Poverty Gap Research Articles

Remittances, migration and poverty. A study for Mexico and Central America

In the last two decades, remittances have acquired great importance as a source of external income for various developing economies. In the particular case of the Latin America region, the United States represents the most important destination, with nearly 25 million Latinos living in this country. This paper analyses the effect that migration and the sending of remittances have on poverty in Mexico and Central America. The results show that a 10% increase in migration to the United States (as a percentage of the population in the destination country) translates into an 8.6% reduction in the population living on less than US$ 1.90 a day; while the poverty gap is reduced by 12.8%. With regard to the sending of remittances, a reduction of 6.7% is observed in the poor population and 10% in relation to the poverty gap. These results are in line with previous literature and, in general, are maintained to various specifications.

Immobility Results in Poverty Gap Among Upper and Lower Caste in India: An Empirical Analysis

Immobility Results in Poverty Gap Among Upper and Lower Caste in India: An Empirical Analysis

REGIONAL INTEGRATION IN AFRICA UNDER THE SHADOW OF THE MORAL ECONOMY OF THE EU-AFRICA RELATIONSHIP

Since the first moves of decolonization, African countries have not overcome the negative effects of colonization and are still facing underdevelopment, poverty gap, and low share in world trade The interregional relationship established with the European countries after independence does not seem to fulfill the development promises the European Economic Community made at the beginning. With many regional economic communities and conflicting trade rules, regional integration in Africa is so complex that it is described as a spaghetti bowl, in line with Bhagwati's definition. In addition, all the delays and discussions surrounding the Economic Partnership Agreements and the uncertainties regarding the future of the relations experienced before the signing of the post-Cotonou Agreement in April 2021, have also strained the interregional relationship with the EU. The article aims to discuss Africa's development and regional integration problems by blending the Moral Economy approach and the Historical Discourse Analysis method. This article discusses the current development and regional integration problems in Africa from a moral economy approach, combining it with Discourse Historical Analysis. It considers regional integration as one of the norms that the moral economy of the EU-Africa interregional relationship has been based on and explores its construction within this moral economy from a historical perspective. The main concern of this article is to investigate the construction of the regional integration norm in parallel to the development co-operation discourse and to explain its role in obscuring the impact of EU development co-operation on the current development and regional integration process in Africa, as well as the problems in the EU-Africa interregional relationship itself.

Poverty Reduction in the United States During its Middle-Income Stage of Development

This paper is one of three country studies of successful anti-poverty measures during upper middle-income levels, the other two being Japan and the Republic of Korea. Though the US did not advance an explicit anti-poverty agenda until the 1960s, assisting the economically distressed was a key priority of the New Deal. Average education, life expectancy and earnings all increased during 1920-1960. Poverty fell by two-thirds to around 22 percent as the mean income rose and income inequality fell beginning in the 1940s. Economic gaps among Black Americans, women, the South, and rural areas converged, though these gaps persist to this day. Migration, urbanization, and the structural shift away from agricultural jobs transformed the economy. These, along with factors such as strong collective bargaining and access to education, helped keep low incomes rising amidst overall growth. New Deal policies that impacted market incomes (labor laws, farm subsidies, education) fueled poverty reduction more than transfers (direct relief, work relief, social insurance). Though welfare programs helped lower the poverty gap and were important policy innovations, the payment levels were too low to bring people out of poverty—defined in a manner appropriate for a country on the cusp of high income—until well after 1960.

Poverty status and its determinants in rural households of Enda-mohoni woreda, Northern Ethiopia

This research generates specific, contextualized identification of existing poverty status and poverty causing factors in Enda-mohoni woreda in Tigray Region, Ethiopia. Agroecology based cluster sampling technique was employed to select 154 household heads. Logit model was used to analyze household poverty status and FGT poverty index estimation model for poverty incidence analysis. The poverty analysis found a 30.9% headcount ratio, 4.4% poverty gap ratio, and 1% poverty severity. Furthermore, the result of the logistic regression revealed that among the explanatory variables used in the model, family size and agroecological location of the household head were found to positively influence HHs' poverty status at (P<0.01) and (P<0.05) respectively. Whereas, owning livestock and marital status of the HHH were found to negatively influence HHs' poverty status at (P<0.05) and (P<0.1) respectively. It is with appropriate policies that recognize the importance of poverty features and trends would it be possible for more people to make positive exits from poverty risk.

