individual level fiscal incidence analysis using a combination of intrahousehold allocation mechanisms.

We combine data from the 2018/19 Ethiopian Socioeconomic Survey (ESS) with administrative data to conduct a gendered fiscal incidence analysis using the Commitment to Equity (CEQ) methodology. We analyze the gender-differentiated distributional impacts of various taxes and transfers focusing on progressivity, inequality, poverty, and pro-poorness.

The results show that, while the fiscal system is progressive, equalizing, and poverty-reducing, some of its elements promote gender equality better than others. On _progressivity_ , we find that PIT, PSNP transfers, kerosene subsidies, primary and secondary education, and health spending are progressive and have no gender differences. Agricultural income tax, informal taxes, wheat subsidies, and tertiary education are regressive but also have no considerable gender differences. In terms of the _pro-poorness of transfers and subsidies_ , only PSNP transfers and primary education are found to be pro-poor. While PSNP is pro-poor for both genders, primary education is pro-poor only for boys. All other transfers, including wheat and kerosene subsidies, secondary and tertiary education, and health spending are not pro-poor.

The impact of fiscal actions on _inequality_ is mixed. For instance, direct taxes are more equalizing for men and direct transfers more equalizing for women. However, agricultural income tax and informal taxes are not equalizing for either men or women; nor are VAT and excise taxes and wheat subsidies equalizing. For both genders, primary education is equalizing, and secondary and tertiary education are not. Health spending is more equalizing for women.

There are gender differences in the _poverty_ effect of some taxes and transfers. Both direct and indirect taxes increase poverty at different rates. For example, the poverty increasing effect of informal taxes and VAT is higher for women than men. Excise tax increases poverty more for men. The poverty reduction effect due to subsidies and transfers is mixed. Spending on PSNP, primary and secondary education, and health reduced poverty more for women than men. There are no gender differences in the poverty-reducing effect of tertiary education.

In what follows, Section 2 discusses the methods focusing on intrahousehold allocation, commitment-to-equity (CEQ) framework and poverty and inequality measures. Section 3 describes the data and assumptions. Section 4 reports the results and discusses gendered-impact differentials. Section 5 draws conclusions.

# **2. Methods**

The analytical approach begins with presenting the intrahousehold allocation mechanism used to identify individual level income. It then summarizes the commitment-to-equity (CEQ) framework used to analyze the incidence, progressivity, and pro-poorness of the fiscal actions as well as their impacts on poverty and inequality at different income concepts. The fiscal actions in this study cover most of the taxes and government spending items (see Annex 1).

## **2.1. Intrahousehold Allocation**

Availability of sex-disaggregated data on income and expenditures is key to examine genderdifferentiated welfare impacts of fiscal policy. When there are inequalities in intrahousehold 4