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FGT poverty measures and the mortality paradox: Theory and Evidence

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  • LEFEBVRE, Mathieu

    (University of Liège)

  • PESTIEAU, Pierre

    (University of Liège; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; PSE and CEPR)

  • PONTHIERE, Grégory

    (Paris School of Economics and Ecole Normale Supérieure, Paris)

Abstract

Income-differentiated mortality, by reducing the share of poor persons in the population, leads to what can be called the "Mortality Paradox": the worse the survival conditions of the poor are, the lower the measured poverty is. We show that the extent to which FGT measures (Foster Greer Thorbecke 1984) underestimate old-age poverty under income-differentiated mortality depends on whether the prematurely dead would have, in case of survival, suffered from a more severe poverty than the average surviving population. Taking adjusted FGT measures with ex- tended lifetime income profiles as a benchmark, we identify conditions under which the selection bias induced by income-differentiated mortality is higher for distribution-sensitive measures than for headcount measures. Finally, we show, on the basis of data on poverty in 11 European economies, that the size of the selection bias varies across different sub-classes of FGT measures and across countries.

Suggested Citation

  • LEFEBVRE, Mathieu & PESTIEAU, Pierre & PONTHIERE, Grégory, 2013. "FGT poverty measures and the mortality paradox: Theory and Evidence," LIDAM Discussion Papers CORE 2013042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2013042
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    References listed on IDEAS

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    1. James E Duggan & Robert Gillingham & John S Greenlees, 2008. "Mortality and Lifetime Income: Evidence from U.S. Social Security Records," IMF Staff Papers, Palgrave Macmillan, vol. 55(4), pages 566-594, December.
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    3. Mathieu Lefebvre & Pierre Pestieau & Gregory Ponthiere, 2013. "Measuring poverty without the Mortality Paradox," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(1), pages 285-316, January.
    4. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
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    6. Sen, Amartya, 1998. "Mortality as an Indicator of Economic Success and Failure," Economic Journal, Royal Economic Society, vol. 108(446), pages 1-25, January.
    7. repec:dau:papers:123456789/451 is not listed on IDEAS
    8. Backlund, Eric & Sorlie, Paul D. & Johnson, Norman J., 1999. "A comparison of the relationships of education and income with mortality: the national longitudinal mortality study," Social Science & Medicine, Elsevier, vol. 49(10), pages 1373-1384, November.
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    Cited by:

    1. Marie-Louise Leroux & Pierre Pestieau & Grégory Ponthière, 2015. "Longévité différentielle et redistribution : enjeux théoriques et empiriques," CIRANO Working Papers 2015s-06, CIRANO.
    2. Leroux, Marie-Louise & Pestieau, Pierre & Ponthière, Grégory, 2015. "Longévité différentielle et redistribution : enjeux théoriques et empiriques," L'Actualité Economique, Société Canadienne de Science Economique, vol. 91(4), pages 465-497, Décembre.

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    More about this item

    Keywords

    income-differentiated mortality; FGT poverty measures;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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