Poverty Gap Research Articles

Beyond Piketty: A new perspective on poverty and inequality in India

The socio-economic literature has focused much on how overall inequality in income distribution (frequently measured by the Gini coefficient) undermines the “trickle down” effect. In other words, the higher the inequality in the income distribution, the lower is the growth elasticity of poverty. However, with the publication of Piketty’s magnum opus (2014), and a subsequent study by Chancel and Piketty (2017) of evolution of income inequality in India since 1922, the focus has shifted to the income disparity between the richest 1% (or 0.01%) and the bottom 50%. Their central argument is that the rapid growth of income at the top end of millionaires and billionaires is a by-product of growth. The present study extends this argument by linking it to poverty indices in India. Based on the India Human Development Survey 2005–12 – a nationwide panel survey-we examine the links between poverty and income inequality, especially in the upper tail relative to the bottom 50%, state affluence (measured in per capita income) and their interaction or their joint effect. Another feature of our research is that we analyse their effects on the FGT class of poverty indices. The results are similar in as much as direction of association is concerned but the elasticities vary with the poverty index. The growth elasticities are negative and significant for all poverty indices. In all three cases, the disparity between the income share of the top 1% and share of the bottom 50% is associated with greater poverty. These elasticities are much higher than the (absolute) income elasticities except in the case of the poverty gap. The largest increase occurs in the poverty gap squared – a 1% greater income disparity is associated with a 1.24% higher value of this index. Thus the consequences of even a small increase in the income disparity are alarming for the poorest.

The Gendered Poverty Effects of the COVID-19 Pandemic in Colombia.

Everyone, across borders, race and gender, is affected by the global COVID-19 pandemic—but not equally. In this paper, we examine a burgeoning new literature discussing the employment effects of COVID-19. We explore the extent to which COVID-19 will exacerbate gendered employment disparities, income generation gaps, and, ultimately, poverty gaps, using a simple microsimulation methodology. We test our approach in Colombia, which has implemented an unparalleled number of mitigation measures and has reopened its economy earlier than regional neighbors. We find that COVID-19 increases the poverty headcount to a daunting degree (between 3.0 and 9.1 pp increases). Mitigation measures vary considerably in their individual impact (up to 0.9 pp poverty reduction). A fiscally neutral Universal Basic Income program would cause larger poverty reductions. Importantly, both men and women report similar poverty impacts from the pandemic and mitigation policies, reflecting the magnitude of the downturn, the design of interventions and our own poverty measure.Electronic supplementary materialThe online version of this article (10.1057/s41287-020-00328-2) contains supplementary material, which is available to authorized users.

An assessment of the potential of using carbon tax revenue to tackle poverty

A carbon tax is one of the measures used to reduce GHG emissions, as it provides a strong political instrument for reaching the goal, stated in the Paris Agreement, of limiting the global mean temperature increase to well below 2 °C. While one aspect of a carbon tax is its ability to change income distribution, no quantitative assessment has been made within the context of global poverty. Here, we explore future poverty scenarios and show the extent to which carbon tax revenue, obtained to limit global warming to well below 2 °C, has the potential to help eradicate poverty. In order to better understand the relationship between poverty and climate change mitigation policy, we developed a novel modelling framework that includes a module representing poverty indicators in the conventional integrated assessment model. We found that the poverty gap, which is a measure of the shortfall in income relative to the poverty line, is 84 billion US dollars (USD) and that the carbon tax revenue potential for the above-mentioned 2 °C consistent climate change mitigation would be 1600 billion USD in 2030. Many low-income countries cannot fill the poverty gap using only their own domestic revenue; however, this shortfall could be met by using a portion of the revenue in high-income countries. Our results demonstrate that climate change mitigation can have a great potential in synergy effects for resolving poverty and illustrates the importance of international cooperation.

