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.
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dig-okr-10986155522024-08-08T14:37:37Z Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach Azevedo, Joao Pedro Inchauste, Gabriela Olivieri, Sergio Saavedra, Jaime Winkler, Hernan CASH TRANSFER PROGRAMS CASH TRANSFERS CHANGES IN POVERTY CONSUMPTION AGGREGATE CONSUMPTION EXPENDITURES COUNTERFACTUAL DECLINE IN POVERTY DECOMPOSABLE POVERTY DECOMPOSITION METHODOLOGY DECOMPOSITION TECHNIQUES ECONOMIC GROWTH EMPLOYMENT OF WOMEN EXTREME POVERTY FAMILY INCOME FAMILY MEMBERS HOUSEHOLD CONSUMPTION HOUSEHOLD CONSUMPTION PER CAPITA HOUSEHOLD INCOME HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS INCOME INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROWTH INCOME INEQUALITY INEQUALITY INTERNATIONAL POVERTY LINE INTERNATIONAL POVERTY LINES NUTRITION PER CAPITA CONSUMPTION POLITICAL ECONOMY POOR POVERTY ACROSS COUNTRIES POVERTY DYNAMICS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY HEADCOUNT RATES POVERTY INCIDENCE POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY SEVERITY PRIVATE TRANSFERS REDUCTION IN POVERTY REGIONAL POVERTY RURAL RURAL INCOME SAVINGS SOCIAL POLICIES SOCIAL PROTECTION TOTAL POVERTY TRANSFER PROGRAMS WELFARE MEASURE 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. 2013-09-04T14:59:02Z 2013-09-04T14:59:02Z 2013-04 http://documents.worldbank.org/curated/en/2013/04/17599289/labor-income-responsible-poverty-reduction-decomposition-approach https://hdl.handle.net/10986/15552 English en_US Policy Research Working Paper;No. 6414 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank application/pdf text/plain World Bank, Washington, DC |
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Banco Mundial |
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Estados Unidos |
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US |
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Bibliográfico |
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En linea |
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dig-okr |
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biblioteca |
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America del Norte |
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Biblioteca del Banco Mundial |
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English en_US |
| topic |
CASH TRANSFER PROGRAMS CASH TRANSFERS CHANGES IN POVERTY CONSUMPTION AGGREGATE CONSUMPTION EXPENDITURES COUNTERFACTUAL DECLINE IN POVERTY DECOMPOSABLE POVERTY DECOMPOSITION METHODOLOGY DECOMPOSITION TECHNIQUES ECONOMIC GROWTH EMPLOYMENT OF WOMEN EXTREME POVERTY FAMILY INCOME FAMILY MEMBERS HOUSEHOLD CONSUMPTION HOUSEHOLD CONSUMPTION PER CAPITA HOUSEHOLD INCOME HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS INCOME INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROWTH INCOME INEQUALITY INEQUALITY INTERNATIONAL POVERTY LINE INTERNATIONAL POVERTY LINES NUTRITION PER CAPITA CONSUMPTION POLITICAL ECONOMY POOR POVERTY ACROSS COUNTRIES POVERTY DYNAMICS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY HEADCOUNT RATES POVERTY INCIDENCE POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY SEVERITY PRIVATE TRANSFERS REDUCTION IN POVERTY REGIONAL POVERTY RURAL RURAL INCOME SAVINGS SOCIAL POLICIES SOCIAL PROTECTION TOTAL POVERTY TRANSFER PROGRAMS WELFARE MEASURE CASH TRANSFER PROGRAMS CASH TRANSFERS CHANGES IN POVERTY CONSUMPTION AGGREGATE CONSUMPTION EXPENDITURES COUNTERFACTUAL DECLINE IN POVERTY DECOMPOSABLE POVERTY DECOMPOSITION METHODOLOGY DECOMPOSITION TECHNIQUES ECONOMIC GROWTH EMPLOYMENT OF WOMEN EXTREME POVERTY FAMILY INCOME FAMILY MEMBERS HOUSEHOLD CONSUMPTION HOUSEHOLD CONSUMPTION PER CAPITA HOUSEHOLD INCOME HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS INCOME INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROWTH INCOME INEQUALITY INEQUALITY INTERNATIONAL POVERTY LINE INTERNATIONAL POVERTY LINES NUTRITION PER CAPITA CONSUMPTION POLITICAL ECONOMY POOR POVERTY ACROSS COUNTRIES POVERTY DYNAMICS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY HEADCOUNT RATES POVERTY INCIDENCE POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY SEVERITY PRIVATE TRANSFERS REDUCTION IN POVERTY REGIONAL POVERTY RURAL RURAL INCOME SAVINGS SOCIAL POLICIES SOCIAL PROTECTION TOTAL POVERTY TRANSFER PROGRAMS WELFARE MEASURE |
