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Income Convergence and the Flow out of Poverty in India, 1994-2005

Author

Listed:
  • Barrientos Quiroga, Paola Andrea

    (Aarhus University)

  • Blunch, Niels-Hugo

    (Washington and Lee University)

  • Datta Gupta, Nabanita

    (Aarhus University)

Abstract

This paper explores the dynamics of income and poverty of rural Indian households, 1994-2005. The estimation strategy consists of convergence analysis to test whether poor households are catching-up in terms of income, followed by transition analysis to test whether poor households are more likely to exit poverty than to remain poor. The identification strategy explicitly addresses issues pertaining to the potential endogeneity and measurement error of initial income and poverty. We find evidence of income convergence and a higher probability of exiting poverty than of remaining poor. The key variables driving these results are education, occupation and asset ownership.

Suggested Citation

  • Barrientos Quiroga, Paola Andrea & Blunch, Niels-Hugo & Datta Gupta, Nabanita, 2015. "Income Convergence and the Flow out of Poverty in India, 1994-2005," IZA Discussion Papers 8929, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8929
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    References listed on IDEAS

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    1. Martin Ravallion, 2012. "Why Don't We See Poverty Convergence?," American Economic Review, American Economic Association, vol. 102(1), pages 504-523, February.
    2. Chakrangi Lenagala & Rati Ram, 2010. "Growth elasticity of poverty: estimates from new data," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 37(12), pages 923-932, October.
    3. Angus Deaton and Jean Drèze & Jean Drèze, 2002. "Poverty and Inequality in India: A Reexamination," Working papers 107, Centre for Development Economics, Delhi School of Economics.
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    More about this item

    Keywords

    IHDS & HDPI data; measurement error; endogeneity; poverty transition; income convergence;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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