The impact of natural disasters on household income,expenditure, poverty and inequality: evidence from Vietnam

Natural disasters are expected exacerbate poverty and inequality, but little evidence exists to support the impact at household level. This article examines the effect of natural disasters on household income, expenditure, poverty and inequality using the Vietnam Household Living Standard Survey in 2008. The effects of a natural disaster on household income and expenditure, corrected for fixed effects and potential endogeneity bias, are estimated at 6.9% and 7.1% declines in Vietnamese household per capita income and expenditure, respectively. Natural disasters demonstrably worsen expenditure poverty and inequality in Vietnam, and thus should be considered as a factor in designing poverty alleviation policies.     

Disentangling the Poverty Effects of Sectoral Output,Prices, and Policies in India

This paper attempts to disentangle the poverty effects of key policy variables that directly affect the poor (namely the government‐led channel of development spending and financing) in both agricultural and non‐agricultural sectors after accounting for the effect of respective sectoral per capita income and prices, using data from India over five decades. The paper emphasizes the sectoral composition of income and prices as mechanisms influencing the level of poverty and establishes empirically that it is the rise in non‐agricultural per capita income that reduces rural poverty via the channel of internal migration, after having controlled for the variation in key components of fiscal spending and monetary/financial policy via the availability of credit. Uneven sectoral growth pattern explains why urban poverty becomes a spill‐over of persistent rural poverty when the agricultural sector shrinks. While checking for robustness, there is evidence that the rise in non‐agricultural income alone may not reduce rural poverty, when measured in terms of rural infant mortality rate as a non‐income indicator of well‐being.     

A Decomposition Analysis of Regional Poverty in Russia

The paper applies a new decomposition technique to the study of variations in poverty across the regions of Russia. The procedure, which is based on the Shapley value in cooperative game theory, allows the deviation in regional poverty levels from the all‐Russia average to be attributed to three proximate sources: per capita income, inequality, and local prices. Contrary to expectation, regional poverty variations turn out to be due more to differences in inequality across regions than to differences in real income per capita. However, when real income per capita is split into nominal income and price components, differences in nominal incomes emerge as more important than either inequality or price effects for the majority of regions.     

PUBLIC PROGRAMS PARE POVERTY: EVIDENCE FROM CHILE

This study examines the effect of government health care and education programs on the poor in Chile from 2000 to 2006. Results are obtained from a country-wide provincial-level panel data set with information on poverty and indigence head-count ratios, measures on the severity of poverty as captured by the Foster–Greer–Thorbecke P ₂ statistic, per capita public expenditures on health and education, as well as other variables that are thought to influence well-being. We use fixed-effects techniques to correct for time-invariant province-specific characteristics that may affect program placement. Our analysis demonstrates that per capita public health and education expenditures significantly reduce the incidence of poverty and indigence in Chile. In particular, for a 10,000 pesos (about $23) increase in provincial per capita health spending, the poverty head-count ratio decreases by 0.48 percent. Per capita education expenditures are particularly important to reducing the severity of poverty. Our results indicate that for a 10,000 pesos increase in education spending, the severity of poverty declines by as much as 1.53 percent. Furthermore, we provide evidence that public spending in Chile is non-random. In particular, government education expenditures may be allocated in keeping with compensatory motives.     

MEASURING NON‐ECONOMIC WELL‐BEING ACHIEVEMENT

Income per capita and most widely reported, non‐ or non‐exclusively income based human well‐being indicators are highly correlated among countries. Yet many countries exhibit higher achievement in the latter than predicted by the former. The reverse is true for many other countries. This paper commences by extracting the inter‐country variation in a composite of various widely‐reported, non‐income‐based well‐being indices not accounted for by variations in income pre capita. This extraction is interpreted inter alia as a measure of non‐economic well‐being. The paper then looks at correlations between this extraction and a number of new or less widely‐used well‐being measures, in an attempt to find the measure that best captures these achievements. A number of indicators are examined, including measures of poverty, inequality, health status, education status, gender bias, empowerment, governance and subjective well‐being.     

收入增长和分配对我国农村减贫的影响-方法、特征与证据

改革开放30年来,在农村居民收入水平快速增长的大背景下,农村减贫进程却表现出明显的波动性和不一致性。基于此,本文在贫困分解的基础上,运用贫困弹性的动态特征,从理论和实证的角度探讨了收入增长和收入分配对贫困减少的影响,解释上述问题。文章发现:(1)人均收入水平越高,贫困越有可能和收入不平等联系在一起;(2)收入不平等越严重的地区,贫困对收入不平等的反应越迟钝;(3)1998年是我国农村反贫困性质发生改变的拐点。文章建议,今后农村反贫困政策的重点应从以促进收入增长的开发式扶贫向以改善收入分配为重点的社会保护式扶贫政策转变。     

Regional convergence of growth,inequality and poverty in India—An empirical study

The paper attempts to examine whether there is regional convergence of per capita consumption, inequality and poverty across various states in India. Using panel unit root tests that are robust to cross-sectional dependence, we find that inequality and poverty indicators converge at both rural and urban levels. Further, per capita consumption converges at urban level but not at rural level. Based on factor analysis, we find two groups of states for rural sectors, viz., low-growth and high-growth states, for each of which per capita consumption converges. We also attempt at identifying the responsible entities — central or state governments or both in cases where convergence is not achieved.     

