Does Economic Growth Really Benefit the Poor? Income Distribution Dynamics and Pro-poor Growth in Indonesia

We explore the nexus between poverty, inequality, and economic growth in Indonesia between 2002 and 2012, using several pro-poor growth concepts and indices to determine whether growth in this period benefited the poor. Our regression-based decompositions of poverty into growth and redistribution components suggest that around 40% of inequality in total household expenditure in Indonesia was due to variations in expenditure by education characteristics that persisted after controlling for other factors. We find that economic growth in this period benefited households at the top of the expenditure distribution, and that a ‘trickle down’ effect saw the poor receive proportionately fewer benefits than the non-poor. If reducing poverty is one of the Indonesian government's principal objectives, then policies designed to spur growth must take into account the possible impacts of growth on inequality.     

Understanding urban poverty in two high-density suburbs of Harare,Zimbabwe

ABSTRACT

Urban communities are heterogeneous and averages mask inequities and deprivations among poor and rich urban communities. This article examines the situation of households residing in two low-income, high-density suburbs of Harare, Zimbabwe. The aim of the research was to contextualise urban poverty by looking at selected urban communities and vertically analysing the patterns and determinants of poverty. A household survey was administered to 1000 households and qualitative data were collected through focus group discussions and key informant interviews. The study found high levels of income poverty and also found differences in poverty experiences between the two suburbs. The major proximate determinants of poverty were large family size; low education level of the household head; lack of income from permanent employment; low cash transfers; and short length of residence in the suburb. Increasing household income consumption can be addressed through scaling-up industries, which would result in more quality employment.     

Labour market dimensions of poverty in Indonesia

This paper focuses on labour market issues relevant to poverty alleviation. Patterns of participation, unemployment and employment are examined among the poor compared with the non-poor in general, among urban and rural households, and among various socio-demographic groups. Using data from the 2002 National Socio-Economic Survey, the paper finds that low participation in the workforce and high unemployment, while important, are less closely related to poverty status than expected, especially among spouses of household heads. However, sector of employment and underemployment are closely associated with poverty, especially for those in informal jobs in urban areas; in rural areas, the poor are heavily concentrated in agriculture. Among the poor, young people and females are more likely to be underemployed and to work in agriculture than prime-age workers. The data suggest that labour market policies that tend to protect those in formal sector employment are unlikely to reduce poverty much, if at all.     

Poverty in Zambia: Levels,patterns and trends

This article presents the results of the analysis of levels, patterns and trends in the incidence of poverty in Zambia between 1991 and 1998, based on data captured in nationally representative surveys. In 1998, about 73 per cent of the households in Zambia were poor, the majority of which were extremely poor. Most poor households were in rural areas, with wide inter- and intra-provincial and district variations. The incidence of poverty also varied according to employment status and sector, as well as by district, gender, marital status, education and stratum of head of the household. In general, households headed by females, those without any formal education, unpaid family workers, the inactive, the self-employed, and those in agriculture, forestry and fishing recorded the highest incidence of poverty, with those employed in private households being affected the worst. In spite of the general increase in poverty nationally, most rural provinces registered declines while urban areas experienced increases in the incidence of poverty during the period under review. Furthermore, except for the agricultural/forestry, mining and quarrying, and electricity and gas sectors, the incidence of poverty increased in all the other sectors while remaining almost the same in the real estate sector. The direction and magnitude in the incidence of poverty between 1991 and 1998 were also associated with gender, education, employment status, employment sector, and residence of head of the household, as well as size of the household. Based on the analysis, the article strongly recommends revision in the measurement of poverty, investigation of the types of coping strategies adopted by the poor, and the extent to which these impact on the general well-being and productivity of vulnerable households in Zambia. The need for more qualitative data has also been highlighted.     

Poverty and Vulnerability in Indonesia Before and After the Economic Crisis

It is well known that the economic crisis in Indonesia has caused the poverty rate to increase significantly. The present study finds, not only that the poverty rate increased significantly, but also that much of the increase was due to a large increase in the chronic poor category (i.e. the poor who have expected consumption below the poverty line and most likely will stay poor in the near future). Furthermore, the present study also finds that the proportion of households that have high vulnerability to poverty has more than doubled since the economic crisis. As a result, the proportion of the total vulnerable group (the current poor plus the high vulnerability group) has jumped from less than one-fifth of the population before the crisis to more than one-third after the crisis.     

THE IMPACT OF HEALTH ON POVERTY: EVIDENCE FROM THE SOUTH AFRICAN INTEGRATED FAMILY SURVEY

This paper examines the impact of health status on poverty status, accounting for the endogeneity of health status. Using exogenous measures of health status from the South African Integrated Health Survey, we instrument for health status while allowing for covariation among the unobservables influencing both health and household poverty status. Health status, as captured by the body mass index, is shown to strongly influence poverty status. Households that contain more unhealthy individuals are 60 per cent more likely to be income poor than households that contain fewer unhealthy individuals, and this finding appears invariant to the choice of poverty line.     

