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.     

Missing poor and income mobility

Higher mortality among the poor prevents standard poverty measures from quantifying the actual extent of old-age poverty. Whereas existing attempts to deal with the ”missing poor” problem assume the absence of income mobility and assign to the prematurely dead a fictitious income equal to the last income enjoyed, this paper relaxes that assumption in order to study the impact of income mobility on the size of the missing poor bias. We use data on poverty above age 60 in 12 countries from the EU-SILC database, and we compare standard poverty rates with the hypothetical poverty rates that would have prevailed if (i) all individuals, whatever their income, had enjoyed the same survival conditions, and if (ii) all individuals within the same income class had been subject to the same income mobility process. Taking income mobility into account has unequal effects on corrected poverty measures across countries, and, hence, affects international comparisons in terms of old-age poverty.     

“收入导向型”多维贫困的识别与流动性研究*——基于CFPS调查数据农村子样本的考察

本文结合收入及健康、教育、生活状况、卫生状况和食物支出五个非收入指标,构建了“收入导向型”多维贫困指数,采用中国家庭追踪调查（CFPS）数据的农村子样本,考察多维贫困的识别、追踪和流动性问题。在比较了6维贫困指标和多维贫困指标对贫困识别的效果后研究发现,仅依据收入、教育和生活状况三个维度即可有效识别和追踪贫困家庭,并且在这三个维度下均处于贫困状态的农村家庭跳出贫困陷阱的概率显著低于一般收入贫困家庭。研究表明,扶贫政策应当在减少收入贫困基础上更多关注多重剥夺对贫困家庭整体福利的影响,并致力于提高贫困家庭的持续脱贫能力以增强其跳出贫困陷阱的可能性。     

THE DEGREE AND PATTERN OF INCOME IMMOBILITY IN SWEDEN

This paper studies immobility in the distribution of income using Swedish data. Tax data shows immobility in personal income to be a decreasing function of the length of the period over which it is studied and an increasing function of initial age. The results show immobility to be larger among males than among females. Based on a household income survey it is found that when the time period expands from one to two years, the Gini-coefficient of equivalent income per person decreases by five percent. A sample of males indicates that income immobility between generations in Sweden is low.     

Evolutions in Consumption Inequality and Poverty in Greece: The Impact of the Crisis and Austerity Policies

Greece is the country hit hardest by the crisis and subsequent fiscal consolidation strategies, suffering a cumulative output loss of about 30 percent since 2008. The present paper presents evidence that along with declining average living standards, consumption inequality has seriously grown, fueled primarily by a disproportionate drop in the consumption levels of what can be considered the middle class. Although poverty has not significantly risen in relative terms, it climbs to around 45 percent once the poverty threshold is anchored to pre‐crisis levels. Furthermore, significant indirect tax hikes have further increased inequality in consumption expenditure. The paper also shows that several reforms launched in the name of reducing labor costs, broadening the tax base or rationalizing the targeting of social benefits have had detrimental effects on one of the most vulnerable population groups, namely families with children, thus implying that the social consequences of the crisis will be long‐lasting.     

A COMPARISON BETWEEN ACTUAL DISTRIBUTIONS OF ANNUAL AND LIFETIME INCOME: SWEDEN 1951–89

This paper uses register data on tax assessed income from 1951 to 1989 for a representative sample of Swedish men in order to compare the distributions of annual income and "lifetime" income. It is found that the dispersion of lifetime income is around 35 to 40 percent lower than typical cross-sections of annual income. It is income up to around 30 years of age that mainly explains this discrepancy in the magnitude of dispersions. From the age of 30 until 65 years the correlations between annual and lifetime income are quite high and the dispersion of annual income is not very much higher than the dispersion of lifetime income. An analysis of the evolution of income mobility shows that there is a slight tendency to rising mobility over time. This finding implies that the common approach to study the development of income distribution by using only annual income can be misleading.     

THE EFFECT ON POVERTY STATUS IN ISRAEL OF CONSIDERING WEALTH AND VARIABILITY OF INCOME

This paper assesses the effects of including wealth and the variability of income on the incidence of poverty and the degree of income inequality in Israel. A special survey, which includes data on the wealth and income of a national sample of Israeli families in 1963–64 and 1964–65, allows us to go beyond measures based on current income alone.
The first section reviews earlier studies of poverty in Israel. The next section looks at poverty and inequality in terms of current income, current wealth, and a combined measure of income and wealth. The combined measure is the Hansen-Weisbrod measure (HW), which equals income plus the annuity value of wealth, assuming all wealth is just consumed at the time of death. It is interesting that, in spite of the much higher wealth inequality than income inequality, the HW measure was slightly more equally distributed than income. This result occurred because the annuity component made up a low share of the total HW measure and the correlation between income and wealth was well under 1. Although overall inequality and poverty were similar for income and HW measures, the incidence of poverty by subgroup depended on the measure used.
The final section presents a dynamic view of poverty and inequality. Year-to-year changes in poverty were substantial. Because of the use of a relative poverty concept and the rise in real incomes, the real income poverty line rose by 15 percent between 1963 and 1964. Still, of those in income poverty in 1963, 37 percent managed to escape poverty in 1964. The paper shows how the degree to which poverty was stable or transitory varied substantially by age and country of origin.     

