FGT poverty measures and the mortality paradox: Theory and Evidence
AbstractIncome-differentiated mortality, by reducing the share of poor persons in the population, leads to what can be called the "Mortality Paradox": the worse the survival conditions of the poor are, the lower the measured poverty is. We show that the extent to which FGT measures (Foster Greer Thorbecke 1984) underestimate old-age poverty under income-differentiated mortality depends on whether the prematurely dead would have, in case of survival, suffered from a more severe poverty than the average surviving population. Taking adjusted FGT measures with ex- tended lifetime income profiles as a benchmark, we identify conditions under which the selection bias induced by income-differentiated mortality is higher for distribution-sensitive measures than for headcount measures. Finally, we show, on the basis of data on poverty in 11 European economies, that the size of the selection bias varies across different sub-classes of FGT measures and across countries.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2013042.
Date of creation: 11 Sep 2013
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income-differentiated mortality; FGT poverty measures;
Other versions of this item:
- Mathieu Lefebvre & Pierre Pestieau & Grégory Ponthière, 2013. "FGT Poverty Measures and the Mortality Paradox: Theory and Evidence," PSE Working Papers halshs-00845490, HAL.
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
This paper has been announced in the following NEP Reports:
- NEP-AGE-2013-09-24 (Economics of Ageing)
- NEP-ALL-2013-09-24 (All new papers)
- NEP-DEM-2013-09-24 (Demographic Economics)
- NEP-DEV-2013-09-24 (Development)
- NEP-EUR-2013-09-24 (Microeconomic European Issues)
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