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Pro-poor growth or poverty trap? : estimating intergenerational income mobility in rural Philippines

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  • Takahashi, Kazushi

Abstract

Using an intergenerational database covering nearly a quarter of a century, we explored the degree of intergenerational income mobility among individuals who had grown up in rural Central Luzon, the Philippines. We found that the intergenerational income elasticity is significantly lower than unity, at roughly 0.23, indicating that the average income growth rate is higher for children born to poorer families. The detailed analysis, however, revealed that its magnitude significantly varies across percentiles in a U-shape. The results provide supporting evidence of multiple equilibria or poverty trap.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/1211/1/ARRIDE_Discussion_No.382_takahashi.pdf
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Bibliographic Info

Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 382.

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Date of creation: Feb 2013
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Publication status: Published in IDE Discussion Paper. No. 382. 2013.2
Handle: RePEc:jet:dpaper:dpaper382

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Related research

Keywords: Philippines; Poverty; Income distribution; Income; Rural Poverty; Economic Mobility;

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  1. Marcio Laurini, 2007. "A note on the use of quantile regression in beta convergence analysis," Economics Bulletin, AccessEcon, vol. 3(52), pages 1-8.
  2. Schultz, Theodore W, 1980. "Nobel Lecture: The Economics of Being Poor," Journal of Political Economy, University of Chicago Press, vol. 88(4), pages 639-51, August.
  3. Becker, Gary S & Tomes, Nigel, 1986. "Human Capital and the Rise and Fall of Families," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S1-39, July.
  4. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  5. Takahashi, Kazushi & Otsuka, Keijiro, 2007. "Human Capital Investment and Poverty Reduction over Generations: A Case from the Rural Philippines, 1979-2003," IDE Discussion Papers 96, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  6. Mello, Marcelo & Perrelli, Roberto, 2003. "Growth equations: a quantile regression exploration," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(4), pages 643-667.
  7. Lanzona, Leonardo A., 1998. "Migration, self-selection and earnings in Philippine rural communities," Journal of Development Economics, Elsevier, vol. 56(1), pages 27-50, June.
  8. Andrade, Eduardo & Veloso, Fernando & Madalozzo, Regina & Ferreira, Sergio G, 2003. "Do Borrowing Constraints Decrease Intergenerational Mobility in Brazil? A Test Using Quantile Regression," Insper Working Papers wpe_38, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
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