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What is behind the decline in poverty since 2000 ? evidence from Bangladesh, Peru and Thailand

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  • Inchauste, Gabriela
  • Olivieri, Sergio
  • Saavedra, Jaime
  • Winkler, Hernan

Abstract

This paper quantifies the contributions of different factors to poverty reduction observed in Bangladesh, Peru and Thailand over the last decade. In contrast to methods that focus on aggregate summary statistics, the method adopted here generates entire counterfactual distributions to account for the contributions of demographics and income from labor and non-labor sources in explaining poverty reduction. The authors find that the most important contributor was the growth in labor income, mostly in the form of farm income in Bangladesh and Thailand and non-farm income in the case of Peru. This growth in labor incomes was driven by higher returns to individual and household endowments, pointing to increases in productivity and real wages as the driving force behind poverty declines. Lower dependency ratios also helped to reduce poverty, particularly in Bangladesh. Non-labor income contributed as well, albeit to a smaller extent, in the form of international remittances in the case of Bangladesh and through public and private transfers in Peru and Thailand. Transfers are more important in explaining the reduction in extreme compared with moderate poverty.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6199.

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Date of creation: 01 Sep 2012
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Handle: RePEc:wbk:wbrwps:6199

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  1. Kolenikov, Stanislav & Shorrocks, Anthony, 2003. "A Decomposition Analysis of Regional Poverty in Russia," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
  3. Jenkins, Stephen P., 2011. "Changing Fortunes: Income Mobility and Poverty Dynamics in Britain," OUP Catalogue, Oxford University Press, number 9780199226436, Octomber.
  4. Train, Kenneth & Wilson, Wesley W., 2008. "Estimation on stated-preference experiments constructed from revealed-preference choices," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 191-203, March.
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Cited by:
  1. Inchauste, Gabriela & Azevedo, João Pedro & Olivieri, Sergio & Saavedra, Jaime & Winkler, Hernan, 2012. "When Job Earnings Are behind Poverty Reduction," World Bank - Economic Premise, The World Bank, issue 97, pages 1-6, November.
  2. S. R. Osmani & Abdul Latif, 2013. "The Pattern and Determinants of Poverty in Rural Bangladesh: 2000-2010," Working Papers 18, Institute of Microfinance (InM).
  3. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.

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