Measuring the Pro - Poorness of Income Growth Within an Elasticity Framework
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Publisher: World Bank Publications
Published:
Total Pages: 32
ISBN-13:
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Measuring the Pro-Poorness of Income Growth within an Elasticity Framework
Author: B. Essama-Nssah
Publisher:
Published: 2016
Total Pages: 32
ISBN-13:
DOWNLOAD EBOOKPoverty reduction has become a fundamental objective of development, and therefore a metric for assessing the effectiveness of various interventions. Economic growth can be a powerful instrument of income poverty reduction. This creates a need for meaningful ways of assessing the poverty impact of growth. This paper follows the elasticity approach to propose a measure of pro-poorness defined as a weighted average of the deviation of a growth pattern from the benchmark case. The measure can help assess pro-poorness both in terms of aggregate poverty measures, which are members of the additively separable class, and at percentiles. It also lends itself to a decomposition procedure, whereby the overall pattern of income growth can be unbundled, and the contributions of income components to overall pro-poorness identified. An application to data for Indonesia in the 1990s reveals that the amount of poverty reduction achieved over that period remains far below what would have been achieved under distributional neutrality. This conclusion is robust to the choice of a poverty measure among members of the additively separable class, and can be tracked back to changes in expenditure components.
Measuring the Pro-poorness of Income Growth Within an Elasticity Framework
Author: Boniface Essama-Nssah
Publisher:
Published: 2006
Total Pages: 40
ISBN-13:
DOWNLOAD EBOOKPoverty reduction has become a fundamental objective of development, and therefore a metric for assessing the effectiveness of various interventions. Economic growth can be a powerful instrument of income poverty reduction. This creates a need for meaningful ways of assessing the poverty impact of growth. This paper follows the elasticity approach to propose a measure of pro-poorness defined as a weighted average of the deviation of a growth pattern from the benchmark case. The measure can help assess pro-poorness both in terms of aggregate poverty measures, which are members of the additively separable class, and at percentiles. It also lends itself to a decomposition procedure, whereby the overall pattern of income growth can be unbundled, and the contributions of income components to overall pro-poorness identified. An application to data for Indonesia in the 1990s reveals that the amount of poverty reduction achieved over that period remains far below what would have been achieved under distributional neutrality. This conclusion is robust to the choice of a poverty measure among members of the additively separable class, and can be tracked back to changes in expenditure components.
A Unified Framework for Pro-poor Growth Analysis
Author: Boniface Essama-Nssah
Publisher: World Bank Publications
Published: 2004
Total Pages: 36
ISBN-13:
DOWNLOAD EBOOK"Starting with a general impact indicator as an evaluation criterion, Essama-Nssah offers an integrative framework for a unified discussion of various concepts and measures of pro-poor growth emerging from the current literature. He shows that whether economic growth is considered pro-poor depends fundamentally on the choice of evaluative weights. In addition, the author's framework leads to a new indicator of the rate of pro-poor growth that can be interpreted as the equally distributed equivalent growth rate. This is a distribution-adjusted rate of growth that depends on the chosen level of inequality aversion. Illustrations based on data for Indonesia in the 1990s show a strong link between growth and poverty reduction in that country. A decomposition of the observed poverty outcomes reveals the extent to which changes in inequality have blunted the poverty impacts of both growth and contraction. Finally, the results also demonstrate that absolute and relative indicators of pro-poor growth can lead to conflicting conclusions from the same set of facts. This paper'-- a product of the Poverty Reduction Group, Poverty Reduction and Economic Management Network-- is part of a larger effort in the network to understand the distributional implications of economic growth"-- World Bank web site.
Links Between Growth, Inequality, and Poverty: A Survey
Author: Ms. Valerie Cerra
Publisher: International Monetary Fund
Published: 2021-03-12
Total Pages: 54
ISBN-13: 1513572660
DOWNLOAD EBOOKIs there a tradeoff between raising growth and reducing inequality and poverty? This paper reviews the theoretical and empirical literature on the complex links between growth, inequality, and poverty, with causation going in both directions. The evidence suggests that growth can be effective in reducing poverty, but its impact on inequality is ambiguous and depends on the underlying sources of growth. The impact of poverty and inequality on growth is likewise ambiguous, as several channels mediate the relationship. But most plausible mechanisms suggest that poverty and inequality reduce growth, at least in the long run. Policies play a role in shaping these relationships and those designed to improve equality of opportunity can simultaneously improve inclusiveness and growth.
