Changes in poverty and the stability of income distribution in Argentina: evidence from the 1990s via decompositions

From 1992 to 2001, despite its rapid economic growth during the early 1990s, Argentina experienced a period characterized by increasing income inequality and poverty. An axiomatically modified Datt-Ravallion decomposition, that separates changes in poverty rates into mean and inequality components, will illustrate how each of them has contributed to those changes. Contrary to the claims of much of the recent cross-country literature, income inequality does not appear stable in Argentina. Previous results are extended in two key ways. First, the empirical density function is used to calculate the inequality component, without assuming a particular functional form for the Lorenz curve. Second, both components are recomputed without the vaguely defined Datt-Ravallion residual, which improves interpretability.decomposition of changes in poverty, poverty measures, inequality and growth.

Pro-poor Growth during Exceptional Growth. Evidence from a Transition Economy

The paper uses a range of methods to assess changes in income, poverty and income distribution between 2001 and 2002 in Kazakhstan. It is found that outstanding GDP growth has been translated into very modest growth in mean household income. However, both income poverty and inequality have decreased significantly and growth has been 'pro-poor', which is explained by changes in inequality accounting for almost all the changes in poverty. The elasticity of poverty with respect to both growth and inequality is also found to be high. These findings suggest that GDP changes can be, at times, disjoint from household income performance and that, when this happens, income redistribution can still play a key role for poverty reduction. Yet a much greater reduction in poverty would have occurred if mean income would also have risen. Hence, the distribution of GDP growth among factors of production and the distribution of income among households are the cornerstones of poverty reduction rather than GDP growth alone.Growth, Poverty, Inequality, Kazakhstan

“Leftist”, “Rightist” and Intermediate Decompositions of Poverty: Variations with an Application to China from 1990 to 2003

This paper investigates the influence of invariance axioms in the decomposition of observed poverty variations into growth and inequality effects. After a complete and critical review of the invariance axioms suggested in the literature, we show that few information is needed for the ordering of the effects respectively obtained through scale, translation and intermediate invariance. Using Chinese data for the period 1990-2003, we find that some commonly observed results of the decomposition are contingent to the invariance axiom choices whilst other are robust to changes in ethical preferences.Poverty, inequality effect, growth effect, decomposition, scale invariance, translation invariance, intermediate invariance, China.

Urban-Rural Inequality in Living Standards in Africa

welfare, poverty, growth, income distribution

“Leftist”, “Rightist” and Intermediate Decompositions of Poverty Variations with an Application to China from 1990 to 2003

This paper investigates the influence of invariance axioms in the decomposition of observed poverty variations into growth and inequality effects. After a complete and critical review of the invariance axioms suggested in the literature, we show that few information is needed for the ordering of the effects respectively obtained through scale, translation and intermediate invariance. Using Chinese data for the period 1990-2003, we find that some commonly observed results of the decomposition are contingent to the invariance axiom choices whilst other are robust to changes in ethical preferences.Poverty, inequality effect, growth effect, Decomposition, scale invariance, translationinvariance, intermediate invariance, China

Working Paper 115 - Analyzing Pro-Poor Growth in Southern Africa: Lessons from Mauritius and South Africa

Based on the methodology of Ravallionand Chen (2003), Kakwani and Pernia(2000) and Kakwani, Khandker and Son(2003) and using household survey data,we analyze poverty, inequality and pro-poorchanges in South Africa over the period1995-2005 and in Mauritius over theperiod 2001-2006. Conditions are verydifferent in these two countries. SouthAfrica is one of the least equal countries inthe developing world while inequality inMauritius is relatively low in comparison toother African countries. Similarly, using areference threshold of USD 3 a day, wefind that poverty headcount was initiallyaround 42% in South Africa and 6% inMauritius. Moreover, in addition to theseinitial differences, the two countries haveexperienced very different pro-poor growthpaths. Temporal differences reveal thatinequalities have increased significantly inSouth Africa over the period and that thepoverty headcount in 2005 would havebeen around 10 percentage points lowerwithout this strong adverse redistributioneffect. South African growth has been antipoorrelatively speaking. Conversely,growth was absolutely pro-poor inMauritius over the period 2001-2006.Deeper analysis is conducted across areasof residence (urban and rural) andaccording to educational achievements(some schooling versus no schooling) andgender. A comparison between Mauritiusand South Africa allows for a betterunderstanding of both growth andredistribution effects on poverty and fordrawing some policy recommendationstowards reducing poverty in thesecountries.

Trends in Income Inequality, Pro-Poor Income Growth and Income Mobility

We provide an analytical framework within which changes in income inequality over time are related to the pattern of income growth across the income range, and the reshuffling of individuals in the income pecking order. We use it to explain how it was possible both for 'the poor' to have fared badly relatively to 'the rich' in the USA during the 1980s (when income inequality grew substantially), and also for income growth to have been pro-poor. Income growth was also pro-poor in Western Germany, more so than in the USA, and inequality did not rise as much.inequality; income growth; income mobility; pro-poor growth; reranking

Trends in income inequality, pro-poor income growth and income mobility

We provide an analytical framework within which changes in income inequality over time are related to the pattern of income growth across the income range, and the reshuffling of individuals in the income pecking order. We use it to explain how it was possible both for ‘the poor’ to have fared badly relatively to ‘the rich’ in the USA during the 1980s (when income inequality grew substantially), and also for income growth to have been pro-poor. Income growth was also pro-poor in Western Germany, more so than in the USA, and inequality did not rise as much.inequality ; income growth ; income mobility ; pro-poor growth ; reranking

Inequality and Poverty in Africa in an Era of Globalization: Looking Beyond Income to Health and Education

This paper describes changes over the past 15-20 years in non-income measures of wellbeing?education and health?in Africa. We expected to find, as we did in Latin America, that progress in the provision of public services and the focus of public spending in the social sector would contribute to declining poverty and inequality in health and education, even in an environment of stagnant or worsening levels of income poverty. Unfortunately, our results indicate that in the area of health, little progress is being made in terms of reducing pre-school age stunting, a clear manifestation of poor overall health. Likewise, our health inequality measure showed that while there were a few instances of reduced inequality along this dimension, there was, on balance, little evidence of success in improving equality of outcomes. Similar results were found in our examination of underweight women as an indicator of general current health status of adults. With regard to education, the story is somewhat more positive. However, the overall picture gives little cause for complacency or optimism that Africa has reaped, or will soon reap the potential benefits of the process of globalization.health, education, wellbeing, Africa

“Leftist”, “Rightist” and Intermediate Decompositions of Poverty Variations with an Application to China from 1990 to 2003

This paper investigates the influence of invariance axioms in the decomposition of observed poverty variations into growth and inequality effects. After a complete and critical review of the invariance axioms suggested in the literature, we show that few information is needed for the ordering of the effects respectively obtained through scale, translation and intermediate invariance. Using Chinese data for the period 1990-2003, we find that some commonly observed results of the decomposition are contingent to the invariance axiom choices whilst other are robust to changes in ethical preferences.Poverty;inequality effect;growth effect;Decomposition;scale invariance;translationinvariance;intermediate invariance;China