Determinants of household economic welfare in Uganda

Abstract

This study examines the determinants of household economic welfare in Uganda using cross sectional data from the 2019/2020 Uganda National Household Survey (UNHS). In this study, welfare is measured by household income. Income was chosen because it directly reflects a household’s ability to meet its needs and is widely used in welfare analysis, even though it does not capture all dimensions of welfare. Both descriptive and regression analyses were applied to identify the demographic, social, and structural factors associated with welfare outcomes. The findings show that education is the most significant determinant, with additional years of schooling and attainment of higher levels linked to improved household income. Marital instability, particularly widowhood and divorce, is associated with lower welfare, highlighting household vulnerability in such contexts. The results also show significant regional and rural-urban income gaps, with rural households consistently earning less than their urban counterparts. Household size is positively associated with welfare, which may reflect pooled labor contributions by more household members. Employment shows a negative association with welfare, likely because most jobs are informal and poorly paid, limiting their contribution to household welfare. Land ownership by itself is not linked to better welfare outcomes, indicating that its effect depends on productive use. The study concludes that improving household welfare requires prioritizing practical solutions that build directly on the findings. Expand access to secondary education through bursaries and incentives to improve completion, raising returns from informal and agricultural work by supporting farmer cooperatives, vocational training, and small-scale value addition and narrowing rural income gaps by improving feeder roads and rural electrification. In addition, strengthening existing social protection programs such as cash transfers and livelihood support would help households facing income shocks from widowhood or divorce. These measures build on interventions Uganda is already pursuing, but my study highlights where they should be strengthened to directly target household welfare.