| spellingShingle |
CASH TRANSFER PROGRAMS CASH TRANSFERS CHANGES IN POVERTY CONSUMPTION AGGREGATE CONSUMPTION EXPENDITURES COUNTERFACTUAL DECLINE IN POVERTY DECOMPOSABLE POVERTY DECOMPOSITION METHODOLOGY DECOMPOSITION TECHNIQUES ECONOMIC GROWTH EMPLOYMENT OF WOMEN EXTREME POVERTY FAMILY INCOME FAMILY MEMBERS HOUSEHOLD CONSUMPTION HOUSEHOLD CONSUMPTION PER CAPITA HOUSEHOLD INCOME HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS INCOME INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROWTH INCOME INEQUALITY INEQUALITY INTERNATIONAL POVERTY LINE INTERNATIONAL POVERTY LINES NUTRITION PER CAPITA CONSUMPTION POLITICAL ECONOMY POOR POVERTY ACROSS COUNTRIES POVERTY DYNAMICS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY HEADCOUNT RATES POVERTY INCIDENCE POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY SEVERITY PRIVATE TRANSFERS REDUCTION IN POVERTY REGIONAL POVERTY RURAL RURAL INCOME SAVINGS SOCIAL POLICIES SOCIAL PROTECTION TOTAL POVERTY TRANSFER PROGRAMS WELFARE MEASURE CASH TRANSFER PROGRAMS CASH TRANSFERS CHANGES IN POVERTY CONSUMPTION AGGREGATE CONSUMPTION EXPENDITURES COUNTERFACTUAL DECLINE IN POVERTY DECOMPOSABLE POVERTY DECOMPOSITION METHODOLOGY DECOMPOSITION TECHNIQUES ECONOMIC GROWTH EMPLOYMENT OF WOMEN EXTREME POVERTY FAMILY INCOME FAMILY MEMBERS HOUSEHOLD CONSUMPTION HOUSEHOLD CONSUMPTION PER CAPITA HOUSEHOLD INCOME HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS INCOME INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROWTH INCOME INEQUALITY INEQUALITY INTERNATIONAL POVERTY LINE INTERNATIONAL POVERTY LINES NUTRITION PER CAPITA CONSUMPTION POLITICAL ECONOMY POOR POVERTY ACROSS COUNTRIES POVERTY DYNAMICS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY HEADCOUNT RATES POVERTY INCIDENCE POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY SEVERITY PRIVATE TRANSFERS REDUCTION IN POVERTY REGIONAL POVERTY RURAL RURAL INCOME SAVINGS SOCIAL POLICIES SOCIAL PROTECTION TOTAL POVERTY TRANSFER PROGRAMS WELFARE MEASURE Azevedo, Joao Pedro Inchauste, Gabriela Olivieri, Sergio Saavedra, Jaime Winkler, Hernan Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach |
| description |
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. |
| topic_facet |
CASH TRANSFER PROGRAMS CASH TRANSFERS CHANGES IN POVERTY CONSUMPTION AGGREGATE CONSUMPTION EXPENDITURES COUNTERFACTUAL DECLINE IN POVERTY DECOMPOSABLE POVERTY DECOMPOSITION METHODOLOGY DECOMPOSITION TECHNIQUES ECONOMIC GROWTH EMPLOYMENT OF WOMEN EXTREME POVERTY FAMILY INCOME FAMILY MEMBERS HOUSEHOLD CONSUMPTION HOUSEHOLD CONSUMPTION PER CAPITA HOUSEHOLD INCOME HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS INCOME INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROWTH INCOME INEQUALITY INEQUALITY INTERNATIONAL POVERTY LINE INTERNATIONAL POVERTY LINES NUTRITION PER CAPITA CONSUMPTION POLITICAL ECONOMY POOR POVERTY ACROSS COUNTRIES POVERTY DYNAMICS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY HEADCOUNT RATES POVERTY INCIDENCE POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY SEVERITY PRIVATE TRANSFERS REDUCTION IN POVERTY REGIONAL POVERTY RURAL RURAL INCOME SAVINGS SOCIAL POLICIES SOCIAL PROTECTION TOTAL POVERTY TRANSFER PROGRAMS WELFARE MEASURE |
| author |
Azevedo, Joao Pedro Inchauste, Gabriela Olivieri, Sergio Saavedra, Jaime Winkler, Hernan |
| author_facet |
Azevedo, Joao Pedro Inchauste, Gabriela Olivieri, Sergio Saavedra, Jaime Winkler, Hernan |
| author_sort |
Azevedo, Joao Pedro |
| title |
Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach |
| title_short |
Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach |
| title_full |
Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach |
| title_fullStr |
Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach |
| title_full_unstemmed |
Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach |
| title_sort |
is labor income responsible for poverty reduction? a decomposition approach |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013-04 |
| url |
http://documents.worldbank.org/curated/en/2013/04/17599289/labor-income-responsible-poverty-reduction-decomposition-approach https://hdl.handle.net/10986/15552 |
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