Does corruption affect income inequality and poverty?

This paper provides evidence that high and rising corruption increases income inequality and poverty. An increase of one standard deviation in corruption increases the Gini coefficient of income inequality by about 11 points and income growth of the poor by about 5 percentage points per year. These findings are robust to use of different instruments for corruption and other sensitivity analyses. The paper discusses several channels through which corruption may affect income inequality and poverty. An important implication of these findings is that policies that reduce corruption will most likely reduce income inequality and poverty as well. Received: March 2, 2000 / Accepted: September 20, 2001     

Macroeconomic Adjustment and the Poor: Analytical Issues and Cross‐Country Evidence

Abstract.  This paper studies the links between macroeconomic adjustment and poverty. The first part summarizes some of the recent evidence on poverty in the developing world. The second reviews the various channels through which macroeconomic policies affect the poor, whereas the third is devoted to the specific role of the labor market. It presents an analytical framework that captures some of the main features of the urban labor market in developing countries and studies the effects of fiscal adjustment on wages, employment, and poverty. The fourth part presents cross‐country regressions linking various macroeconomic and structural variables to poverty. Higher levels and growth rates of per capita income, higher rates of real exchange rate depreciation, better health conditions, and a greater degree of commercial openness lower poverty, whereas inflation, greater income inequality, and macroeconomic volatility tend to increase it. Moreover, the impact of growth on poverty appears to be asymmetric; it seems to result from a significant relationship between episodes of increasing poverty and negative growth rates.     

Corruption, economic growth, and income inequality in Africa

This paper uses panel data from African countries and a dynamic panel estimator to investigate the effects of corruption on economic growth and income distribution. I find that corruption decreases economic growth directly and indirectly through decreased investment in physical capital. A unit increase in corruption reduces the growth rates of GDP and per capita income by between 0.75 and 0.9 percentage points and between 0.39 and 0.41 percentage points per year respectively. The results also indicate that increased corruption is positively correlated with income inequality. The combined effects of decreased income growth and increased inequality suggests that corruption hurts the poor more than the rich in African countries. Received: March 19, 2001 / Accepted: December 14, 2001 RID="*" ID="*" An earlier version of this paper was presented at the first AmFiTan International Conference on Development Ethics in February 2000, Dar er Salaam, Tanzania. I thank two anonymous referees of this Journal for helpful suggestions. I am, however, solely responsible for any remaining errors.     

Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries

This study extended the concept of ‘growth–inequality–poverty (GIP) triangle’ by using the principle component approach which allows us to composite different poverty and inequality indicators into one single index that contains most of the useful information from the original dataset. Using the idea of GIP triangle, this study examines the long-run relationship among weighted poverty index (which comprises headcount ratio, poverty gap and squared poverty gap); weighted inequality index (i.e., Watts Index, Gini Index and MLD Index) and average monthly per capita income in the designated 138 countries according to World Bank’s classification over a period of 2005–2010. The data set mainly contain countries’ unit record household survey at least one which is conducted between the countries during the sample period. The regression model encompassing the impact of economic growth and income inequality on poverty reflects that income inequality increases poverty while economic growth decreases poverty. It indicates that the impact of inequality in increasing poverty is a somewhat greater than that of growth in average income in reducing overall poverty in a sample countries. The other regression model encompassing the impact of economic growth and poverty on income inequality showed that the poverty itself is also likely to be a barrier for poverty reduction; and inequality seems to predict lower future growth rates. The final regression model depicting the impact of poverty and income inequality on mean income of the household suggests that poverty itself reduces mean income of the household while income inequality increases economic growth. The results are interesting and simply suggest that whenever social institutions malfunction, the incidence of damage would usually be distributed unevenly over the society’s members.     

Mobility and the dynamics of poverty in Iran: Evidence from the 1992–1995 panel survey

In the last three decades, revolutionary Iran has experienced large shocks to its political and economic system with likely effects on poverty, inequality, and economic mobility. While poverty has declined, inequality has remained relatively high and stable over nearly four decades. In this paper, for the first time, we examine poverty and inequality in a dynamic context using a 4-year panel data, collected during 1992–1995. We show that short-term income mobility is relatively high, which helps mitigate persistent high inequality. We offer a range of estimates of transition probabilities, indicating that, for example, someone in the lowest (highest) quintile has between 25% and 50% chance of moving up (down) the income ladder. Focusing on the dynamics of poverty, we distinguish between short- and long-term poor and between chronic and transient poverty. Surprisingly, we find that chronic poverty is a more serious problem in urban than rural areas, while transient poverty is geographically more uniformly distributed. Finally, using Tobit and quantile regression, we examine the correlates of these two types of poverty. Both chronic and transient poverty are higher for households headed by women and by younger and less educated men. While minorities suffer more from transient poverty, they are less likely to be chronically poor. We discuss the implications of these findings for policy to alleviate chronic and transient poverty.     