Income distribution and economic development: Insights from machine learning

We draw upon recent advances that combine causal inferences with machine learning, to show that poverty is the key income distribution measure that matters for development outcomes. In a predictive framework, we first show that LASSO chooses only the headcount measure of poverty from 37 income distribution measures in predicting schooling, institutional quality, and per capita income. Next, causal inferences with post‐LASSO models indicate that poverty matters more strongly for development outcomes than does the Gini coefficient. Finally, instrumental variable estimates in conjunction with post‐LASSO models show that compared to Gini, poverty is more strongly causally associated with schooling and per capita income, but not institutional quality. Our results question the literature's overwhelming focus on the Gini coefficient. At the least, our results imply that the causal link from inequality (as measured by Gini) to development outcomes is tenuous.     

What drives inequality and poverty in the EU? Exploring the impact of macroeconomic and institutional factors

Employing panel data techniques, we investigate the macroeconomic and institutional determinants of inequality and poverty in the EU over the period 1994–2008. We pay particular attention to the effects of macroeconomic environment, social protection and labour market institutions. The empirical analysis shows that the social transfers in cash, and principally the transfers that do not include pensions, exert a prominent impact on inequality and poverty. Also significant is the effect of the GDP per capita. The impact of employment on inequality and poverty is not empirically sound. The same holds for the labour market institutions; an exception is the union density, which appears conducive to a less dispersed personal income distribution. Importantly, the results support the view that the social protection system acts as a catalyst in determining the effectiveness of social spending and the distributive role of economic growth and employment.     

Inequality and income: The mediating effects of social spending and risk

This paper estimates models of social spending, income risk, and per capita income levels using data from a post-war panel of OECD (Organisation for Economic Cooperation and Development) countries. The objective is to test two theories about the pathway from inequality to per capita income. According to one theory, inequality reduces incomes because it induces social spending, which acts as a drag on the economy. The results here suggest, however, that inequality does not seem to induce social spending, and social spending does not seem to lower per capita incomes. According to a second theory, inequality causes upheaval which adds to the volatility of per capita income, which may reduce the level of per capita income. The results suggest, however, that volatility, measured here as the standard deviation of per capita income, has little measurable impact on either per capita income or social spending. The mainsprings of per capita income are more likely to be the traditional factors: the work force, human capital, and physical capital.
JEL classification: E6.     

Poverty Lines as Context Deflators: A Method to Account for Regional Diversity with Application to the Democratic Republic of Congo

This paper proposes a particular methodology to render budget data more comparable over highly diverse regions. More specifically, a set of regional poverty lines will be derived and employed as deflators to correct household expenditures for spatial differences in prices and needs. The quality of these deflators depends on the extent to which the underlying poverty lines adhere to the principles of consistency and specificity. Central to reconciling both principles in practice is our pursuit for austerity in setting poverty thresholds as well as the view that differences in social norms mainly reflect differences in social inclusion needs. The particularity of the proposed method compared to standard practice lies in the combination of: (i) the pronounced subdivision in socio‐economic strata; (ii) the use of a differential calorie threshold per sector; (iii) the introduction of protein intake; (iv) the derivation of a minimal house rent; and (v) the use of an austere non‐food/non‐housing allowance. The impact of this method is illustrated using a budget survey of the Democratic Republic of Congo.     

National pro-poor spending programmes and their effect on income inequality and poverty: Evidence from Vietnam

This article examines the causal effects of the national (pro-poor) targeted programmes (NTPs) on both poverty incidence and inequality in Vietnam over the period 2002–2010. While the links between NTPs and poverty alleviation and income inequality have previously been analysed independently, this study is the first to offer a comprehensive analysis of NTPs expenditure on poverty and inequality simultaneously. Applying the system generalized method of moments estimator to a panel of Vietnamese regional data, we are unable to establish that NTPs have significantly mitigated poverty incidence. However, we estimate that NTPs have significantly increased inequality. We offer possible explanations why the NTPs have resulted in these unintended outcomes and discuss potential policies which can reduce both poverty and inequality.     

SMEs,Growth, and Poverty: Cross-Country Evidence

This paper explores the relationship between the relative size of the Small and Medium Enterprise (SME) sector, economic growth, and poverty alleviation using a new database on the share of SME labor in the total manufacturing labor force. Using a sample of 45 countries, we find a strong, positive association between the importance of SMEs and GDP per capita growth. The data do not, however, confidently support the conclusions that SMEs exert a causal impact on growth. Furthermore, we find no evidence that SMEs alleviate poverty or decrease income inequality.     

