Revisiting Growth‐Poverty Relationship: A Medium‐Term Causality Approach

This article examines the potential medium‐term causal relationship between changes in Gross Domestic Product (GDP) per capita and poverty in developing countries during the 1970s–1990s. For this purpose, we use panel data model evaluation techniques to test the out‐of‐sample forecasting performance of competing models. We conclude that the evidence supports the hypothesis that increases in GDP per capita cause unidirectional poverty reduction, measured by the $1/day poverty rate, in the period 1970s–1980s. The results are similar when analysing low‐ and middle‐income countries and mid‐high‐ and very high‐inequality countries separately. However, in the period 1980s–1990s, it is only statistically significant for low‐income countries.     

The determinants of income inequality in Thailand: A synthetic cohort analysis

This paper presents tests and estimates of the human capital model of income inequality using synthetic cohort data for Thailand: 1992–2011. The model focuses on four primary determinants of income inequality: mean per capita income levels, the variances in years of education, in the number of children, and in the number of earners in the household. All of these factors are important sources of income inequality in Thailand, with relative impacts that differ across demographic groups and types of household structure. An inverted-U relation between mean per capita income levels and inequality is found, reflecting gender differences of the head of household, differences in household composition, and variation in access to finance. Although the human capital model emphasizes education, estimates presented here show other household characteristics, such as number of children and number of earners, can be even more important sources of inequality.     

Decomposing income inequality in a backward pre‐industrial economy: Old Castile (Spain) in the middle of the eighteenth century

Research on economic inequality in early modern Europe is complicated by the lack of appropriate data for reconstructing income or wealth distributions. This article presents a study of income inequality in mid‐eighteenth‐century Old Castile (Spain) using the Ensenada Cadastre, a census conducted between 1749 and 1759. The article describes the information provided by this census and then discusses its advantages and disadvantages for reconstructing income profiles and calculating income inequality. This is followed by analysis of a dataset derived from the Cadastre that consists of more than 4,000 observations from Palencia (a province in northern Spain) and contains information on sources of household income, each household head's main occupation, residence location, and other household characteristics. Demographic data from this census is used to weight observations in the sample and thereby minimize selection bias. Findings show that inequality in eighteenth‐century Spain was probably substantial despite its relative backwardness; that the relationship between inequality and per capita income was not clear‐cut and was probably influenced by measurement of the higher incomes; and that although income inequality was largely driven by uneven land distribution, labour income also contributed to overall inequality—especially in urban centres.     

Economic Convergence in the African Continent: Closing the Gap

The paper attempts to analyse the conditional β‐convergence and its sources for 32 African countries over the period 1960‐2008. The augmented Solow model with both gross domestic product (GDP) per worker and per capita income is estimated using the dynamic system generalized methods of moments (GMM) technique with the panel data. This is the first study on the sources of conditional β‐convergence for African countries. According to the results of the augmented Solow model, income convergence rates are lower than those of GDP per worker. Moreover, total factor productivity convergence, human capital convergence and capital labour convergence are contributing towards the convergence of GDP per worker in Africa. This means that growth in the poorest African countries is being augmented by “catch‐up factor,” which is good news for them. However, convergence in terms of GDP per worker is not being fully translated into income per capita convergence. The demographic structure in the African continent with its record of persistent population growth has played an important role in lowering the income convergence of its countries.     

Do International Remittances Affect Poverty in Africa?*

Abstract: International remittances flowing into developing countries are attracting increasing attention because of their rising volume and their impact on recipient countries. This paper uses a panel data set on poverty and international remittances for African countries to examine the impact of international remittances on poverty reduction in 33 African countries over the period 1990–2005. We find that international remittances—defined as the share of remittances in country GDP—reduce the level, depth, and severity of poverty in Africa. But the size of the poverty reduction depends on how poverty is being measured. After instrumenting for the possible endogeneity of international remittances, we find that a 10 percent increase in official international remittances as a share of GDP leads to a 2.9 percent decline in the poverty headcount or the share of people living in poverty. Also, the more sensitive poverty measures—the poverty gap (poverty depth) and squared poverty gap (poverty severity)—suggest that international remittances will have a similar impact on poverty reduction. The point estimates for the poverty gap and squared poverty gap suggest that a 10 percent increase in the share of international remittances will lead to a 2.9 percent and 2.8 percent decline, respectively, in the depth and severity of poverty in African countries. Regardless of the measure of poverty used as the dependent variable, income inequality (Gini index) has a positive and significant coefficient, indicating that greater inequality is associated with higher poverty in African countries, much in conformity with the literature. Similar results were obtained for trade openness. In the same vein, per capita income has a negative and significant effect on each measure of poverty used in the study. Our results also show that inflation rates positively and significantly affect poverty incidence, depth and severity in Africa. In all three poverty measures, the dummy variable for sub‐Saharan Africa is strongly positive, and strongly negative for North Africa. The policy implications of these results are discussed.     