REGIONAL ECONOMIC INTEGRATION AND ITS IMPACTS ON GROWTH, POVERTY, AND INCOME DISTRIBUTION: THE CASE OF INDONESIA

Indonesia continually tries to open its economy through free trade areas (FTAs) on bilateral, regional, and multilateral bases. This paper discusses the impacts of FTAs on the Indonesian economy, particularly for economic growth, poverty, and income distribution. By using a Global Computable General Equilibrium (GCGE) model, we conducted the simulation analysis by setting eighteen scenarios for the ongoing and potential FTAs of different frameworks. Indonesia is found to benefit from joining in FTAs, except for the FTA with India. It is also implied that FTAs increase rural household income at higher rates than they increase urban household income. Moreover, FTAs' impacts are more favorable for unskilled workers than for skilled ones, and also for relatively poor households more than for rich households, both in urban and rural areas. In brief, FTAs provide Indonesia with income redistribution effects.     

The Effect of Income Distribution on the Ability of Growth to Reduce Poverty: Evidence from Rural and Urban African Economies

The present study examines the extent to which income distribution affects the ability of economic growth to reduce poverty, based on 1990s data for a sample of rural and urban sectors of African economies. Using the basic‐needs approach, an analysis‐of‐covariance model is derived and estimated, with the headcount, gap, and squared gap poverty ratios serving as the respective dependent variables, and the Gini coefficient and PPP‐adjusted incomes as explanatory variables. The study finds that the responsiveness of poverty to income growth is a decreasing function of inequality, albeit at varying rates for the three poverty measures: lowest for the headcount, followed by the gap and fastest for the squared gap. The ranges for the income elasticity in the sample are estimated at: 0.02–0.68, 0.11–1.05, and 0.10–1.35, respectively, for these poverty measures. Furthermore while, on average, the responsiveness of poverty to income growth appears to be the same between the rural and urban sectors, there are substantial sectoral differences across countries. The results suggest the need for country‐specific emphases on growth relative to inequality.     

收入差距、社会资本与居民贫困

研究目标：分析收入差距与社会资本及其交互作用对居民贫困的影响,并探讨两者的影响机制。研究方法：构建Logit等计量模型,并采用三阶段最小二乘法（3SLS）与工具变量法（IV Probit）进行稳健性检验。研究发现：在社区层面上,收入差距导致了教育与财政资源在区县间的配置不均等,阻碍了医疗保险制度的发展以及产业结构的提升,进而提高了居民的贫困发生率;在个体层面上,收入差距降低了居民对教育资源的可及性,恶化了居民的健康水平,从而导致居民进入贫困状态。社会资本能够降低居民发生贫困的概率,同时也能够缓解收入差距对居民贫困的不利影响;提升就业能力与收入水平、增加教育与医疗投资、改善社会经济地位、强化融资能力等是社会资本缓解贫困的主要渠道与机制。研究创新：采用具有代表性的中国家庭追踪调查数据,研究收入差距与社会资本对居民贫困的作用机制,指出社会资本是缓冲收入差距对居民贫困不利影响的重要保障。研究价值：为相关理论研究提供更多的经验证据和路径解释;在实践中,对减贫、防贫具有指导意义。     

Evaluating the impacts of the COVID-19 pandemic on unemployment,income distribution and poverty in Turkey

In the recent World Economic Outlook, the IMF indicates that world output shrank by 3.5% in 2020. Despite all pessimistic expectations, the Turkish economy was one of the few countries to have a positive, albeit low, economic growth rate in 2020. This was, however, achieved at the expense of high social and economic costs. The present research examines the distributional costs of this economic growth during the pandemic and suggests economic measures required to control them. The empirical examination is based on generating unavailable income and living conditions for 2020 by using the results available in TurkStat’s 2017 Income and Living Conditions Survey. The actual changes in sectoral output and employment, which are available as of March 2021, are used to generate changes in the income levels of households in TurkStat’s 2017 survey. The research empirically shows that adequate fiscal support with a large scope for households and businesses is necessary to compensate for economic losses caused by the pandemic. The short-run working allowance policy appears to have been very important to improve income distribution, which might have deteriorated due to the pandemic. Direct cash support to households is considered another essential policy measure that is required to mitigate the severity of increased poverty.     

