Abstract
This paper analyzes the Indian National Sample Survey data spanning 1987/88-2011/12 to uncover patterns of transition into and out of different classes of the consumption distribution. At the aggregate level, income growth has accelerated, accompanied by accelerating poverty decline. Underlying these trends is a process of mobility, with 40-60 percent of the population transitioning between consumption classes and increasing mobility over time. Yet, the majority of those who escape poverty remain vulnerable. Most of those who are poor were also poor in the preceding period and, thus, are likely to be chronically poor. The characteristics of upwardly mobile households contrast with those of the poor; these households are also far less likely to experience downward mobility. The paper also finds that states exhibit heterogenous mobility patterns.
Highlights
Income distribution as a topic of analysis and measurement has mushroomed in recent decades, since Anthony Atkinson argued in his presidential address to the Royal Economic Society in 1997 that the subject should be ‘brought back in from the cold’ (Atkinson 1997)
We investigate in this paper patterns of welfare dynamics in India over the quarter-century between 1987 and 2012
For comparison purposes, and to gauge the overall robustness of our findings, we report findings on mobility based on quintile-based transition matrices
Summary
Dang and Lanjouw (2017) noted that notwithstanding the shorter duration of the latter interval, mobility across the consumption categories was higher in the 2009/10–2011/12 interval than in the preceding interval This finding is confirmed in these tables, which show that the percentage of the population off the diagonal of the transition matrices increased from below 37 percent between 2004/05 and 2009/10 to nearly 42 percent between 2009/10 and 2011/12 (comparing panels A in Tables A.3 and A.4—results are similar for panels B).. Mobility across Quintiles Our discussion of mobility so far has focused on transitions across the three per-capita consumption categories that we defined: poor, vulnerable, and secure These categories are expressed in absolute terms, based on the national poverty line and a vulnerability line that is expressed as either twice the national poverty line or, alternatively, as the income level below which the non-poor in 2004/05 face an average risk of falling back into poverty by 2011/12 of no less than 20 percent. This pattern is qualitatively similar when we compare a pair of two other states that are closer to the middle range of the performance, Bihar and Punjab (Figures A.1 and A.2 in the Appendix)
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