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FGT poverty measures and the mortality paradox: Theory and Evidence

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  • LEFEBVRE, Mathieu

    (University of Liège)

  • PESTIEAU, Pierre

    ()
    (University of Liège; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; PSE and CEPR)

  • PONTHIERE, Grégory

    ()
    (Paris School of Economics and Ecole Normale Supérieure, Paris)

Abstract

Income-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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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2013042.

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Date of creation: 11 Sep 2013
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Handle: RePEc:cor:louvco:2013042

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Keywords: income-differentiated mortality; FGT poverty measures;

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  1. Mathieu Lefebvre & Pierre Pestieau & Gregory Ponthiere, 2013. "Measuring poverty without the Mortality Paradox," Social Choice and Welfare, Springer, vol. 40(1), pages 285-316, January.
  2. Deaton, A., 2001. "Health, Inequality, and Economic Development," Papers 200, Princeton, Woodrow Wilson School - Development Studies.
  3. repec:ese:iserwp:2003-06 is not listed on IDEAS
  4. Harriet Orcutt Duleep, 1986. "Measuring the Effect of Income on Adult Mortality Using Longitudinal Administrative Record Data," Journal of Human Resources, University of Wisconsin Press, vol. 21(2), pages 238-251.
  5. Ravi Kanbur & Diganta Mukherjee, 2007. "Premature Mortality And Poverty Measurement," Bulletin of Economic Research, Wiley Blackwell, vol. 59(4), pages 339-359, October.
  6. John S. Greenlees & James E. Duggan & Robert Gillingham, 2007. "Mortality and Lifetime Income," IMF Working Papers 07/15, International Monetary Fund.
  7. Backlund, Eric & Sorlie, Paul D. & Johnson, Norman J., 1999. "A comparison of the relationships of education and income with mortality: the national longitudinal mortality study," Social Science & Medicine, Elsevier, vol. 49(10), pages 1373-1384, November.
  8. Jusot, Florence, 2004. "Mortalité et revenu en France : construction et résultats d’une enquête cas-témoins," Economics Papers from University Paris Dauphine 123456789/451, Paris Dauphine University.
  9. Amartya Sen, 1995. "Mortality as an Indicator of Economic Success and Failure," Innocenti Lectures innlec95/2, UNICEF Innocenti Research Centre.
  10. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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