Analisis Pengaruh Zakat dan Infak Terhadap Tingkat Kedalaman Kemiskinan, Keparahan Kemiskinan dan Gini Rasio di Indonesia Tahun 2007-2018

Poverty in Indonesia has decreased in recent years, though slowing. Besides that, zakat and infaq have increased from year to year. Based on this phenomenon, this study aims to determine the effect of zakat and infaq on poverty and income disparities in Indonesia. The method used is a quantitative approach with descriptive and inferential analysis (multiple linear regression analysis). The data used are secondary data with zakat, infaq, poverty gap index, poverty severity index, and gini coefficient (gini ratio). The results of T test and F test shows the value of sig. 0,00 less than 0,05. Overall, zakat and infaq have a significant effect on the poverty gap, poverty severity and gini ratio. While partially, zakat and infaq also have a significant effect on the poverty gap, poverty severity and gini ratio. Zakat has a negative relationship to the poverty gap and poverty severity, while infaq has a negative relationship to the gini ratio.

Foreign remittances and income inequality in Pakistan: A Pooled Regression Analysis

The people from developing countries like Pakistan move to developed countries to earn their bread and butter. Consequently, such migrants remit a handsome part of their earnings to their dependents living in homeland. Foreign remittances have multidimensional impact on the economy of a developing country. The study evaluates the impact of foreign remittances on income inequality in Pakistan by estimating the set of fixed effect and random effect models using the pooled data from eight household income and expenditure surveys between 1998/99 and 2015/16. Gini coefficient as well as generalized entropy measure is used to estimate income inequality, but the results remain intact. It is observed that foreign remittances have statistically significant favorable impacts on income inequality in Pakistan. Further, the results are robust and insensitive to control variables (e.g. income and poverty measures, headcount ratio, poverty gap and squared poverty gap). The policy measure is that Bureau of Emigration and Overseas Employment (BEOE) should be empowered to explore the job opportunities in developed countries. The government should assist the migrants through subsidizing the visa and migration processes to capitalize the foreign remittances.

Rwanda: Lessons from Applied Intergovernmental Fiscal Equalization Formula

It is a well-known fact that budgetary allocations need to be based on a just formula for balanced service delivery in the modern world. This paper describes the intergovernmental formula designed for Rwanda in 2003 to allocate grants from the central to local governments (LGs). First, the previous criterion, the Local Authority Budget Support Fund, was reviewed. This was followed by a literature review and field visits. Finally, the specifications of the mathematical model are described, followed by the proxy selection, data analysis, econometric evaluation, and estimations used in the study. In 2003, data analysis revealed that LGs had low fiscal capacities and ubiquitous fiscal needs. These were proxied by mean own source revenues and expenditure needs, respectively, in the proposed formula. The difference between the two was taken as the mean fiscal gap. This formula corrected the inherent weaknesses in the previous transfer system. It proposed weighting parameters to determine subnational transfer entitlements. Additionally, it constructed and applied welfare poverty and fiscal gap indices that captured the behavior of LGs in terms of wellbeing, fiscal needs, and revenue capacity for the first time in Rwanda. The study recommendations were entirely adopted by the government. The formula was used to allocate unconditional grants from the central government to LGs to improve service delivery and reduce poverty. The study also highlights that any successful transfer formula design depends on how the following are determined—the transfer pool, weights, proposed variables, and proxy indices—and how they enter the model.

How much would it cost to eliminate the at-risk-of-poverty rate? Evidence from the European Union

The aim of this paper is to assess the cost of eliminating the at-risk-of-poverty rate, based on the Lorenz curve approach (the Gini coefficient, the Kakwani progressivity coefficient). A set of new equations that allow to find a link between cost of closing the relative poverty gap and income inequality is proposed. The main finding is that, after the initial allocation of social benefits, the share of benefits that are still needed to close the relative poverty gap in the pre-government income is a function not only of the at-risk-of-poverty rate, but also of the relative poverty line, the Gini coefficient of income of the poor, and the Kakwani progressivity coefficient of extra benefits. The empirical application of the methodology adopted is illustrated with the use of EU household sample (the data is derived from the EU-Survey on Income and Living Conditions). In line with the suggested decomposition, in the research sample ranking countries according to the at-risk-of-poverty rate does not coincide with the way they are sorted by the share of extra benefits.

