IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/331682.html
   My bibliography  Save this paper

Economic Growth and Income Distribution: Linking Macroeconomic Models with Household Survey Data at the Global Level

Author

Listed:
  • Bussolo, Maurizio
  • De Hoyos, Rafael E.
  • Medvedev, Denis

Abstract

This paper details the methodology for generating a counter-factual within-country distribution of income in the GIDD framework. GIDD stands for Global Income Distribution Dynamics and, as the words imply, it consists of a global microsimulation framework. The GIDD’s framework is based on ex-ante microsimulation methodologies developed in the recent literature, including Bourguignon and Pereira da Silva (2003); Ferreira and Leite (2003, 2004); Chen and Ravallion (2003); and Bussolo, Lay, and van der Mensbrugghe (2005). The objective of the exercise is to create a hypothetical income distribution capturing three major changes in the structure of the population and the economy: (a) change in the age and skill composition of the population, (b) change in the allocation of workers across sectors in the economy, and (c) change in returns to labor by skill and occupation. Our analysis uses country-specific data at the micro level (household surveys) to simulate the impact of the three adjustments. Although in reality these changes take place simultaneously, in our simplified framework they are accommodated in a sequential fashion. This paper explains in some detail the steps of the microsimulation model.

Suggested Citation

  • Bussolo, Maurizio & De Hoyos, Rafael E. & Medvedev, Denis, 2008. "Economic Growth and Income Distribution: Linking Macroeconomic Models with Household Survey Data at the Global Level," Conference papers 331682, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331682
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/331682/files/3800.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Francois Bourguignon & Luiz A. Pereira da Silva, 2003. "The Impact of Economic Policies on Poverty and Income Distribution : Evaluation Techniques and Tools," World Bank Publications - Books, The World Bank Group, number 15090, December.
    2. Lixin Cai & John Creedy & Guyonne Kalb, 2006. "Accounting For Population Ageing In Tax Microsimulation Modelling By Survey Reweighting," Australian Economic Papers, Wiley Blackwell, vol. 45(1), pages 18-37, March.
    3. François Bourguignon & Maurizio Bussolo & Luiz A. Pereira da Silva, 2008. "The Impact of Macroeconomic Policies on Poverty and Income Distribution : Macro-Micro Evaluation Techniques and Tools," World Bank Publications - Books, The World Bank Group, number 6586, December.
    4. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    5. Branko Milanovic & Shlomo Yitzhak, 2006. "Decomposing World Income Distribution: Does The World Have A Middle Class?," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 2(2), pages 88-110.
    6. James B Davies, 2009. "Combining microsimulation with CGE and macro modelling for distributional analysis in developing and transition countries," International Journal of Microsimulation, International Microsimulation Association, vol. 2(1), pages 49-56.
    7. John Cockburn & Luc Savard & Luca Tiberti, 2014. "Macro-Micro Models," Contributions to Economic Analysis, in: Handbook of Microsimulation Modelling, volume 127, pages 275-304, Emerald Group Publishing Limited.
    8. Devarajan, Shantayanan & Lewis, Jeffrey D & Robinson, Sherman, 1993. "External Shocks, Purchasing Power Parity, and the Equilibrium Real Exchange Rate," The World Bank Economic Review, World Bank Group, vol. 7(1), pages 45-63, January.
    9. Anne‐Sophie Robilliard & Sherman Robinson, 2003. "Reconciling Household Surveys and National Accounts Data Using a Cross Entropy Estimation Method," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(3), pages 395-406, September.
    10. François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003. "Representative versus real households in the macro-economic modeling of inequality," Working Papers DT/2003/10, DIAL (Développement, Institutions et Mondialisation).
    11. Tybout, James R. & Westbrook, M. Daniel, 1995. "Trade liberalization and the dimensions of efficiency change in Mexican manufacturing industries," Journal of International Economics, Elsevier, vol. 39(1-2), pages 53-78, August.
    12. François Bourguignon & Maurizio Bussolo & Luis Pereira, 2008. "The Impact of Macroeconomic Policies on Poverty and Income Distribution," PSE-Ecole d'économie de Paris (Postprint) halshs-00754864, HAL.
    13. F. Bourguignon & M. Fournier & M. Gurgand, 2001. "Fast Development With a Stable Income Distribution: Taiwan, 1979–94," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 139-163, June.
    14. Hertel,Thomas W. (ed.), 1999. "Global Trade Analysis," Cambridge Books, Cambridge University Press, number 9780521643740.
    15. Fran??ois Bourguignon & Francisco H. G. Ferreira & Phillippe G. Leite, 2002. "Beyond Oaxaca-Blinder: Accounting for Differences in Household Income Distributions Across Countries," William Davidson Institute Working Papers Series 478, William Davidson Institute at the University of Michigan.
    16. Bourguignon, Francois & Fournier, M & Gurgand, M, 2001. "Fast Development with a Stable Income Distribution: Taiwan, 1979-94," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 139-163, June.
    17. Kym Anderson & John Cockburn & Will Martin, 2010. "Agricultural Price Distortions, Inequality, and Poverty," World Bank Publications - Books, The World Bank Group, number 2430, December.
