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Income Dynamics, Pro‐Poor Mobility and Poverty Persistence Curves

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  • John Creedy
  • Norman Gemmell

Abstract

This paper explores poverty income dynamics in the form of income mobility by the poor and poverty persistence, making use of simple diagrams. It seeks to illustrate the extent to which income mobility is pro‐poor and when mobility is associated with persistence below, or movement across, a poverty line over a specified time period. While statistical measures can be used to examine detailed characteristics of income dynamics, two simple diagrams are shown to capture the extent of pro‐poor mobility and poverty persistence respectively in ways that allow convenient comparisons. These are referred to as a ‘three Is of mobility’ curve, and a ‘poverty persistence curve’, The curves are illustrated using anonymised Inland Revenue longitudinal individual income data for New Zealand over 2006–2010.

Suggested Citation

  • John Creedy & Norman Gemmell, 2018. "Income Dynamics, Pro‐Poor Mobility and Poverty Persistence Curves," The Economic Record, The Economic Society of Australia, vol. 94(306), pages 316-328, September.
  • Handle: RePEc:bla:ecorec:v:94:y:2018:i:306:p:316-328
    DOI: 10.1111/1475-4932.12426
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    References listed on IDEAS

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    1. Stephen P. Jenkins & Philippe Van Kerm, 2016. "Assessing Individual Income Growth," Economica, London School of Economics and Political Science, vol. 83(332), pages 679-703, October.
    2. François Bourguignon, 2011. "Non-anonymous growth incidence curves, income mobility and social welfare dominance," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 605-627, December.
    3. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    4. Michael Grimm, 2007. "Removing the anonymity axiom in assessing pro-poor growth," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(2), pages 179-197, August.
    5. John Creedy, 1997. "Inequality, mobility and income distribution comparisons," Fiscal Studies, Institute for Fiscal Studies, vol. 18(3), pages 293-302, August.
    6. Van Kerm, Philippe, 2009. "Income mobility profiles," Economics Letters, Elsevier, vol. 102(2), pages 93-95, February.
    7. Essama-Nssah B. & Lambert, Peter J., 2006. "Measuring the pro-poorness of income growth within an elasticity framework," Policy Research Working Paper Series 4035, The World Bank.
    8. Creedy, John & Wilhelm, Mark, 2002. "Income Mobility, Inequality and Social Welfare," Australian Economic Papers, Wiley Blackwell, vol. 41(2), pages 140-150, June.
    9. Creedy, John & Gemmell, Norman, 2017. "Illustrating Income Mobility: Two New Measures," Working Paper Series 6693, Victoria University of Wellington, Chair in Public Finance.
    10. Creedy, John & Gemmell, Norman, 2017. "Illustrating Income Mobility: Two New Measures," Working Paper Series 20282, Victoria University of Wellington, Chair in Public Finance.
    11. Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-327, July.
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    Cited by:

    1. John Creedy & Norman Gemmell, 2022. "Illustrating Income Mobility and Poverty Persistence," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(2), pages 309-323, June.
    2. John Creedy & Norman Gemmell, 2022. "Illustrating Income Mobility and Poverty Persistence," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(2), pages 309-323, June.
    3. Creedy, John & Quy, Ta, 2022. "Income Mobility in New Zealand 2007–2020: Combining Household Survey and Census Data," Working Paper Series 25797, Victoria University of Wellington, Chair in Public Finance.
    4. Creedy, John & Gemmell, Norman, 2018. "Income Inequality in New Zealand: Why Conventional Estimates are Misleading," Working Paper Series 7629, Victoria University of Wellington, Chair in Public Finance.
    5. Alinaghi, Nazila & Creedy, John & Gemmell, Norman, 2022. "Income Inequality and the Accounting Period in New Zealand: Evidence from Administrative Data," Working Paper Series 21899, Victoria University of Wellington, Chair in Public Finance.
    6. Alinaghi, Nazila & Creedy, John & Gemmell, Norman, 2022. "Inter-Decile Income Movements of Individuals in New Zealand: Evidence from Administrative Data," Working Paper Series 21357, Victoria University of Wellington, Chair in Public Finance.
    7. Creedy, John & Gemmell, Norman, 2022. "Summary Measures of Equalising Income Mobility Based on ‘Three Is of Mobility’ Curves," Working Paper Series 22008, Victoria University of Wellington, Chair in Public Finance.

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