Measures, Distribution and Decomposition of Poverty: An Empirical Analysis in Nepal

Background: Poverty has been in existence for many years and continues to exist in a large number of countries. Poverty is “pronounced in wellbeing” where wellbeing (and poverty) in broader term, focuses on the capability of the individual to function in society and poor people often lack key capabilities, they may have not adequate income, education, or be in poor health or feel powerless or lack of political freedoms. In Nepal, despite the decreasing trend in poverty incidence, still the current prevalence is very high with the comparison of other countries.
 Objective: To identify, compare and decomposition of different poverty measures by rural urban area and ecological belt in Nepal.
 Materials and Methods: Data set of Nepal Living Standard Survey (NLSS) conducted by Central Bureau of Statistics in 2011 consisting of various variables related to food, non-food consumption, income, demographic, socioeconomics, etc., have been used for analysis. In order to measure the poverty, different measures such as head count ratio, poverty gap, poverty severity, Watts index and Sen-Shorrocks-Thon index were used. The comparisons of different poverty measures across different variables were attempted including use of appropriate poverty curves. The decomposition of poverty indices by consumption components using the Shapley value along with Lump-Sum Targeting approach has been applied.
 Results: Average per capita consumption is 34186.5, the head count index, poverty gap and poverty severity of Nepal are 0.2518, 0.0545 and 0.0182, respectively. The poverty measures of rural area are higher than the urban area, and the incidence of poverty is highest in mountain ecological belt. Food and non-food component allows to 46.39% & 28.42% of the total population to be non-poor of headcount index, 60.19% & 34.34% for poverty gap index and 59.96% & 38.20% for poverty severity, respectively.
 Conclusion: For both within and overall population, rural area has the higher impact than urban area and each measure of poverty in mountain is significantly higher than hill and terai. To reduce within group headcount index and poverty gap, policymakers should give more focus to rural area and mountain region.

Gendered Strategies among Northern Migrants in Ghana: The Role of Social Networks

The migration trends from Northern to Southern Ghana is not a new phenomenon and it is rooted in historical antecedents. Migration scholars in Ghana have attributed these migration trends from an economic lens, arguing that migration has become a household strategy to diversify incomes. However, little research has focused on social networks serving as migration channels for migrants in the informal sector. In view of this, this paper explores the gendered strategies and social networks that the northern migrants use to gain access to the labour market. This study used a qualitative approach. Primary data was collected using the in-depth interview tool. A sampled population of 58 (37 women and 21 men) migrants from Northern Ghana to the Greater Accra Region (Madina), constituted the respondents. Findings indicate that integration and assimilation of migrants into their new community is a function of ethnicity. Strong and weak social ties facilitate migration differently. Whereas the former facilitates migration, the latter offers an enduring support for new migrants in searching for jobs and accommodation on arrival. The study concludes that knowledge of how social networks organize gender strategies within the migration continuum is important for policy intervention to close the poverty gap between North and South.

Екологізація економіки та роль держави: ретроспективний аналіз наукових підходів

У статті висвітлено хронологію процесу екологізації економік країн світу, спад домінування моделі економіки, що призводить до виснаження природного капіталу та енергетичних ресурсів, масштабної бідності, збільшення економічного і соціального розриву між країнами та регіонами світу. Зміна глобальної парадигми, перехід від стратегії «зростання» до стратегії «розвитку» дозволяє здійснити перехід від ресурс-орієнтованої та енерговитратної економіки до ресурсо- та енергоощадної економіки.
 Метою статті є систематизація наукових напрацювань щодо формування концепції «зеленої» економіки, ролі держави у ній та виявлення змін у моделі інвестування.
 Наукова новизна статті полягає у систематизації теоретичного обґрунтування екологізації економіки, сталого розвитку та концепції «зеленої» економіки. Ці процеси обумовлюють переміщення приватного капіталу від «коричневих» до «чистих» («зелених») технологій, а державі відводиться роль регулюючого суб’єкта.
 Висновки. Визначено, що в економічній теорії існує ряд шкіл (неокласична, посткейнсіанська, екологічної економіки), які включають розгляд питань екології в проблемне поле своїх досліджень, що має суттєвий вплив на теорію та практику публічного управління та адміністрування. З’ясовано, що екологізація економіки, «озеленення» виробництва і технологій поширились із глобального рівня на рівень реальних господарюючих суб’єктів, що спричинило формування моделі соціально-відповідального інвестування. Втручання держави у цей процес є необхідним, однак вона повинна бути регулюючим суб’єктом, виконувати роль каталізатора, а не ставати альтернативним джерелом «зеленого» фінансування.