Dynamics of Growth,Poverty and Inequality: A Panel Analysis of Regional Data from Thailand and the Philippines*

Using panel data for provinces compiled from household expenditure microdata, the present paper empirically investigates the relationships among growth, poverty and inequality in Thailand and the Philippines. The empirical model avoids the potential bias due to the fact that the entire distribution of individual‐level consumption changes over time and empirical variables for growth, poverty and inequality are often compiled from the consumption distribution. The system generalized method of moments estimation results strongly suggest that inequality reduced the growth rate of per‐capita consumption, and that differences in inequality explain a substantial portion of the Philippine–Thai difference in growth and poverty reduction since the late 1980s.     

Firm agglomeration and local poverty reduction: evidence from an economy in transition

We examine the linkages between firm agglomeration and the welfare of households in Vietnam. We measured firm agglomeration by per capita firm output at the district level and household welfare by per capita income, expenditure, and poverty. We find that firm agglomeration helps households move from the informal sector to the formal sector. As a result, there is a positive effect of firm agglomeration on per capita income, per capita expenditure, and poverty reduction, albeit of a small and time‐decreasing magnitude. The effect of firm agglomeration on per capita expenditure tends to be higher for households with men, younger, and more educated heads than households with women, older, and less educated heads. Households in rural areas and those that do not have crop land are more likely to benefit from firm agglomeration than those living in urban areas and having crop land.     

Informal Credit,Usury, or Support? A Case Study for Vietnam

The informal credit market remains an important source of finance for the poor in Vietnam. Yet, little if anything is known about the impact of informal loans on poverty and inequality, and the Vietnamese government has no policies towards the informal credit market. In the present study paper, we found that the effect of credit from friends and relatives on per capita expenditure is positive but not statistically significant. Meanwhile, the effect of credit from private moneylenders on per capita expenditure is positive and statistically significant. Borrowing from private moneylenders increases per capita expenditure of households by around 15%. Further, it reduced the poverty incidence of borrowers by around 8.5 percentage points in 2006 and significantly decreases the poverty gap index and the poverty‐severity index. Borrowing from private moneylenders also reduces expenditure inequality, albeit at a very small magnitude.     

Exploring income variations across traditional authorities in KwaZulu‐Natal,South Africa

To understand income inequality and poverty, one must go beyond the important and much‐studied differences rural and urban living and investigate inequalities within rural areas. Using new South African data aggregated by ‘traditional authorities’, this article examines variations in per capita income across poor, rural, mostly black areas of KwaZulu‐Natal (KZN) province. The inequalities are significant. In explaining them, the article examines the importance of such variables as education, proportion of females in the resident population, population density, soil quality and rainfall. A geographical information system is used to map both the raw data and the residuals from a regression analysis, and this combination of statistical and geographical analyses yields new insights. Finally, the article suggests how these techniques might be supplemented by qualitative and quantitative studies of ‘overachieving’ and ‘underachieving’ traditional authorities ‐ those whose incomes per capita are well above or below what regression equations would predict.     

Patterns of poverty in South Africa

This article brings together results from two large household surveys ‐ the October Household Survey and the Income and Expenditure Survey of 1995. The analysis adopts a simple definition of income poverty which allows comparisons between households in ten deciles defined on the basis of per capita household income. The analysis compares access to resources such as housing and land, and access to basic services across these households. It then examines the economic status of women and men living in households with different incomes. The article shows consistent correlation of per capita income with other examined variables. It illustrates further how women within each decile are disad‐vantagedcomparedwith men in terms of economic status and earning.     