Why do the poor live in cities? The role of public transportation

More than 19 percent of people in American central cities are poor. In suburbs, just 7.5 percent of people live in poverty. The income elasticity of demand for land is too low for urban poverty to come from wealthy individuals' wanting to live where land is cheap (the traditional explanation of urban poverty). A significant income elasticity for land exists only because the rich eschew apartment living, and that elasticity is still too low to explain the poor's urbanization. The urbanization of poverty comes mainly from better access to public transportation in central cities.     

Urban Poverty,Segregation and Social Networks in São Paulo and Salvador,Brazil

General consensus exists concerning the relevance of networks and space in poverty situations, despite a considerable dispute on the prominence of each element. While social‐support and poverty debates highlight the joint importance of space and networks, the research agenda on contemporary communities suggests that networks have recently started replacing space in social integration. These debates mainly consider networks and ties normatively and are restricted to the global North, hampering the formulation of comparative interpretations and more theoretical conclusions. This article discusses the relationship between space, sociability and poverty, based on research results on networks of poor individuals in two major Brazilian metropolises—Salvador and São Paulo. Research indicates the existence of great heterogeneity in the networks of poor individuals, although with substantial differences, on average, to middle‐class individuals. Certain types of networks and sociability are systematically associated with better living conditions, employment and income. Additionally, network mobilization by individuals presents important regularities associated with social mechanisms, understood as regular patterns that trigger or cause certain results. These mechanisms explain to a great extent the heterogeneity of networks, and mediate the individual's access to opportunities and everyday assistance. They therefore contribute decisively to the production (and reproduction) of urban poverty.     

CEO贫困出身、薪酬激励与企业风险承担

本文利用2007—2017年沪深A股上市公司数据,考察CEO的贫困出身对企业风险承担的影响,并基于薪酬异质性和薪酬公平性两个维度进一步探究薪酬激励在其中的调节作用,研究发现：（1）CEO的贫困出身显著抑制企业风险承担,表现出风险规避型性格特征;（2）将薪酬激励细化为股权激励和货币薪酬,非国有企业中,股权激励显著提高贫困出身CEO的风险承担意愿,而高额的货币薪酬则显著加剧贫困出身CEO的风险规避倾向,但国有企业贫困出身CEO的风险承担意愿与薪酬激励不存在显著相关关系;（3）基于薪酬公平性视角,非国有企业中,贫困出身CEO的薪酬总额低于行业平均水平越多,其风险承担意愿提升越显著,但若其薪酬总额高于行业平均越多,则会显著加剧其风险规避倾向,并且这种效应不存在于国有企业样本中。上述结论在考虑内生性影响后依然稳健。     

Competitive Pressure on the Indian Households: A General Equilibrium Approach

How would competitive pressure impact upon the income distribution and the poverty of household groups? We analyse the gains in efficiency and productivity due to competitive pressure, and its distributional effects using a general equilibrium input–output framework. Efficient utilization of the available resources, technical progress and free trade constitute our sources of growth. Welfare would increase under competition, but the income distribution would become more skewed. Rural household groups would stand to lose relative to the urban ones. Urban poverty would be reduced significantly more than rural. In fact, the agricultural worker would even suffer from an increase in poverty. The study shows that competitive pressure has a positive effect on efficiency, productivity and poverty, but an adverse effect on the income distribution in the Indian economy.     

Teen employment, poverty, and the minimum wage: Evidence from Canada

In May 2007, the U.S. Congress enacted legislation, which increased the Federal minimum hourly wage from $5.15 to $7.25, over a two year time period. This increase to the minimum wage was the first in nearly a decade and was approved with the objective of alleviating poverty among low-income households. However, a higher minimum wage may result in more unemployment and poverty. We exploit time-series variation in minimum wages set by Canadian provinces between 1981 and 2004. OLS and IV results suggest that a 10% increase in the minimum wage is significantly correlated with a 3%-5% drop in teen employment. Further, a 10% rise in the minimum wage is also significantly associated with a 4%-6% increase in the percentage of families living under Low Income Cut Offs (LICOs). Difference-in-difference estimates from the 1993, 1995, and 1998 waves of the Survey of Consumer Finances (SCF) support these findings as they suggest that income earned by teens constitutes a non-trivial portion of household income for families beneath Low Income Cut Offs. Therefore, a higher minimum wage may paradoxically result in a significant negative shock to household income among low-income families.     