English

This article assesses the link between the four pillars of gender equality and extreme poverty in sub-Saharan Africa. Accordingly, the objective of the paper is to empirically examine whether the four pillars of gender equality, namely women’s health, women education, political participation of women and economic participation facilitate extreme poverty alleviation in sub-Saharan Africa. Data were collected from the World Bank development indicators and World Economic Forum Global Gender Gap Index for 25 sub-Saharan African countries whose data appear on both indexes for three years into the SDGs era. Th e paper applied a quantitative approach with secondary data on poverty gap index drawn from the World Economic Forum Poverty Gap Index for sub-Saharan Africa. Data for twenty-fi ve sub-Saharan African countries were analysed using the fi xed-eff ect panel data regression approach using the Hauseman model selection test. Findings from the analysis indicate that, ceteris paribus, an increase in the threegender equity variables namely economic participation of women, education of women and political participation and leadership of women in sub-Saharan Africa has a signifi cant potential to reduce extreme poverty in sub-Saharan Africa within the sample of study. Since the fi ndings of this study have shown that extreme poverty can be reduced through increased women participation in economic activity, education and leadership, the SDG of poverty alleviation can be improved in sub-Saharan Africa through better government provision of economic, educational and leadership opportunities for women such as providing women with free-interest small business start-up funds, free education for women and supporting women to ascend and survive in political and leadership positions in sub-Saharan Africa through a balanced quota for female leadership positions. Given that the women’s health variable did not prove to be signifi cant on extreme poverty, further research is recommended to separate the health variable into rural health and urban health variables in order to examine the possibility that either of the health clusters might contribute signifi cantly to reducing extreme poverty. Th is paper contributes to existing literature by providing an empirical evidence to show that gender equality in sub-Saharan Africa is a viable policy strategy for achieving the SDGs 2030 Agenda of extreme poverty eradication in sub-Saharan Africa; the paper also provides empirical model for future study.

Where is Nepal in the Food System Transition?

In Nepal, 27% of GDP is contributed by the agriculture sector with 65.56% of households depending upon agriculture for employment. However, 51.8% of households are still food insecure and 25.2% are under the poverty line. Given these facts, it is interesting to watch how the economic growth and food system will go forward, despite the paradoxical history of development-modest growth but brisk poverty reduction has already been experienced. While literature noted that the transition to a food system is rapid for developing countries, very limited analysis linking the food system to its drivers and its consequences exists in the context of Nepal. The study examined food system transition using the secondary data from different sources and analyzing it through a conceptual framework of the food system. The study showed the contemporary food security issue is disparity in food access among the peoples driven by the poverty gap. The trends and scenarios shown in results revealed that the tendencies of food system drivers are on positive sides, but the structural foundation of agriculture (land issues, labor migration, mechanization, adaptations, etc.) is not so strong. This situation has created a serious question on the transition of the food system in Nepal. For this, the policy priorities are imperative to be institutionalized at all three levels of government-federal, state and local, and need to be concerted to transform the food system.

Regression trees for poverty mapping

SummaryPoverty mapping is used to facilitate efficient allocation of aid resources, with the objective of ending poverty, the first of the United Nations Sustainable Development Goals. Levels of poverty across small geographic domains within a country are estimated using a statistical model, and the resulting estimates displayed on a poverty map. Current methodology for small area estimation of poverty utilises various forms of regression modelling of household income or expenditure. Fitting sound models requires skill and time, especially where there are many candidate regressors and even more possible interactions. Tree‐based methods have the potential to screen more quickly for interactions and also to provide reliable small area estimates in their own right. A classification tree technique has been presented by Bilton et al. (Comput Stat Data Anal115: 53–66, 2017) for estimating poverty incidence, but although adjustments were made to incorporate complex survey designs and estimate mean square error, classification trees are unable to estimate the associated non‐categorical deprivation measures of poverty gap and poverty severity. The focus of this paper is regression trees, because they enable all three core poverty measures of incidence, gap and severity to be estimated. Using regression trees, two alternative methodologies, parametric and non‐parametric, are explored for producing household level predictions that are then amalgamated up to small‐area level. New methods are developed for mean square error estimation. The properties of the small area estimates based on these regression tree techniques are then evaluated and compared with linear mixed models both by simulation and by using real poverty data from Nepal.