The Composition of Growth Matters for Poverty Alleviation
Author: Norman Loayza
Publisher: World Bank Publications
Published: 2006
Total Pages: 38
ISBN-13:
DOWNLOAD EBOOKThis paper contributes to explain the cross-country heterogeneity of the poverty response to changes in economic growth. It does so by focusing on the structure of output growth. The paper presents a two-sector theoretical model that clarifies the mechanism through which the sectoral composition of growth and associated labor intensity can affect workers' wages and, thus, poverty alleviation. Then in presents cross-country empirical evidence that analyzes first, the differential poverty-reducing impact of sectoral growth at various levels of disaggregation, and the role of unskilled labor intensity in such differential impact. The paper finds evidence that not only the size of economic growth but also its composition matters for poverty alleviation, with the largest contributuons from labor-intensive sectors (such as agriculture, construction, and manufacturing). The results are robust to the influence of outliers, alternative explanations, and various poverty measures.
Estimating the Elasticity of Growth in the US Using the Generalized Means of Income
Author: T. M. Tonmoy Islam
Publisher:
Published: 2015
Total Pages: 0
ISBN-13:
DOWNLOAD EBOOKEconomic growth has been a key mantra to encourage poverty reduction in developing countries. Studies have shown that a one percent GDP growth can reduce absolute poverty, or increase the average income of the poorest quintile, by one percent or more in developing countries. The literature calls this relationship between poverty reduction and growth as growth elasticity. However, there is very little research available studying the extent of growth elasticity in a developed economy. I fill this vacuum in literature by applying the method of generalized means of income outlined in Foster and Székely (2008) on micro-level data to estimate the elasticity of growth in the US. The generalized means of income satisfies all the axioms of a good income standard, which makes it a preferred method to measure the elasticity of growth. My analysis shows that most of the growth in the US is driven by the richer segment of the society. The 'wealthier' poor get some benefit from growth - a one percent increase in per-capita state-level income leads to about 0.9 percent increase in their income in the short and long-run. However, this relationship diminishes when I calculate the growth elasticity of those in deeper poverty. Sector-wise decomposition of income shows that the 'wealthier' poor benefits from an increase in the size of the service sector, but those in deeper poverty do not see this benefit.
Causes and Consequences of Income Inequality
Author: Ms.Era Dabla-Norris
Publisher: International Monetary Fund
Published: 2015-06-15
Total Pages: 39
ISBN-13: 1513547437
DOWNLOAD EBOOKThis paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.
Inequality of Opportunity, Inequality of Income and Economic Growth
Author: Mr.Shekhar Aiyar
Publisher: International Monetary Fund
Published: 2019-02-15
Total Pages: 23
ISBN-13: 1484396987
DOWNLOAD EBOOKWe posit that the relationship between income inequality and economic growth is mediated by the level of equality of opportunity, which we identify with intergenerational mobility. In economies characterized by intergenerational rigidities, an increase in income inequality has persistent effects—for example by hindering human capital accumulation— thereby retarding future growth disproportionately. We use several recently developed internationally comparable measures of intergenerational mobility to confirm that the negative impact of income inequality on growth is higher the lower is intergenerational mobility. Our results suggest that omitting intergenerational mobility leads to misspecification, shedding light on why the empirical literature on income inequality and growth has been so inconclusive.
Measurement and Meaning
Author: Estanislao Gacitúa-Marió
Publisher: World Bank Publications
Published: 2001
Total Pages: 100
ISBN-13:
DOWNLOAD EBOOKThis report consists of a collection of case studies from Latin America combining qualitative and quantitative research methods for the analysis of poverty within a social exclusion framework. The first chapter provides an overview of the differences between quantitative and qualitative methods, and the gains from using both types of methods in applied work. The other chapters are devoted to three case studies on reproductive health in rural Argentina, the targeting of social programs in Chile, and social exclusion in urban Uruguay. Each case study was prepared within the broader context of country-specific economic and sectoral work at the World Bank. The chapters are: (1) Combining Qualitative and Quantitative Methods for Policy Research on Poverty within a Social Exclusion Framework (Carine Clert, Estanislao Gacitua-Mario, and Quentin Wodon); (2) Reproductive Health in Argentina's Poor Rural Area (Estanislao Gacitua-Mario, Corinne Sianes, and Quentin Wodon); (3) The Targeting of Government Programs in Chile (Carine Clert and Quentin Wodon); and (4) Social Exclusion in Urban Uruguay. Each chapter contains references. (Author/SLD).