Intragenerational Economic Mobility in Indonesia: A Transition from Poverty to the Middle Class in 1993–2014

Economic mobility, especially through expansion of the middle class, will dominate the future of Indonesia’s development agenda. Based on data from five waves of the Indonesia Family Life Survey (IFLS), we found that (1) poverty decreased significantly between 1993 and 2014, from 86.1% to 20.2%, while the middle class grew by almost nine times; (2) 34.4% of the poor moved into the middle class, but 11.9% were still categorised as chronically poor; (3) 42.3% of the middle class did not move into the upper class; (4) the middle and upper classes are vulnerable and easily fall into the lower classes. Our econometric estimations confirm that the drivers of economic mobility are educational attainment, formal employment, water and electricity supply, land ownership, and health investment. These findings suggest that investment in human and physical capital are the two main strategies to expand the middle class.     

Asset Smoothing and Consumption Smoothing: Disaster-coping Strategies in Noncontiguous and Contiguous Destitute Areas

Do households sell assets in order to smooth consumption? The empirical evidence is mixed. Using household- and village-level data in the context of China's poverty alleviation policy, we analyze the relationship between climate shocks and household coping behaviors from the perspective of whether coping strategies to deal with weather shocks are sensitive to the contiguity of destitute areas. Our results indicate that, unlike households living in noncontiguous destitute areas, households struck by weather shocks in contiguous destitute areas tended not to reduce or liquidate assets. To overcome weather shocks, households in contiguous destitute areas instead reduced household consumption, such as food consumption and increased nonfarm working hours. Our findings point to the possibility that the implicit assumption of consumption smoothing coupled with a failure to incorporate explicitly the factor of contiguous regions has led to seemingly divergent findings in the literature regarding consumption smoothing.     

Vulnerability of households to health shocks: an Indonesian study

We examine the effect of illness and injury shocks on work hours and household consumption in Indonesia. Using indices of activities of daily living to measure health shocks, we find that both labour hours and household consumption are influenced by health shocks to household heads. Further, farm households seem to be more seriously affected than non-farm households by health shocks. However, the magnitude of the health effect on household consumption is small, implying that even farm households are well protected on average by the presence of formal and informal risk-coping mechanisms.     

Poverty in South Africa – a statistical analysis

Poverty is one of the major challenges facing democratic South Africa. This article focuses on poverty in South Africa, using the Income and Expenditure Survey conducted in 1995 by Statistics South Africa (formerly the Central Statistical Service). In the first part, different approaches that can be followed in the measurement of poverty are discussed. In the second part, Sen's approach to the measurement of poverty and the Chi-square Automatic Interaction Detection (CHAID) technique have been used to analyse the above data. CHAID is used to explore the relationship between the poverty status of the household (ie poor or non-poor) and other household characteristics. These variables can then be used as predictors of poverty status.     

Determinants of Poverty Status in Rwanda

This study finds determinants of poverty status using the 2010–11 Integrated Household Living Conditions Survey (EICV3) and suggests policy implications for poverty reduction in Rwanda. Characteristics of households related to poverty status are considered in an ordered probit model and marginal effects are calculated. Policies towards supporting a female household, controlling the birthrate of a household and alleviating regional disparity, especially with a focus on rural areas and the Southern Province will be effective. In addition, supporting farmers who do not own a farm and increasing vocational programmes may be also helpful for poverty reduction in Rwanda. Expanding the land use consolidation programme with a facilitating food market may be beneficial.     

Gendered trends in poverty in the post-apartheid period, 1997–2006

This study investigates whether trends in the extent and depth of poverty in South Africa over the past decade have been gendered. We examine whether females are more likely to live in poor households than males and whether this has changed over time, and how poverty has changed for female-headed and male-headed households. We use data from the 1997 and 1999 October Household Surveys and the 2004 and 2006 General Household Surveys, which have the advantage of collecting information on the individual receipt of social grant income. We find that although poverty rates have fallen for both males and females, and for male-headed and female-headed households, the decline has been larger for males and for male-headed households. Gender differences in poverty rates have therefore widened over the period. We show that these findings are robust to the possible underestimation of household income and to adjustments for household composition.     

Rural Nonfarm Employment and Incomes in Chile

This article analyzes the evolution of rural nonfarm employment (RNFE) and income in Chile during 1990–96. The data used come from the National Socioeconomic Survey (CASEN), and from a household survey undertaken by the authors in two municipalities in 1999. The latter contrasted two zones, very different in terms of economic dynamism and rural poverty. We show that during the period, RNFE and incomes increased 10% and 18%, respectively, in 1996, reaching 39% of rural employment and 41% of rural incomes. The rate of multiactivity (the share of households participating in more than one sector) was only 20%, lower than expected, indicating a tendency toward economic specialization in rural income strategies. The determinants of such employment are mainly household characteristics, in particular variables related to human capital, such as the age and gender of the household head, and the schooling of the household members, although also important are access to credit and physical capital. The level of nonfarm income of rural households is determined mainly by the economic context, in particular the economic level and dynamism of the overall zone and the quality of the roads. It is proposed that policies to develop RNFE should be geared to zone characteristics, and should in general favor investments in education, in roads, and in access to credit. Moreover, households headed by women should be the object of special attention. To promote such policies, it will be necessary to address important gaps and weaknesses in the public institutional structure.     