    18. Morley, Samuel & Nakasone, Eduardo & Pineiro, Valeria, 2008. "The impact of CAFTA on employment, production, and poverty in Honduras:," IFPRI discussion papers 748, International Food Policy Research Institute (IFPRI).
    19. Francois Bourguignon & Francisco H.G. Ferreira & Nora Lustig, 2005. "The Microeconomics of Income Distribution Dynamics in East Asia and Latin America," World Bank Publications - Books, The World Bank Group, number 14844, December.
    20. Caesar B. Cororaton & Erwin L. Corong, 2006. "Agriculture-sector Policies and Poverty in the Philippines: a Computable General-Equilibrium (CGE) Analysis," Working Papers MPIA 2006-09, PEP-MPIA.
    21. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    22. Rob Vos & Niek De Jong, 2003. "Trade Liberalization and Poverty in Ecuador: A CGE Macro-Microsimulation Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 15(2), pages 211-232.
    23. Decaluwe, B. & Patry, A. & Savard, L. & Thorbecke, E., 1999. "Poverty Analysis Within a General Equilibrium Framework," Cahiers de recherche 9909, Université Laval - Département d'économique.
    24. Moreno Brid, Juan Carlos & Pérez Caldentey, Esteban, 2003. "Trade liberalization and economic growth in Central America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    25. repec:dau:papers:123456789/5130 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bourguignon, François & Bussolo, Maurizio, 2013. "Income Distribution in Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1383-1437, Elsevier.
    2. Thomas W. Hertel & Jeffrey J. Reimer, 2006. "Predicting the Poverty Impacts of Trade Reform," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, May.
    3. Colombo, Giulia, 2008. "Linking CGE and Microsimulation Models: A Comparison of Different Approaches," ZEW Discussion Papers 08-054, ZEW - Leibniz Centre for European Economic Research.
    4. Nabil Annabi & Fatou Cissé & John Cockburn & Bernard Decaluwé, 2005. "Trade Liberalisation, Growth and Poverty in Senegal: a Dynamic Microsimulation CGE Model Analysis," Cahiers de recherche 0512, CIRPEE.
    5. Dorothée BOCCANFUSO & Massa COULABY & Govinda R TIMILSINA & Luc SAVARD, 2010. "Economic and Distributional Impact of Bio-Fuels in Mali," EcoMod2010 259600032, EcoMod.
    6. Dorothée Boccanfuso & Antonio Estache & Luc Savard, 2009. "Electricity Reforms In Mali: A Macro–Micro Analysis Of The Effects On Poverty And Distribution," South African Journal of Economics, Economic Society of South Africa, vol. 77(1), pages 127-147, March.
    7. Samir Cury & Euclides Pedrozo, 2016. "Cash Transfer Policies, Taxation and the Fall in Inequality in Brazil An Integrated Microsimulation-CGE Analysis [equilibrium model, microsimulation model, Brazil. Classification-JEL: C68, D58, I38," International Journal of Microsimulation, International Microsimulation Association, vol. 9(1), pages 55-85.
    8. Ole Boysen & Alan Matthews, 2008. "The Impact of Developed Country Agricultural Trade Liberalization on Poverty: A Survey," Working Papers hal-03416399, HAL.
    9. Ferreira , Francisco H. G., 2010. "Distributions in motion: economic growth, inequality, and poverty dynamics," Policy Research Working Paper Series 5424, The World Bank.
    10. Dorothée Boccanfuso & Massa Coulibaly & Luc Savard & Govinda Timilsina, 2018. "Macroeconomic and Distributional Impacts of Jatropha Based Biodiesel in Mali," Economies, MDPI, vol. 6(4), pages 1-22, November.
    11. Grabiella Berloffa & Maria Luigia Segnana, 2004. "Trade, inequality and pro-poor growth: Two perspectives, one message?," Department of Economics Working Papers 0408, Department of Economics, University of Trento, Italia.
    12. Giordano, Paolo & Li, Kun, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications (Working Papers) 4209, Inter-American Development Bank.
    13. Anderson, Edward, 2020. "The impact of trade liberalisation on poverty and inequality: Evidence from CGE models," Journal of Policy Modeling, Elsevier, vol. 42(6), pages 1208-1227.
    14. Banse, M. & van Meijl, H. & Tabeau, A. & Woltjer, G., 2007. "Impact of EU Biofuel Policies on World Agricultural and Food Markets," Conference papers 331604, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. World Bank & International Monetary Fund, 2016. "Global Monitoring Report 2015/2016," World Bank Publications - Books, The World Bank Group, number 22547, December.
    16. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
    17. Bouët, Antoine & Estrades, Carmen & Laborde, David, 2012. "Cooperation vs. non cooperation in the multilateral trading system: the impact on poverty and inequality in developing countries," Conference papers 332287, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Shao-Hsun Keng & Peter F. Orazem, 2019. "Performance pay, the marriage market and rising income inequality in Taiwan," Review of Economics of the Household, Springer, vol. 17(3), pages 969-992, September.
    19. Luca Tiberti & John Cockburn & Martín Cicowiez, 2017. "A top-down behaviour (TDB) microsimulation toolkit for distributive analysis," Working Papers PMMA 2017-24, PEP-PMMA.
    20. Dorothée Boccanfuso & Luc Savard, 2011. "The Food Crisis and its Impacts on Poverty in Senegal and Mali: Crossed Destinies," Development Policy Review, Overseas Development Institute, vol. 29(2), pages 211-247, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:pugtwp:331682. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.