. (1999). On the economic consequences of civil
war. Oxford Economic Papers, 51, 168±183.
De Melo, M., Denizer, C., & Gelb, A. (1995). From plan
to market: Patterns of transition. Washington, DC:
World Bank, Policy Research Department.
Foster, J., Greer, J., & Thorbecke, E. (1994). A class of
decomposable poverty measures. Econometrica, 52,
571±576.
Fox, W., & Wallich, C. (1997). Fiscal federalism in
Bosnia±Herzegovina: The Dayton challenge. Policy
Research Working Paper 1714, The World Bank,
Washington, DC.
Glenny, M. (1996). The fall of Yugoslavia: The third
Balkan war. New York: Penguin Books.
Institute of Statistics of Bosnia and Herzegovina (various years). Statistical data on economic and other
trends.
Milanovic, B. (1990). Poverty in Poland, Hungary, and
Yugoslavia in the years of crisis 1978±1987. Policy
Research Working Paper 507, World Bank, Washington, DC.
Milanovic, B. (1998a). Explaining the increase in inequality during the transition. Policy Research Working
Paper 1935, World Bank, Washington, DC.
Posarac, A. (1990). Social transfers in the Former
Yugoslavia, 1978±1989. The World Bank, Washington, DC.
Roberts, B. (1995). Price liberalization market power and
social welfare in transition economies. Florida:
University of Miami.
Statistical Institute, Republika Srpska (various years).
Monthly statistical review.
Sudetic, C. (1998). Blood and vengeance: One family's
story of the war in Bosnia. New York: W.W. Norton.
Woodward, S. (1995). Balkan tragedy. Brookings Institution, Washington, DC.
World Bank (1996). World Development Report 1996:
From plan to market. New York: Oxford University
Press.
World Bank (1999b). Labor market conditions in postwar Bosnia and Herzegovina. Europe and Central
Asia Region, The World Bank, Washington, DC.
APPENDIX A. ON REMITTANCES FROM ABROAD AND POVERTY
As mentioned in the text, an important
consequence after the civil war in Bosnia and
Herzegovina was the displacement of a large
percentage of the population. Many people
migrated not only internally, but a considerable
number of individuals also left the country. A
large proportion of the total income received by
households comes from remittances from
abroad. In this appendix we explore whether
remittances are determined by particular
factors that may exacerbate income di€erentials
among households. To do this, we use a simple
multinomial logit approach. We construct a
categorical dependent variable that takes that
re¯ects the following categories: ``household
receives remittances from abroad and is below
the extreme poverty line,'' ``household receives
remittances from abroad and is above the
extreme poverty line,'' and ``households that do
not receive remittances'' (results are similar
when using a poverty line calculated at 30% of
the per capita income median). We present the
corresponding multinomial logit estimates in
Tables 8 and 9 (marginal e€ects). The base
74
WORLD DEVELOPMENT
category is households that do not receive
remittances from abroad.
Unsurprisingly, we ®nd that the gender of the
head, the level of schooling of the members of
the household, the percentage of members
unemployed, the percentage of household
members working in the private sector, and
regional variables (Republika Srpska) are
statistically non signi®cant explanatory variables of our regressions. These variables will not
increase (or decrease) the probability of receiving remittances from abroad, regardless of the
income situation of the household. On the other
hand, our results indicate that the size of the
household increases the chances of receiving
remittances from abroad when the income of
the household is below the poverty line. These,
perhaps as a consequence of increasing chances
of having one or more family members migrate.
As expected, however, size of household
decreases the chances of receiving remittances
when above the line, as wealthier households
possibly require less economic attention from
those family members that migrate. Similarly,
the fact that the head of the household is a
refugee or an ex-soldier increases the probability of receiving remittances when below the
poverty line, and are linked with decreased
chances of receiving them when above the line.
As seen in the text, this ®nding is consistent with
the fact that these two groups have the largest
proportion of displaced.
APPENDIX B
Table 8. Bosnia and Herzegovina multinomial logits for remittances from abroad a
Lower than extreme poverty line
Republic Srpska
Head refugee
Head soldier
Head Male
Head schooling
Head age
Head private worker
Family schooling
% Family unemployed
% Family private
Family size
Constant
0.1288 ns
(0.095)
0.1382
(0.081)
0.1566 ns
(0.096)
)0.0502 ns
(0.107)
0.0004 ns
(0.013)
)0.0076
(0.003)
)0.1493 ns
(0.097)
0.0122 ns
(0.020)
0.2214 ns
(0.210)
0.0829 ns
(0.286)
0.0863
(0.035)
)1.7521
(0.244)
Higher than extreme poverty line
0.0296 ns
(0.095)
)0.2317
(0.082)
)0.1625
(0.098)
0.0671 ns
(0.091)
0.0243
(0.012)
)0.0154
(0.003)
)0.2571
(0.104)
)0.0293 ns
(0.020)
)0.1036 ns
(0.243)
)0.3150 ns
(0.318)
)0.4740
(0.043)
0.5293
(0.227)
ns: nonsigni®cant.
a
Same speci®cation as in Table 2. Obs: 6,536. LR v2 (87): 2613.21. Prob> v2 : 0.000. Pseudo R2 : 0.101. Standard
errors in parenthesis. Extreme poverty line is calculated at 60% of the median of per capita income (DM88.7). Base
category: households that do not receive remittances from abroad.
*
Signi®cant at the 1% level.
**
Signi®cant at the 5% level.
***
Signi®cant at the 10% level.
BOSNIA AND HERZEGOVINA
75
Table 9. Bosnia and Herzegovina multinomial logits for remittances from abroad marginal e€ects a
Do not receive
Republic Srpska
Head refugee
Head soldier
Head male
Head schooling
Head age
Head private worker
Family schooling
% Family unemployed
% Family private
Family size
Constant
)0.0152 ns
(0.014)
0.0105 ns
(0.012)
0.0017 ns
(0.014)
)0.0021 ns
(0.015)
)0.0025 ns
(0.002)
0.0023
(0.000)
0.0403
(0.015)
0.0018 ns
(0.003)
)0.0104 ns
(0.034)
0.0242 ns
(0.045)
0.0401
(0.006)
0.1116
(0.035)
Lower than extreme
poverty line
0.0139 ns
(0.011)
0.0197
(0.009)
0.0205
(0.011)
)0.0068 ns
(0.012)
)0.0004 ns
(0.001)
)0.0006
(0.000)
)0.0122 ns
(0.011)
0.0019 ns
(0.002)
0.0267 ns
(0.023)
0.0150 ns
(0.032)
0.0182
(0.004)
)0.2063
(0.027)
Higher than extreme
poverty line
0.0012 ns
(0.011)
)0.0302
(0.010)
)0.0222
(0.012)
0.0089 ns
(0.011)
0.0029
(0.001)
)0.0017
(0.000)
)0.0281
(0.012)
)0.0037 ns
(0.002)
)0.0164 ns
(0.029)
)0.0392 ns
(0.038)
)0.0583
(0.005)
0.0948
(0.027)
a
Marginal e€ects based on Table 8. Obs: 6536. LR v2 (87): 2613.21. Prob> v2 : 0.000. Pseudo R2 : 0.101. Standard
errors in parenthesis. Extreme poverty line is calculated at 60% of the median of per capita income (88.7 DM). Base
category: households that do not receive remittances from abroad.
*
Signi®cant at the 1% level.
**
Signi®cant at the 5% level.
***
Signi®cant at the 10% level.