Revisiting wage subsidies: How pro-poor is a South African wage subsidy likely to be?

Wage subsidies have been used in both developed and developing countries to raise employment. After a decade of deliberation, the South African Government recently announced the introduction of a wage subsidy scheme. Given the intrinsic link between unemployment and poverty in South Africa, the belief is that a wage subsidy programme sufficient in scope will also make inroads into poverty. However, the way in which jobs are distributed among poor and non-poor jobseekers is crucial. Our general equilibrium microsimulation model confirms the expectation that a higher wage elasticity of labour demand is associated with larger reductions in poverty. We also find that a greater proportion of new jobs accrue to poor jobseekers when the elasticity is high. While youth-targeting does not improve the poverty-reducing effect of the policy, sectors such as textiles, accommodation, and construction services with their pro-poor employment profiles are good candidates for targeting.     

Income versus Consumption Inequality in Korea: Evaluating Stochastic Dominance Rankings by Various Household Attributes

Using four rounds (1999, 2002, 2005 and 2008) of the Korean Labor and Income Panel Study, the present paper examines determinants of household income and consumption levels and inequalities. Unconditional as well as conditional stochastic dominance tests are performed by year, by household heads’ characteristics (age, education, gender, health, marital status and occupation) and by household characteristics (household type, household size and degree of urbanization). Mean least squares regression techniques are used to predict conditional expectations. The residuals containing effects for each characteristic conditional on the remaining characteristics are then used for the stochastic dominance analysis employing extended Kolmogorov–Smirnov tests of first‐order and second‐order dominance in distribution of income and consumption. The results provide a detailed and up‐to‐date picture of inequality and poverty by subgroup in Korea, which helps in targeting particularly vulnerable groups. While inequality in disposable income is found to be substantial, consumption inequality is less substantial. Households headed by the elderly, the uneducated, the divorced, the widowed, females, and those with health problems are found to be the most vulnerable groups.     

Emerging Urban Poverty and Effects of the Dibao Program on Alleviating Poverty in China

The present paper describes the current urban poverty situation,examines the factors affecting the probability of a household being in poverty and investigates how the urban minimum living standard guarantee (dibao) program helps poor people to get out of poverty. The targeting efficiency of the urban dibao program is discussed. The present study finds that the poverty rate of households with unemployed workers is much higher than that of households without unemployed workers. The urban dibao program is helpful in reducing poverty rates,but it does not reduce poverty rates too much. The government should place emphasis on helping laid-off and unemployed workers to become reemployed. The most urgent problem for the dibao program is improving the efficiency of targeting.     

如何做好易地扶贫搬迁后续就业帮扶

易地扶贫搬迁计划实施后,我国秦巴山区贫困人口稳就业、能致富仍然需要后续帮扶。研究选取了秦巴山区 4 县 1 区的 3015 户易地扶贫搬迁户作为调查对象,通过因子分析对各指标进行归类,再综合运用组合赋权对其进行最后的权重排序,得出影响搬迁户后续就业的主要因素分别是：就业能力、就业方式、就业观念、就业质量和就业信息因素。最后,从提升综合素质、丰富就业方式、优化就业环境三个方面做好易地扶贫搬迁后续就业。     

Single Mothers in Russia: Household Strategies for Coping with Poverty

During the 1990s, the proportion of female-headed households as well as their poverty risk has increased rapidly. Seven rounds of the Russian Longitudinal Monitoring Survey (RLMS) are used to investigate the role that household living arrangements play in single-mother family income dynamics and the major factors that affect the income status of mother-only families in Russia. Enhanced earning power of the single parent as well as a higher level of child benefits increases the likelihood that the single parent family lives separately from other relatives. Increasingly single mothers are choosing to co-reside with other relatives or adults in times of economic stress.     

Assessing Poverty Trends in Indonesia by International Poverty Lines

Indonesia has made well-documented and drastic progress in raising average incomes and reducing poverty. This article adds to the literature by providing a complementary perspective of poverty between 1984 and 2011. We discuss the evolution of poverty in Indonesia using international poverty lines—$1.25 per person per day (in 2005 purchasing power parity dollars) and $2.00 per day, and we add $10.00 per day. We generate estimates of poverty since 1984 and make projections based on various trends in growth and inequality. We find that Indonesia has the potential to become a high-income country by around 2025 and end $1.25-per-day and $2.00-perday poverty by 2030, but this will require strong economic growth and favourable changes in distribution. Looking ahead, the end of poverty in Indonesia may mean that a large proportion of the population will remain vulnerable to poverty for some time to come, suggesting that public policy priorities will need to balance insurance and risk-management mechanisms with more ‘traditional’ poverty policy.