This Policy Research Working Paper examines the impact of public transfers and taxes on the wellbeing of children in Ethiopia. The study uses the Commitment to Equity for Children methodology to analyze the burden of taxation and the benefits of government transfers and spending, and their differential effects on children's wellbeing. The research integrates data from the 2018/19 Ethiopia Socioeconomic Survey with administrative data. The study finds that the Ethiopian fiscal system is, on average, progressive, poverty-reducing, and equalizing, but there are differences in the distribution of some of its elements. The study provides valuable insights into the effectiveness of the Ethiopian fiscal system in promoting child wellbeing and can inform policy decisions to improve the system further.
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