Low access to employment

than the average household head and tends to be self-employed or work in agriculture. According to 2018 data, differences in household demographic composition (based on the number of children) account for about 18 percent of total inequality. The per capita consumption level of households with fewer than three children below age 15 is, on average, 1.8 times higher than that of households with 5 children or more.

This suggests that efforts to reduce the fertility rate and catalyze the demographic transition would contribute to an acceleration of poverty reduction. Similarly, differences between households due to the employment sector of the household head account for about 16 percent of total inequality. Households headed by someone who works in the services and industry sectors have average consumption levels about 1.7 times and 1.5 times higher, respectively, than households headed by a worker in agriculture, an indication that a faster transition of labor to more productive sectors (such as, services and industry) would foster income growth and poverty reduction. This transition should consider regional disparities, as high spatial inequalities can exacerbate social tensions and fragility and impede inclusive growth and shared prosperity. Indeed, differences between urban and rural areas account for about 14 percent of total inequality, and inequality between geographic locations accounts for about 10 percent.

The COVID-19 pandemic is expected to lead to an increase in inequality. Data from the first (May–June 2020) and third (January–February 2021) rounds of the high frequency survey show that the share of households from the lowest income quintile that lost a part of their total income increased by 10 percentage points during the six-month period, higher than the 3 percentage point increase for households in the highest quintile. The decline in households’ total income was partly due to a reduction in the frequency and level of remittances, particularly for households in the poorest quintile. As a result, the disparity in income between rich and poor households is projected to continue to widen, leading to an increase in inequality.

LOW ACCESS TO EMPLOYMENT

Despite relatively high rates of employment, most workers are employed in lowskill occupations,9 while youth constitute most of the country’s unemployed and discouraged workers.10 More than 73 percent of the country’s total population ages 15 years and older are active in the labor force. Of the active population, only 0.92 percent are included in the International Labour Organization’s strict definition of unemployment, which excludes discouraged workers. Including discouraged workers, the country’s hidden unemployment rate increases to an estimated 2.6 percent, as the proportion of discouraged workers is much higher than the unemployed who are actively seeking work. Youth constitute most discouraged workers and the unemployed, which signals the lack of opportunities and the limited capacity of the private sector to absorb new entrants into the labor market.

Self-employment and jobs with relatively low productivity dominate employment in Chad. More than 90 percent of the employed population is either self-employed or employed by households, while employment in higherskill occupations is exceedingly low—only an estimated 3 percent of the employed population works in managerial positions or as employers, and 1.7 percent works as skilled laborers (figure 1.22). The dominance of