Inter-provincial migration and inequality during Vietnam's transition

Vietnam's economic boom during the transition to a market economy has centered on very rapid growth in some sectors and provinces, yet poverty has diminished across the entire country. With capital investments highly concentrated by province and sector, geographic labor mobility may be critical in spreading the gains from growth. Conversely, rising income inequality may be attributable in part to impediments to migration. We first use census data to investigate migration patterns and determinants. We then examine the role of migration as an influence on income ratios between pairs of provinces. The former analysis robustly confirms economic motives for migration but also suggests the existence of poverty-related labor immobility at the provincial level. Examination of income ratios between pairs of provinces reveals that the impact of migration on inequality can be either negative or positive. A robust inequality-reducing impact of migration is found for migration flows into provinces where most of Vietnam's trade-oriented industrial investments are located.     

Assessing the Possible Antipoverty Effects of Recent Rises in Age‐Specific Minimum Wages in New Zealand

Real minimum wages increased by nearly 33 percent for adults and 123 percent for teenagers in New Zealand between 1999 and 2008. Where fewer than 2 percent of workers were being paid a minimum wage at the outset of this sample period, more than 8 percent of adult workers and 60 percent of teenage workers were receiving hourly earnings close to the minimum wage by the end of this period. These policy changes provide a unique opportunity to estimate the effects of the minimum wage on poverty. Although minimum wage workers are more likely to live in the poorest households, they are relatively widely dispersed throughout the income distribution. This is particularly true of teenage minimum wage workers. Furthermore, low‐income households often do not contain any working members. We estimate that a 10 percent increase in minimum wages, even without a loss in employment or hours of work, would lower the relative poverty rate by less than one‐tenth of a percentage point.     

A NON‐PARAMETRIC MEASURE OF POVERTY ELASTICITY

We estimate the growth elasticity of poverty (GEP) using recently developed non‐parametric panel methods and the most up‐to‐date and extensive poverty data from the World Bank, which exceeds 500 observations in size and represents more than 96 percent of the developing world's population. Unlike previous studies which rely on parametric models, we employ a non‐parametric approach which captures the non‐linearity in the relationship between growth, inequality, and poverty. We find that the growth elasticity of poverty is higher for countries with fairly equal income distributions, and declines in nations with greater income disparities. Moreover, when controlling for differences in estimation technique, we find that the reported values of the GEP in the literature (based on the World Bank's now‐defunct 1993‐PPP based poverty data) are systematically larger in magnitude than estimates based on the latest 2005‐PPP based data.     

INCOME MOBILITY IN SPAIN: HOW MUCH IS THERE?

Traditional cross-sectional research is unable to measure the degree of income mobility in an income distribution. Using longitudinal data and various income stability indices, this paper measures the level of permanent inequality (immobility) in Spain for the period 1985–92. Results indicate that the transitory component of inequality is large and the level of income mobility increases over time while income inequality decreases slightly. More stability is found at the top than at the bottom of the income distribution and the range of the registered movements is rather short.     

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.     

HETEROGENEITY OR TRUE STATE DEPENDENCE IN POVERTY: THE TALE TOLD BY TWINS

The purpose of this study is to distinguish between two different reasons that poverty could persist on an individual level. This study takes advantage of the similarity within pairs of identical twins to separate family‐specific heterogeneity from true state dependence, where the experience of poverty leads to a higher risk of future poverty. The results, based on a four‐variate probit model, show the importance of true state dependence in poverty. When using a poverty measure based on disposable income, family‐specific heterogeneity explains between 21 and 25 percent of poverty persistence in the Swedish sample of twins.     

Poverty Dynamics in Turkey

This paper examines poverty dynamics in Turkey using a nationally representative panel data covering the 2005–08 period. The aim is to understand mobility in and out of poverty and its correlates. We find that almost a quarter of the poor are persistently poor. The conditional and unconditional exit rates that we estimate are within the range of values reported for developed countries in the literature. That the income events—but not transfers—dominate both poverty entries and exits is indicative of the major role labor markets play in the lives of the poor. In particular, we argue that given the characteristics of the poor and modest levels of social assistance, the reason for mobility rates close to European averages must be sought in the informal economy.     

