The Dynamics of Poverty and the Promotion of Transition from Non‐Regular to Regular Employment in Japan: Economic Effects of Minimum Wage Revision and Job Training Support

Comparison between Japan and other advanced countries shows that the relative poverty rate is high in Japan, and that many of the poor households are those with a non‐regular worker. As for mobility between income classes, the proportion of households remaining in the poor class for a long period of time in Japan is close to the average for EU countries. The panel estimation of its effect on wages shows that the raising of the minimum wage is statistically significantly associated with an increase in wages of non‐regular workers, in particular, female, but does not seem to decrease employment. The result shows that for male non‐regular workers, firm‐provided training promotes their transition to regular employment, and that for female non‐regular workers, occupational training promotes their transition to regular employment at different firms.     

Poverty growth in Scandinavian countries: A Sen multi-decomposition

We show in this paper that the growth rate of the Sen index is multi-decomposable, that is, decomposable simultaneously by subgroups and income sources. The multi-decomposition of the poverty growth yields respectively: the growth rate of the poverty incidence (poverty rate) decomposed by subgroups, the growth rate of the poverty depth (poverty gap ratios) decomposed by sources and subgroups, and the growth rate of inequality decomposed by sources and subgroups. We demonstrate that the multi-decomposition is not unique. It is mainly dependent on poverty lines defined on the space of income sources. An application to Scandinavian countries shows that poverty lines based on non-correlation between the income sources imply serious risks of underestimation of the contribution levels of the different components of the global poverty growth. The main contribution of our paper is to pay particular attention to the poverty growth and its source components in order to avoid underestimation of poverty growth.     

Poverty Dynamics,Violent Conflict,and Convergence in Rwanda

This paper analyzes the poverty impact of the violent events that affected Rwanda in the 1990s. The main objective of the paper is to identify systematically potential mechanisms linking violent conflict with changes in poverty across provinces and households in Rwanda before and after a decade of violence. In accordance with emerging literature on the long‐term economic effects of violent conflict, we find empirical evidence for economic convergence between richer and poorer Rwandan provinces and households following the conflict shocks. Using a small but unique panel of households surveyed before and after the conflict period, we find that households whose house was destroyed or who lost land ran a higher risk of falling into poverty. We do not find much evidence for an economic effect of violent deaths at the household level due to substitution effects of labor within the household. Non‐violent deaths however seem to increase income per adult equivalent for the survivors. Results are shown to be robust to sample selection and IV models.     

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.     

Differentiating Between Dimensionality and Duration in Multidimensional Measures of Poverty: Methodology with an Application to China

We develop a multidimensional poverty measure that is sensitive to the within‐individual distribution of deprivations across dimensions and time. Our measure combines features from a static multidimensional measure (Alkire and Foster, 2011a ) and a time‐dependent unidimensional measure (Foster, 2009 ). The proposed measure separately identifies—and can therefore be decomposed according to—the proportion of the poverty score attributable to: (i) the concentration of deprivations within periods; (ii) the concentration of deprivations within dimensions. In doing so it allows for a poverty ranking that is robust to assumptions about the trade‐off between the two components. Previous measures have not allowed for the features proposed here due to the inability to calculate the exact contribution of each dimension to overall poverty. We overcome this by adapting to our measure the Shapley decomposition proposed in Shorrocks ( 2013 ) (based on Shapley, 1953 ). The measure is applied to data from China, 2000‐2011.     

The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality

Abstract. Based on data from the German Socio-Economic Panel (GSOEP), this paper analyzes the dynamics of equivalent income in East and West Germany in the years following reunification. Special emphasis is given to the separation of permanent and transitory components, the persistence of transitory shocks and their implications for the persistence of poverty and inequality. The results suggest that in West Germany, between 52 and 69 per cent of cross-sectional income inequality was permanent, and that poor individuals stayed in poverty for two years on average. In East Germany, the share of the permanent component in overall income inequality rose continuously from 20 per cent in 1990 to 72 per cent in 1998, reaching a level near the one that prevailed in West Germany during the same period. The rising importance of time-invariant components in East German incomes was also reflected in expected poverty durations which slightly increased from 1.47 years in 1990 to 1.67 years in 1998.     

Take‐Up of Social Assistance Benefits: The Case of the French Homeless

A considerable number of studies have been conducted to measure and analyze the phenomenon of the non‐take‐up of social assistance. However, the homeless portion of this population has long remained outside the scope of this research, so that little is known about their non‐take‐up behavior. In this paper, we focus on this population using a French national survey and we derive measures for the non‐take‐up of French basic income support. Our findings indicate that there is a substantial rate of non‐take‐up among the homeless, but that this rate is lower than that for the general population: approximately 18% of eligible homeless persons do not claim benefits compared to 35% of the general population. Using a large set of variables, we investigate the determinants of non‐take‐up. We show that although some of these determinants are shared with the general population, as identified in the literature, the homeless population exhibits some particularities. Furthermore, our results also suggest that the poorest of the homeless have a larger non‐take‐up rate than other homeless.     

A comparison of the poverty impact of transfers, taxes and market income across five OECD countries

This paper compares the poverty reduction impact of income sources, taxes and transfers across five OECD countries. Since the estimation of that impact can depend on the order in which the various income sources are introduced into the analysis, it is done by using the Shapley value. Estimates of the poverty reduction impact are presented in a normalized and unnormalized fashion, in order to take into account the total as well as the per dollar impacts. The methodology is applied to data from the Luxembourg Income Study database.     

