Is labor income responsible for poverty reduction ? a decomposition approach
Demographics, labor income, public transfers, or remittances: Which factor contributes the most to observed reductions in poverty? Using counterfactual simulations, this paper accounts for the contribution labor income has made to the observed changes in poverty over the past decade for a set of 16 countries that have experienced substantial declines in poverty. In contrast to methods that focus on aggregate summary statistics, the analysis generates entire counterfactual distributions that allow assessing the contributions of different factors to observed distributional changes. Decompositions across all possible paths are calculated so the estimates are not subject to path-dependence. The analysis shows that for most countries in the sample, labor income is the most important contributor to changes in poverty. In ten of the countries, labor income explains more than half of the change in moderate poverty; in another four, it accounts for more than 40 percent of the reduction in poverty. Although public and private transfers were relatively more important in explaining the reduction in extreme poverty, more and better-paying jobs were the key factors behind poverty reduction over the past decade.
|Date of creation:||01 Apr 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/Email:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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).
- Stanislav Kolenikov & Anthony Shorrocks, 2005. "A Decomposition Analysis of Regional Poverty in Russia," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 25-46, 02.
- Dollar, David & Kraay, Aart, 2001.
"Growth is good for the poor,"
Policy Research Working Paper Series
2587, The World Bank.
- Ravallion, Martin & Shaohua Chen, 1996.
"What can new survey data tell us about recent changes in distribution and poverty?,"
Policy Research Working Paper Series
1694, The World Bank.
- Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," World Bank Economic Review, World Bank Group, vol. 11(2), pages 357-82, May.
- Ravallion, Martin, 2001.
"Growth, Inequality and Poverty: Looking Beyond Averages,"
Elsevier, vol. 29(11), pages 1803-1815, November.
- Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank.
- 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.
- Ravallion, Martin & Chen, Shaohua, 2007.
"China's (uneven) progress against poverty,"
Journal of Development Economics,
Elsevier, vol. 82(1), pages 1-42, January.
- Ricardo Paes de Barros & Mirela de Carvalho & Samuel Franco & Rosane Mendonça, 2006. "Uma Análise das Principais Causas da Queda Recente na Desigualdade de Renda Brasileira," Discussion Papers 1203, Instituto de Pesquisa Econômica Aplicada - IPEA.
- Joao Pedro Azevedo & Minh Cong Nguyen & Viviane Sanfelice, 2012. "ADECOMP: Stata module to estimate Shapley Decomposition by Components of a Welfare Measure," Statistical Software Components S457562, Boston College Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:6414. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.