The Effect of Land Restitution on Poverty Reduction among the Khomani San “Bushmen” in South Africa

This paper looks at the impact of land restitution involving the Khomani San “bushmen” in the Kgalagadi area of South Africa. It seeks to investigate the effect of land restitution on poverty reduction among the beneficiaries. We run two‐stage least squares models of access to nature, per capita income and poverty status on the use of restituted land, among other variables. Our results suggest that the Khomani San beneficiaries have gotten more access to natural resources but that the use of restituted land has neither increased per capita income nor reduced poverty. In fact, the use of restituted land has contributed to increased poverty. Therefore, land restitution should become part of a broader, carefully crafted rural developmental strategy for it to be effective in reducing poverty. Otherwise, land restitution risks enabling indigenous communities to continue with their “traditional” way of life, and in fact thereby keep them poor.     

Revisiting the Impact of Consumption Growth and Inequality on Poverty in Indonesia during Decentralisation

This article analyses the consumption growth elasticity and inequality elasticity of poverty in Indonesia, with a particular focus on the decentralisation period. Using provincial panel data, we show that the effectiveness of growth in alleviating poverty across provinces was greater during decentralisation—that is, between 2002 and 2010—than at any other point since 1984. The growth elasticity of poverty since 2002 is estimated to have been –2.46, which means that a 10% increase in average consumption per capita would have reduced the poverty rate by almost 25%. However, we also find that rising income inequality negated a quarter to a third of the 5.7-percentage-point reduction in the headcount poverty rate. This increasing inequality has contributed to a lower level of pro-poor growth than that maintained in Indonesia before decentralisation.     

Trade Opening,Fiscal Reforms,Poverty, and Inequality: A CGE Analysis for Bangladesh

We assess the short‐ and long‐run impacts of tariff reform policies on Bangladeshi households' poverty and income distribution by developing an 86‐sector, four‐factor, and nine‐household‐group computable general equilibrium (CGE) model. The main findings are that the complete removal of tariffs leads to a decrease in overall poverty with rich household groups in a relatively better position. In the short run poverty incidence increases for rural landless, urban illiterate, and low‐educated household groups whereas rural large farmer and urban medium household groups enjoy improvements in all poverty indicators. In terms of income distribution, trade liberalization enhances inequality slightly, but there is a tendency towards more equitable distribution in the long run. The choice of a fiscal compensatory mechanism with consumption tax is likely to play a negative role in terms of poverty and inequality in the short run; however, interestingly, the results are pro‐poor in the long run.     

Energy demand and population changes

During the post World War 2 years energy consumption has grown 136% while population grew about 51%; per capita consumption of energy expanded, therefore, about 60%. For a given population size, demographic changes mean an increase in energy needs; for instance the larger the group of retirement age people, the smaller their energy needs than are those for a younger group. Estimates indicate that by the year 2000 the energy impact will be toward higher per capita consumption with 60% of the population in the 19-61 age group of workers. Rising female labor force participation will increase the working group even more; it has also been found that income and energy grow at a proportional rate. The authors predict that gasoline consumption within the US will continue to rise with availability considering the larger number of female drivers and higher per capita incomes. The flow of illegal aliens (750,000/year) will have a major impact on income and will use greater amounts of energy than can be expected. A demographic change which will lower energy demands will be the slowdown of the rate of household formation caused by the falling number of young adults. The response of energy demand to price changes is small and slow but incomes play a larger role as does the number of personal automobiles and social changes affecting household formation. Households, commercial space, transportation, and industry are part of every demand analysis and population projections play a major role in determining these factors.     

The Development of Inequality and Poverty in Indonesia, 1932–2008

We estimate inequality in Indonesia between 1932 and 2008. Inequality increased at the start of this period but declined sharply from the 1960s onwards. The increase was due to a shift from domestic to export agriculture over the period up to the Great Depression. During the 1930s, as the price of export crops declined, the income of rich farmers suffered a blow. Yet this was counterbalanced by an increasing gap between expenditures in the urban and rural sectors, causing an overall rise in inequality. As for the second half of the century, we find that the employment shift towards manufacturing and services—combined with an increase in labour productivity in agriculture—accounts for inequality’s decline, which was halted in the 1990s. These inequality trends affected poverty as well, but prior to the 1940s the negative impact of the rise in inequality was offset by an increase in per capita GDP. Between 1950 and 1980 a decline in inequality, combined with increased per capita GDP, rapidly raised a large portion of the population above the poverty line.     