Analysis of poverty, income inequality and their effects on food insecurity in southern Ethiopia

BackgroundReduction of poverty and income inequality, and ensuring food security is the main goal of the Ethiopian government. In response, declines of national poverty were observed over time, but it is still a worrying concern as a significant proportion of the population remains poor. However, the trends of income inequality are rising substantially over time and thereby might exacerbate the food insecurity status in the country. This study aims to measure, identify determinants, and analyze the effects of poverty and income inequality on food insecurity status of households in Sawla town of southern Ethiopia.MethodologyA two-stage sampling technique was used to select 227 sampled households’ heads. This study applied descriptive statistics, Foster Greer Thorbecke approach, binary logistic, and quantile regression models to analyze the data.ResultsThe finds of this study reveals that 34% of households are living below the poverty line with a poverty gap index of 11% and severity index of 5.6%. The average income inequality with Gini coefficient index is found to be 0.447. Both poverty and income inequality result is quite larger than the national average of the country. The sample households are food insecure with 20.7% depth and 13% severity indexes of food insecurity. The levels of poverty and income inequality are more worrisome among the food-insecure households. Moreover, the logistic regression model shows that levels of education, family size, being divorced, the main occupation, savings, and house ownership negatively and significantly affected the household level of poverty. Quantile regression model result shows that age, level of education, income, family size, health, savings, remittances, electric, credit, and house ownership affected households’ level of income of the study area.ConclusionThe study suggests strengthening the existing welfare-oriented strategies by undertaking intra-household resource allocations for women, encouraging participation of diversified business activities, promoting the use of family planning methods, strengthening formal education, microfinance institution and housing program by targeting impoverished households in the town.

A Tale of Transition: Trends of Catastrophic Health Expenditure and Impoverishment in Urban China, 1986-2009

ABSTRACT From 1986 to 2009, China’s health system reform first adopted a market-oriented approach and later reemphasized the role of the government starting from 2002. China’s oscillating health care financing policies present us a unique opportunity to examine the consequences of government-led financing and market-oriented financing measures. This study uses the Urban Household Survey, a diary data in China that covers the period of 1986 to 2009, to examine the long-run trends in the incidence and intensity of catastrophic health expenditure and medical impoverishment. Four major findings emerge. First, the incidence and intensity of catastrophic health expenditure in urban Chinese households increased rapidly between 1986 and 2002, whereas they stabilized after 2002. Second, the incidence of medical impoverishment and its depth in the poverty gap remained stable before 2002 and decreased rapidly after 2002. Third, income and regional inequality in measures of catastrophic health expenditure widened from 1986 to 2002. They narrowed in the 2000s but remain wide. Fourth, income and regional inequality in medical impoverishment remained unchanged between 1986 and 2002 and narrowed substantially after 2002. All these results suggest that China’s two cycles of health care reform generated significantly different outcomes in financial protection, holding lessons for the ongoing health care reform in China and other countries.

Relative Poverty, Redistribution and Fiscal Gains: What Are the Roles of Taxes and Transfers?

