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The Mongolian energy sector faces mounting difficulties, with infrastructure dating back to the Soviet era and increasing energy demand surpassing installed capacity. The Government of Mongolia has begun implementing energy sector reforms, including significant increases in electricity tariffs. However, there is a lack of studies assessing the impact of these changes on inflation and household living costs. This study fills this void by estimating the heterogeneous impact of energy subsidy removal on inflation and household living costs using a behavioral microsimulation model based on the Household Socio-Economic Survey and the Input-Output Table data. Our findings reveal that current electricity subsidies disproportionately benefit richer households. The complete removal of these subsidies will impose an additional 3.4 % burden on the poorest decile, compared to 1.8 % on the richest decile, while the average increase in household expenditures will be 2.7 %. Eliminating these subsidies could increase poverty rates and economic inequality. Interestingly, the government's policy of moderately increasing household electricity prices, shifting some of the burden to the industrial sector, and maintaining subsidies for heating and briquettes still imposes a comparable burden on household expenses. Although this policy framework reduces the financial burden on low-income populations, it unfairly impacts the livelihoods of rural populations, particularly herders, who do not benefit from energy subsidies, by fueling overall inflation. To mitigate these adverse effects, we recommend targeted support measures for vulnerable populations.
Abstract: In this study, we estimated the tendency and probability of absolute social mobility in education since the 1940s in Mongolia using a historical data from the Census of 1989, 2000, 2010, and 2020 and measured transitional probabilities and intergenerational persistence. Despite potential sample selection bias, our approach overcomes the existing data limitation that has hampered research on trends in intergenerational mobility in the country. The research ndings suggest that absolute intergenerational mobility has been rising in Mongolia, especially among women. In contrast, mobility for men has been substantially slower. Especially during the rst decade of the transition from the centrally planned to the market economy, the educational mobility for men born between 1975 and 1984 was downward. This educational loss, in turn, hurts men's upward mobility in the labor market. Where people are born strongly aects intergenerational social mobility as well. Between 1940 and 1960, upward intergenerational educational mobility was higher among people born in the capital city and central provinces than in other places. While after 1960, the upward intergenerational educational mobility was higher among people born in the Western and Highland regions than in other areas.
