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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Bibliographic Details
Main Authors: |
Azevedo, Joao Pedro,
Inchauste, Gabriela,
Olivieri, Sergio,
Saavedra, Jaime,
Winkler, Hernan |
Language: | English en_US |
Published: |
World Bank, Washington, DC
2013-04
|
Subjects: | 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, |
Online Access: | 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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