China has made great achievements in anti-poverty in recent years. With the elimination of absolute poverty, relative poverty will become the future poverty alleviation task in China. From the experience of various countries, fiscal instruments are an important means to solve relative poverty, but the role of fiscal instruments in solving relative poverty in China is worth discussing. From the perspectives of taxation and public transfers, using the CFPS2012 micro data and taking 40%, 50% and 60% of the median income of sample as the relative poverty line, this paper analyzes the relative poverty reduction, income redistribution, fiscal impoverishment and gains of China’s fiscal instruments, and compares the policy performance under the absolute poverty and relative poverty standard. Furthermore, the sensitivity analysis and scenario simulation are carried out in this paper through the reclassification of pension, adjustment of income equivalent scale treatment and policy redesign. This paper draws the following conclusions: First, the relative poverty status of the whole sample and the rural sample has been improved after taxes and transfers. However, the relative poverty of the urban areas has increased. Social security contributions and income taxes have increased relative poverty, while dibao, agricultural subsidies and subsidies for returning farmland to forests have played a large role in reducing relative poverty. Public transfers are important to reduce rural poverty. Second, income inequality has improved. The redistribution effect of government transfers is larger than that of social security payment and individual income taxes. In the urban sample, the marginal contribution of the redistribution effect of individual income taxes is larger than that in the rural sample, and the marginal contribution of transfer payments such as dibao, subsidies for returning farmland to forests, agricultural subsidies, subsidies for households with five guarantees, and subsidies for households with extreme poverty is higher than that in the urban sample. Third, the level and proportion of people who benefit from fiscal instruments are always higher than that of fiscal impoverishment. Although relative poverty and redistribution have been improved, the fiscal impoverishment may be concealed by fiscal gains. Fourth, there is consistent policy feasibility between absolute poverty and relative poverty. In the sensitivity and scenario analysis, we find that after the pension is reclassified as transfer payment, it will become an important factor to reduce relative poverty, reduce the poverty gap and improve the redistribution, and the expansion of transfer is conducive to the urban relative poverty reduction.

Research on China’s Regional Carbon Emission Quota Allocation in 2030 under the Constraint of Carbon Intensity

To achieve the goal of carbon dioxide emission reduction in 2030 promised to the United Nations, China unified the Carbon Trading System (CTS) in 2017 since carbon dioxide quota allocation is one of the core issues of carbon trading. It is imperative to establish a flexible carbon quota allocation system based on the unbalanced characteristics of resource endowment and economic development in different regions. Unlike previous distribution research, this paper considers five principles, which are fairness principle, efficiency principle, feasibility principle, development principle, and innovation principle. The maximum deviation method is used to research the carbon emission quota allocation in 30 provinces of China, and the results are compared with those under the single principle and the information entropy method. The results reveal that the distribution under the single principle is severely unbalanced, making the region have a strong sense of relative deprivation. The maximum deviation method is better than the information entropy method to achieve carbon intensity by 2030. It is also conducive to promote the coordinated development of the regional economy, narrow the poverty gap, and achieve sustainable development.

Public family spending, labour productivity, income inequality and poverty gap in the group of seven countries

Purpose. Comparable data on distribution of family income provide reference point for determining economic performance of any country, opportunity to assess effects of income inequality and poverty drivers that are either country- or region-specific. This study analysed the effectiveness of composite indices of public spending on family benefits, labour productivity, macroeconomic performance indicators and moderating factors in reducing income inequality and poverty gap in the Group of Seven (G7) countries from 1980 to 2019. Methodology. The study employed fixed effects Least Squares regression model in panel environment within the framework of empirical econometric methodologies. The composite indices comprised public spending on family benefits in cash and kind, unemployment allowance payments, tax on personal income, labour productivity, harmonised unemployment rate, consumer price index, real GDP growth rate, GDP per capita and per hour worked, fertility rate and trade. After graphical analysis of the data, order of integration was via unit root tests. Hausman test was carried out to choose between fixed and random effects models. Subsequently, parameters of the models were estimated and evaluated for significance at the 0.05 critical level. Findings. The results showed that percentage changes in income inequality and poverty gap indices differed for same percentage change in components of the composite indices. Some variable-specific percentage changes in income inequality and poverty gap were statistically significant, while others were not. However, the overall percentage changes was statistically significant. The paper concluded that while some specific effectiveness of the explanatory variables in reducing income inequality and poverty gap was not significant, their joint effectiveness significantly reduced poverty. Therefore, it is pertinent that family-oriented fiscal policy thrusts should be strengthened and sustained so as to continually reduce income inequality and, ultimately, narrow poverty gap in the countries. Limitations. The study considered the G7 countries for a period of 40 years. The limitations were that the variables considered to influence income inequality and poverty gap in the countries were both exhaustive. Also, the results were conditioned to the method used, and different methods can alternatively be used by other researchers and the results compared with this. Originality. The study is original research paper. It has neither been published in any other peer-reviewed journal not under consideration for publication by any other journal.