Migration and regional convergence in the European Union

We offer an empirical, econometric analysis of the impact of migration on the EU27’s NUTS2 regions in the period 2000–2007. We find that migration had no significant impact on regional unemployment in the EU, but affected both GDP per capita and productivity. A 1 percentage point increase in immigration to immigration regions increased GDP per capita by about 0.02?% and productivity by about 0.03?% on impact and by 0.44?% for GDP per capita and 0.20?% for productivity in the long run. For emigration regions an increase in the emigration rate leads to similar reductions of GDP per capita and productivity both on impact and in the long run. Since immigration regions are often regions with above average GDP, while emigration regions in Europe practically all have below average GDP, migration does not seem to promote convergence.     

Inequality in Vietnamese Urban–Rural Living Standards, 1993–2006

We investigate urban–rural inequality in Vietnam using data from the Vietnam Living Standard Surveys between 1993 and 2006. We find that mean per capita expenditure of urban households is consistently twice as much as that of rural households and that the urban–rural gap monotonically increases from the poorer to the richer groups of the expenditure distribution. To isolate factors contributing to the urban–rural gap, we apply the Oaxaca–Blinder type decomposition to a newly developed unconditional quantile regression method. Factors contributing significantly to the high urban–rural gap include inter‐group differences in education, household age structure, labor market activity, geographic location and their related returns, with education playing the most important role. Over the period, consistent with the country's massive rural–urban migration, we find that domestic remittance plays a significant role in shortening the urban–rural expenditure gap in the later years, 2002 and 2006.     

Does environmental quality influence health expenditures? Empirical evidence from a panel of selected OECD countries

In this paper we examine the role of environmental quality in determining per capita health expenditures. We take a panel cointegration approach in order to explore the possibility of estimating both short-run and long-run impacts of environmental quality. Our empirical analysis is based on eight OECD countries, namely Austria, Denmark, Iceland, Ireland, Norway, Spain, Switzerland, and the UK for the period 1980-1999. We find that per capita health expenditure, per capita income, carbon monoxide emissions, sulphur oxide emissions and nitrogen oxide emissions are panel cointegrated. While short-run elasticities reveal that income and carbon monoxide emissions exert a statistically significant positive effect on health expenditures, in the long-run in addition to income and carbon monoxide, we find that sulphur oxide emissions have a statistically significant positive impact on health expenditures.     

Work‐Related Migration and Poverty Reduction in Nepal

Using two rounds of nationally representative household survey data in this study, we measure the impact on poverty in Nepal of local and international migration for work. We apply an instrumental variables approach to deal with nonrandom selection of migrants and simulate various scenarios for the different levels of migration comparing observed and counterfactual household expenditure distribution. Our results indicate that one‐fifth of the poverty reduction in Nepal occurring between 1995 and 2004 can be attributed to higher levels of work‐related migration and remittances sent home. We also show that while the increase in international work‐related migration was the leading cause of this poverty reduction, domestic migration also played an important role. Our findings demonstrate that strategies for economic growth and poverty reduction in Nepal should consider aspects of the dynamics of domestic and international migration.     

The effects of off‐farm work on fertilizer and pesticide expenditures in China

This study examines the effects of participation in off‐farm work on farm expenditures on fertilizer and pesticide, using farm household survey data from China. Simple mean value comparisons reveal no statistically significant differences in fertilizer and pesticide expenditures between off‐farm work participants and nonparticipants. However, econometric estimation with a treatment effects model shows a negative selection bias. After controlling for this bias, the empirical results show that participation in off‐farm work exerts a positive and statistically significant impact on fertilizer and pesticide expenditures. Our findings generally suggest that the income effect of off‐farm work stimulates agricultural production by increasing investments in productivity‐enhancing inputs.     

影响我国农村居民收入差距的主要因素:从收入构成角度的分解分析

This paper attempts to explore the causes behind the change of the inequality in China rural areas at the very beginning of this century by decomposing the inequality of the total per capita income into the contributions from different income components. Furthermore, we develop the decomposition method of Gini coefficients from the income components and use it not only in the static analysis but also in comparative static analysis. Namely it can be used to explore the change of the overall inequality by decomposing the change of Gini Coefficient from income components. The empirical results show that the wage from local employment, the income from agricultural household business and the incomes from non-agricultural household business are the three income components that made the largest contributions to the inequality of the total per capita income. The total contribution to the overall inequality of non-agricultural incomes was much more than that of agricultural incomes. The incomes from agricultural household business, the incomes from non-agricultural household business and the wages from migration made the positive impact on the increase of the overall inequality. The incomes donated by relatives and friends made the most important negative impact on the increase of the overall inequality.