REGIONAL ECONOMIC INTEGRATION AND ITS IMPACTS ON GROWTH, POVERTY AND INCOME DISTRIBUTION: THE CASE OF VIETNAM

Trade liberalization and regional economic integration have recently accelerated in East Asia, where several free trade areas have been established or are under negotiation. Vietnam, after acquiring Association of Southeast Asian Nations (ASEAN) membership in 1995, has signed a bilateral trade package with the United States and participated in the China-ASEAN free trade area. This paper attempts to analyze the impact on Vietnam of ongoing regional economic integration, focusing on growth, poverty reduction and income distribution. For this purpose, we have constructed a globally linked Computable General Equilibrium (CGE) model and made use of Global Trade Analysis Project (GTAP) database version 6.0 and Vietnam's living standards surveys. The simulation analysis shows that the regional economic integration generally has a positive impact. It both enhances welfare and improves income-distribution for Vietnam. Household income and consumption increase, and poor and rural household groups benefit more than urban high income groups.     

Extending the Resource‐Based Approach to Livelihoods: An Urban Application to Turkish Gecekondu Households

This article critically examines the existing conceptualizations of and explanations for the socioeconomic behaviour of poor households in order to lay the foundations of a new model designed to extend the existing resource‐based approach to livelihoods. The proposed model groups ‘household responses to poverty’ into four key types: income generation, income allocation, consumption and investment. In explaining household responses and their poverty outcomes, it focuses on the role of different resources beyond income (e.g. social capital), along with the wider structural forces and household characteristics that influence the availability and benefit delivery capacity of these resources. The new model is shown to provide a theoretically more sophisticated framework with greater explanatory power and empirical applicability.     

Neighbors’ income distribution: economic segregation and mixing in US urban neighborhoods

The paper describes within-neighborhood economic segregation in US metropolitan areas in 1985 and 1993. It uses the neighborhood clusters of the American housing survey, standardized by metropolitan area income and household size, to explore income distribution within neighborhoods at a scale much smaller than the census tract (a representative sample of households or ‘kernels’ and their 10 closest neighbors). Joint and conditional distributions portray neighbors’ characteristics conditional on the kernel’s housing tenure, race, and income. The paper documents both significant income mixing in the majority of US urban micro neighborhoods and the extent of income mixing within neighborhoods of concentrated poverty.     

Poverty traps, the money growth rule, and the stage of financial development

This paper investigates how monetary policy influences the emergence of local indeterminacy, local bifurcations, and multiple steady states, depending upon the degree of the commitment parameter that defines financial market imperfection, using Diamond's overlapping generations model with credit market frictions. The analytical results will show that poverty traps happen as an inevitable outcome under a wider range of money growth rates, because financial markets are less developed. Put differently, we derive analytically the positive link between financial development and per capita income.     

Modelling low income transitions

We examine the determinants of low income transitions using first‐order Markov models that control for initial conditions effects (those found to be poor in the base year may be a non‐random sample) and for attrition (panel retention may also be non‐random). The model estimates, derived from British panel data for the 1990s, indicate that there is substantial state dependence in poverty, separate from persistence induced by heterogeneity. We also provide estimates of low income transition rates and lengths of poverty and non‐poverty spells for persons of different types. Copyright © 2004 John Wiley & Sons, Ltd.     

Progress: Poverty or Prosperity?

A bstract . Henry George and Alfred Marshall agreed that prosperity —growth in national income —was necessary but not sufficient to eliminate the poverty both believed impeded the mental and moral development of mankind. This inherent optimism in the potential benefits of economic growth was , however, their only common ground. George asserted that as long as land was privately owned, prosperity would increase poverty; and called for the fiscal remedy of a "single tax" to appropriate land rent. Marshall argued that increased poverty was only a temporary concomitant of growth caused by a population that was too big in numbers but too Low in skills; and advocated "taming" competition by education, charity, thrift , and breeding restraint. This study constructs a joined debate on progress and poverty by aligning the arguments of these two influential authors whose different personalities and personal histories precluded any true communication during their lifetimes.