The Impact of International Trade on Poverty in Least Developed Countries: With Empirical Study on Bangladesh and Somalia

Whiles an expected rippling ramification of international trade and globalization is poverty alleviation, several other equally important factors affect poverty levels in a country. Unfortunately, poverty levels across the world continue to surge especially in least developed countries. This research paper therefore sets to analyze the impact of international trade on poverty levels and inequality in least developed countries; Bangladesh and Somalia. Using a multi-case study research strategy, the standard cross-country regression analysis model and collecting data from secondary sources, it was revealed that in Bangladesh, trade openness and GDP Per Capita international trade parameters tested have significant influence on poverty gap but inflation rates do not. In addition, trade openness and inflation rates do not also have significant statistical relation with poverty incidence except for GDP Per Capita. On the flipside, trade openness and GDP Per Capita international trade parameters do not have any significant influence on poverty gap in Somalia but inflation rates do have real influence. With regards to the impact on poverty incidence, again trade openness, GDP Per Capita and inflation rates do not reflect appreciable statistical relation with poverty incidence. The study further show that trade openness and GDP Per Capita in Bangladesh significantly explains the observed variations in GINI indices, unlike inflation rates which does not show significant relations. However, in Somalia trade openness, GDP Per Capita and inflation do not account for the observed variations in GINI indices; implying a negative correlation between GDP Per Capita and inequality in Somalia. It is recommended that Bangladesh must continually measure and closely monitor its trade openness and GDP Per Capita indicators in their quest to reduce poverty gap, and also check their GDP Per Capita to reduce poverty incidence. Somalia on the other hand must develop and implement inflation reduction strategies in order to minimize poverty gap. In general, least developed nations should explore their available natural resources to their comparative advantage, empower local producers and limit the competition from foreign products. Moreover, they should adopt trade and poverty analysis models that would help in monitoring critical indicators in real time. Future works should also consider expanding the dynamics of cause and effect in international trade practice, poverty levels and income distribution across any geographical jurisdiction.

Health insurance and poverty of the older population in the United States: The importance of a health inclusive poverty measure

For decades, the US poverty rate has been lower among those 65 and older than among those under 65, due to more generous public transfers to the older population (Preston, 1984; Moffitt, 2015). Yet this comparison understates true poverty differences because it does not capture the greater eligibility for health insurance benefits among those 65 and older. We use a Health Inclusive Poverty Measure (HIPM; Korenman and Remler, 2016), which incorporates health needs and benefits, to estimate poverty rates and impacts of health insurance and other benefits on poverty. For those 65+, the HIPM poverty rate was nearly 2 percentage points lower than Census’ Supplemental Poverty Measure (SPM) rate, while for younger persons, the HIPM rate was 1.6 percentage points higher, due to their greater unmet health insurance needs. Among those 65+, Medicare and Social Security account for reductions in HIPM poverty of 15 to 25 percentage points and 35 to 40 percentage points, respectively. The average HIPM poverty gap after all transfers was 4% of the HIPM threshold among persons 65+ vs. 13% among those under 65. Compared to the SPM, the HIPM appears to classify a needier population as poor. Adopting a HIPM could provide more complete description of disadvantage across the age distribution and more accurate guidance for social policy (NAS 2019).

REDUCING INEQUALITIES AMONG UNEQUALS

AbstractThis article establishes an equivalence between four incomplete rankings of distributions of income among agents who are vertically differentiated with respect to some nonincome characteristic (health, household size, etc.). The first ranking is the possibility of going from one distribution to the other by a finite sequence of income transfers from richer and more highly ranked agents to poorer and less highly ranked ones. The second ranking is the unanimity among utilitarian planners who assume that agents' marginal utility of income is decreasing with respect to both income and the source of vertical differentiation. The third ranking is the Bourguignon (Journal of Econometrics, 42 (1989), 67–80) Ordered Poverty Gap dominance criterion. The fourth ranking is a new dominance criterion based on cumulative lowest incomes.

The Role of Zakat in Reducing the Poverty Gap

Poverty is a crucial problem in Indonesia. Poverty rate in Indonesia is high when compared to other countries in Southeast Asia. We need continuous efforts between government and society, one of them is by maximizing the potential of zakat in Indonesia. This paper aims to analyze the utilization of zakat funds on poverty reduction in Indonesia, especially through program Entrepreneurship Assistance in Desa Berdaya Rumah Zakat. There are 2323 samples taken from the monthly report Entrepreneurship Assistance. The method used is a descriptive method with a quantitative approach that aims to explain and analyze comprehensively the role of zakat in poverty alleviation and indicators. Analysis tools used such as headcount index, poverty gap, income gap, sen poverty index dan FGT index is based on three poverty indicators, namely the poverty line, had kifayah and the nisab of zakat. Distribution of zakat has an impact on increasing the income and business scale of the program recipients, with the result that reducing the depth and severity of poverty in Indonesia