The Persistence of Income Shocks: Evidence from Rural Indonesia

This paper estimates the persistence of transient income shocks to farm households in rural Indonesia. Persistence is defined as the elasticity of a household's 1997 household per capita income with respect to its 1993 per capita income, controlling for time‐invariant characteristics of the household. Local rainfall levels are used as an exogenous source of transitory variation in 1993 income. Four main conclusions emerge. First, roughly 30% of household income shocks remain after four years. Second, the persistence of negative and positive shocks is approximately equal; if anything, positive shocks last longer. Third, neither positive nor negative income shocks disproportionately affect poor households. Finally, measurement error in income and unobserved household heterogeneity are important sources of bias. These findings cast doubt on common arguments advocating public intervention to stabilize or redistribute income, and suggest that anti‐poverty policy should address more permanent causes of household poverty.     

A Multidimensional Poverty Index for Latin America

This paper proposes a new Multidimensional Poverty Index for Latin America. The index combines monetary and non‐monetary indicators, updates deprivation cut‐offs for certain traditional unsatisfied basic needs indicators and includes some new indicators, aiming to maximize regional comparability within the data constraints. The index is estimated for 17 countries of the region at two points in time—one around 2005 and the other around 2012. Overall, we estimate about 28 percent of people are multidimensionally poor in 2012 in the region. We find statistically significant reductions of poverty in most countries, both in terms of incidence and intensity over the period under analysis. However, important disparities between rural and urban areas remain. Statistical scrutiny of the index suggests that it captures the state of poverty relatively well while maintaining a certain parsimony and being highly robust to changes in weights, indicators, and poverty cut‐off.     

A Behavior‐Based Approach to the Estimation of Poverty in India

Estimates of poverty in India are crucial inputs for the understanding of world poverty, yet there is much disagreement about the numbers and the legitimacy of methods used to derive them. In this paper, we propose and justify an alternative approach to identify the poor, which uses the proportion of income spent on food. Our estimates have weaker data requirements than official methods, and they compare favorably with several validation tests. Most notably, households around our state poverty lines obtain their calories from similar sources, whereas this is not true of official poverty lines. We also find that rates of self‐reported hunger are higher in states that we classify as poor.     

Income Mobility, Temporary and Permanent Poverty

This paper incorporates poverty persistence in a measure of aggreg ate poverty over two-periods by decomposing the Foster et al . (1984) class of poverty measures into those temporarily in poverty and those in poverty in both periods. An additional weight is added to the permanent component in forming an aggregate poverty measure over both periods; this weight reflects the degree of poverty-persistence aversion. The effect on aggregate poverty of mobility between permanent and temporary poverty is found to be unambiguous only in the case of the headcount poverty measure. Simulations are used to investigate the relationship between poverty and mobility. The effects of two different types of mobility (random proportio nal income changes and a systematic regression towards or away from the median) are isolated     

INTERGENERATIONAL INCOME MOBILITY IN SWEDEN: WHAT DO TAX‐DATA SHOW?

The aim of this paper is to investigate intergenerational income mobility in Sweden by means of a representative sample drawn from tax-data files. Longitudinal data on actual parent-child pairs spanning 1978–92 are employed. Regression and correlation coefficients are analyzed and transition matrices calculated in order to investigate income mobility over generations. The results achieved show high intergenerational income mobility in Sweden between fathers and sons in comparison to estimations performed in most other countries and more especially compared to the U.S. This indicates that Sweden does not only have lower cross-sectional income inequality, but also higher intergenerational income mobility than those countries. The mother's earnings influence children's earnings less than the father's. However, the mother's earnings correlate more strongly with a daughter's earnings than they do with that of a son. The major indication of immobility across generations is found in the upper income deciles.     

Equity in Poverty Program Evaluations

Poverty‐reducing programs often use indicators other than household income to transfer resources to the poor which has important implications in terms of equity of the program. This paper offers a decomposition methodology to analyze the horizontal and vertical equity components of a redistribution policy for subgroups defined according to policy‐relevant characteristics. Our measures are derived by comparing the cost of inequality in terms of equally distributed equivalent poverty gaps in the pre‐transfer income and post‐transfer income distributions. An application to the poverty‐reducing program Oportunidades in Mexico in 2006 reveals that the use of indicator variables more strongly correlated with pre‐transfer incomes in rural households can improve the redistributive effect while it also points out the difficulties of the program in targeting different levels of support among the poor, both within and between groups.