收入水平、老龄化与营养摄入——基于广东省城镇住户数据的研究

进入新世纪以来,中国城镇居民面临营养不足与营养过剩并存的双重挑战。文章基于广东省城镇住户调查数据,运用门限模型对样本进行了异质性检验和高低收入样本的划分,在此基础上开展了高低收入样本下收入水平和老龄化对城镇居民营养摄入影响的实证分析。结果表明:总体样本中城镇居民营养摄入存在显著的收入门限效应;低于门限值样本的能量、蛋白质和脂肪需求的收入弹性分别为0.816、0.848和0.840,而当人均收入跨过门限值后,对应的收入弹性值减小为0.666、0.507和0.481;同时,老龄化对高收入组样本的营养摄入有负向显著性影响,但对低收入组样本的影响不显著。可见,在制定不同收入水平人群的食物与营养政策时,有必要采取差别化的干预措施,引导科学合理膳食,改善食物与营养结构;把重点人群作为突破口,开展老年人营养监测和膳食引导。     

Food Price Crisis,Poverty, and Inequality

This paper simulates how a doubling of food prices affects absolute poverty and the food‐price‐adjusted real income distribution. We assume unsubsidized world food prices in order to derive the cost of poverty deepening and poverty expansion. We also estimate the degree to which inequality increases if no measures are put in place to offset rising food prices. Both measures are vulnerability indicators useful for social policy planning. Our results show that low‐income countries experience dramatic increases in absolute poverty as a result of doubling food prices. Middle‐income countries experience the greatest decrease in absolute income, which contributes most to an increase in world income inequality. The paper estimates that the global dollar value of the absolute poverty gap ($1.25/day) has the potential to increase by 400%, with poverty deepening accounting for two thirds of the increase.     

Income Distribution across Ethnic Groups in Malaysia: Results from a New Social Accounting Matrix

A new social accounting matrix is constructed for Malaysia for the year 2000 to analyze sources of income inequality among ethnic groups in Malaysia. The analysis reveals that income inequality can be decomposed into the interaction of: (i) hourly wages; (ii) working hours per week; and (iii) number of dependents per household. The results of the analysis suggest that occupational differences are the main factor contributing to wage inequality in Malaysia. Ethnic Malays tend to work in low‐wage industries while ethnic Chinese and Indians are more likely to work in higher‐wage industries.     

Testing the impact of financial inclusion on income convergence: Empirical evidence from Nigeria

Financial inclusion, as a key pillar for inclusive development, has long been considered as an important instrument for reducing poverty and income inequality. However, the income convergence effect of financial inclusion remains only partially explored. Using longitudinal data covering three survey waves on Nigerian households, this study explores the potential of financial inclusion as an instrument for reducing income disparity. After controlling for the endogeneity issues, the results of instrumental variable linear and quantile regressions consistently show a strong nexus between financial inclusion and per capita income. This positive effect is experienced by all households regardless of income distribution. The decomposition results reveal that ab initio, financial inclusion resulted in income divergence leading to widening inequality across the households with various income distributions. However, the income convergence started from the middle to the higher income household categories, with the lowest income lagging behind in the second wave. The lowest income households eventually converged in the data of the third wave. In this sense, it can be argued that financial inclusion could play an important role in the reduction of income inequality.     

新疆人均收入和收入不平等的增长与收敛——基于空间面板模型

新古典经济增长模型预测,随着时间的推移,人均收入的差距将会缩小,收入不平等将会逐渐趋同。本文利用1995年—2012年新疆15个地州的空间面板数据,采用跨部门模型和空间面板数据模型,并考虑空间交互效应来检验上述预测对新疆的正确性。研究结果显示,在对教育程度、失业、产业构成、人均收入的空间滞后增长以及区域固定效应进行调控之后,人均收入存在条件收敛,而收入不平等则存在无条件收敛。