Vulnerability Orderings for Expected Poverty Indices

Vulnerability to poverty refers to the risk of an individual or household falling below the poverty line. A partial vulnerability to poverty ordering is defined to indicate when a situation characterized by uncertainty means that people are more vulnerable to poverty than in another situation. The family of expected poverty indices used in this context contains versions under vulnerability of many well‐known poverty indices. The ordering resembles the Hardy et al. result on the Lorenz partial ordering. A separate ordering for the expected income gap ratio is also investigated. First‐order stochastic dominance is used to indicate when the expected value of the censored returns from the states increases.     

Testing Prediction Performance of Poverty Models: Empirical Evidence from Uganda

This paper examines the performance of a method of predicting poverty rates. Because most developing countries cannot justify the expense of frequent household budget surveys, additional low‐cost methods have been developed and used. The prediction method is based on a model linking the proportion of poor households to suitable explanatory variables (consumption proxies). These consumption proxies are variables that can be collected at much lower cost through smaller annual surveys. Several applications have shown that such models can produce poverty estimates with confidence intervals of a similar magnitude to the poverty estimates from the household budget surveys. There is, however, limited evidence of how well the methods perform out‐of‐sample. A series of seven household budget surveys conducted in Uganda in the period 1993–2005 allows us to test the prediction performance of the model. We test the poverty models by using data from one survey to predict the proportion of poor households in other surveys, and vice versa. The results are encouraging, as all models predict similar poverty trends. Although in most cases the predictions are precise, sometimes they differ significantly from the poverty level estimated from the survey directly.     

PARETO HONOURING POVERTY REDUCTION

Policy reforms often pit the poor against the poor by triggering a fall in poverty for some but an increase in poverty for others. Aggregated national measures gloss over these fine patterns and pronounce ‘a reduction in poverty’– is such aggregation across poor individuals ethically permissible? Addressing this type of aggregation is a hard issue. This paper has made an attempt in that direction by outlining an axiomatically grounded aggregate measure of such gains or losses, duly giving more importance to the losses to a poor compared to the gains of another poor.     

Decomposing Vulnerability to Poverty

This paper applies the decomposition of the Foster–Greer–Thorbecke poverty index to the measurement of individual vulnerability to poverty. I highlight that poverty risk can be expressed as a function of expected incidence, expected intensity, and expected variability below the poverty line, three essential aspects for improving the design of appropriate risk‐management policies. An empirical illustration is provided using the British Household Panel Survey and the Italian Survey on Household Income and Wealth.     

MEASURING POVERTY ACCOUNTING FOR TIME

In this paper we make a methodological proposal to measure poverty accounting for time by proposing a new family of intertemporal poverty indexes that aims at reconciling the way poverty is measured in a static and a dynamic framework. Our index is able to consider the duration of the poverty spell and the social preference for equality in well‐being given that, in contrast with others that have been previously proposed, it is sensitive to the level of inequality between individual complete poverty experiences over time. Moreover, other indices in the literature can be interpreted as special cases of our more general measure. An empirical illustration shows the relevance of considering the distribution of poverty experiences among the population in an international analysis.     

Poverty,undernutrition and vulnerability in rural India: role of rural public works and food for work programmes

This paper analyses the effects of access to Rural Public Works (RPW) or Food for Work programme (FFW) on consumption poverty, vulnerability and undernutrition in India using the large household data sets constructed by the National Sample Survey for 1993 and 2004. The treatment-effects model is used to take account of sample selection bias in evaluating the effects of RPW in 1993 or FFW in 2004 on poverty. We have found significant and negative effects of participation in RPW and the Food for Work Programme on poverty, undernutrition (e.g. protein) and vulnerability in 1993 and 2004.     

A SHAPLEY DECOMPOSITION OF MULTIDIMENSIONAL CHRONIC POVERTY IN ARGENTINA

This paper proposes a Shapley decomposition to analyse the evolution of chronic poverty in a multivariate setting using a chronic poverty measure proposed by Alkire and colleagues. The decomposition makes possible to assess a vast array of information to find the drivers of change in chronic poverty, and could be a valuable tool in the way public policy programmes focus resources. We present an empirical application of the changes in chronic poverty in Argentina during the period 2004–12 using the Permanent Household Survey. We found that households with older adults show great persistence of multidimensional chronic poverty in time while the employment indicators is found to be an important driver of the intensity of chronic poverty.     

INEQUALITY AND POVERTY IN JAPAN*

This paper presents a brief survey of inequality and poverty in Japan. It shows empirical evidence on the extent of both inequality in income distribution and of poverty rates; the paper discusses the cause of increases in both these variables, and the implication of such trends. The paper goes on to argue the difference between inequality of opportunity and inequality of outcome and shows some related empirical evidence. Finally, the paper investigates the relationship between economic efficiency and equity, supposed to be in a trade‐off relationship, and presents my personal view of that relationship and policy recommendations.     

MONITORING ABSOLUTE AND RELATIVE POVERTY: “NOT ENOUGH” IS NOT THE SAME AS “MUCH LESS”

Financial poverty indicators assess which people have few financial resources and are thereby at risk of having an unacceptably low living standard. Most countries use one or several “official” poverty indicators, but they typically use either an absolute or a relative benchmark to determine what is unacceptable; absolute benchmarks are based on basic needs or rights while relative benchmarks depend on what is considered to be a “normal” living standard. Applying the absolute U.S. and the relative EU poverty indicators on the U.S. and 15 EU member states, this research shows that it makes sense to use both benchmarks.