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For Richer or for Poorer ? Evidence from Indonesia, South Africa, Spain, and Venezuela

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  • Fields, Gary S.
  • Cichello, Paul
  • Freije, Samuel
  • Menéndez, Marta
  • Newhouse, David

Abstract

We analyze household income dynamics using longitudinal data from Indonesia, South Africa (KwaZulu-Natal), Spain and Venezuela. In all four countries, households with the lowest reported base-year income experienced the largest absolute income gains. This result is robust to reasonable amounts of measurement error in two of the countries. In three of the four countries, households with the lowest predicted base-year income experienced gains at least as large as their wealthier counterparts. Thus, with one exception, the empirical importance of cumulative advantage, poverty traps, and skill-biased technical change was no greater than structural or macroeconomic changes that favored initially poor households in these four countries.

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Bibliographic Info

Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/1560.

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Date of creation: Apr 2003
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Publication status: Published in Journal of Economic Inequality, 2003, Vol. 1, no. 1. pp. 67-99.Length: 32 pages
Handle: RePEc:dau:papers:123456789/1560

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Keywords: South Africa; Spain; Venezuela; Indonesia; Income dynamics;

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  1. Ramses H. Abul Naga & Robin Burgess, 1997. "Prediction and determination of household permanent income," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 2143, London School of Economics and Political Science, LSE Library.
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  8. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 11(2), pages 41-54, Spring.
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  10. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, World Bank Group, World Bank Group, vol. 11(1), pages 33-57, January.
  11. Dasgupta, Partha & Ray, Debraj, 1986. "Inequality as a Determinant of Malnutrition and Unemployment: Theory," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 96(384), pages 1011-34, December.
  12. John Dreze & Peter Lanjouw & Nicholas Stern, 1992. "Economic Mobility and Agricultural Labour in Rural India: A Case Study," Indian Economic Review, Department of Economics, Delhi School of Economics, Department of Economics, Delhi School of Economics, vol. 27, pages 25-54.
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