Is Japan\u2019s child allowance effective for the well-being of children? A statistical evaluation using data from K-CHILD study

BackgroundChild allowance payment is one form of social security policy that aims to mitigate the child poverty gap by providing financial support to families. This study aimed to explore the impact of the child allowance on children’s physical and mental health (BMI, problem behavior, depression, and self-rated health), and parental investment in child health (children’s material goods, family events, extracurricular activities, interaction with children, and involvement in child maltreatment).MethodsWe used cross-sectional data from the 2016 Kochi Child Health Impact of Living Difficulty (K-CHILD) study. Participants were 1st, 5th and 8th grade children living in Kochi prefecture in Japan (N = 8207). Caregivers reported children’s child allowance status, BMI and behavior problems, while children filled out a self-assessment on depression and health condition. Propensity score matching analysis regarding potential confounders was used.ResultsWe found that children in families that received child allowance showed a smaller total difficulties score by 1.29 points (95% CI: − 2.32 to − 0.25) and a lower risk of overweight (OR: 0.51, 95% CI: 0.29 to 0.91) although there is no association with underweight, prosocial behavior, depressive symptoms and self-rated health. Parental investment did not differ by child allowance status (p > 0.05).ConclusionsChild allowance was found to be potentially beneficial in decreasing behavior problems and reducing child overweight. Further longitudinal studies are needed to elucidate how child allowance is used by family members and associated with children’s well-being.(230/350 words)

CLR, ‘rebellious lawyering’, and justice education: A few lessons from Bangladesh

Since the mid-1980s, there has been a noticeable movement in legal education, especially in the common law countries, to transform it into justice education. While ‘legal education’ in its traditional connotation refers to teaching and learning of the black letter laws, mainly for litigation purposes, justice education ventures well beyond traditional legal education to incorporate ideas of human dignity, empowerment of the poor and the marginalised including their access to justice to make the education socially relevant. The article argues that, despite having certain common features, justice education, both in content and in procedure, is fundamentally different in the global North and South, more so in countries of South Asia with massive poverty and ever-widening gaps between the rich and the poor. The article discusses a particular component of justice education in Bangladesh, the Community Law Reform Programme, popularly known as CLR, which has been experimented with and practised for almost two decades. The article demonstrates how CLR is different from other socio-legal researches and why it should be considered as an effective way of pursuing justice education for law students. The experience of CLR in Bangladesh since 2001 provides enough evidence to conclude that for justice education to be meaningful in societies like Bangladesh, it has to incorporate CLR in its curriculum. Finally, the article analyses how it has proven to be a challenge to incorporate CLR in the mainstream law school curriculum (even as a clinical component), despite its intricate relation to ‘rebellious lawyering’ as distinct from ‘generic/traditional’ lawyering.

Inflation, Growth, and Distribution Nexus in Post-Transition and Emerging Economies of South Asia

This study investigates the impact of inflation on poverty and income distribution in five major economies in South Asia in the period 1986-2014. Inflation reduces the poverty rate and the poverty gap as the agricultural poor largely benefit from higher agricultural prices whereas the poorest quintile of the population who are landless farmers remain in a disadvantageous position. This raises the overall level of inequality in the economy despite poverty reduction. Trade openness is still not the engine of growth in South Asia - rather it has widened the poverty gap and aggravated inequality because the poor are not well integrated to the global market as compared to the well-off groups. As a result, there has been growing inequality across the region.

Can poverty status explain obesity in developing countries? Evidence from Ghana

AbstractThe relationship between socioeconomic status and obesity remains inconclusive in both developed and developing countries. In Ghana, the rate of reduction in poverty continues to decline as the gap in poverty between urban and rural areas increases. However, the impact of such an economic inequality on body weights has not yet been studied. Using the Ghana Living Standard Survey 2017 (GLSS7) data from the Ghana Statistical Service, I study the link between poverty and body weights in Ghana. The GLSS7 collects detailed information from households, including their socioeconomic characteristics, health, access to financial services, and asset ownership. Due to the endogeneity between poverty status (proxy for income) and obesity, a recursive bivariate probit model is used to estimate the impact of poverty on participants' body weight measured by body mass index. The results suggest a strong negative relationship between poverty and overweight/obesity (p < .00) in the univariate probit model. Marital status, ethnicity, urbanization, and employment types are found to be factors that significantly influence weight status and poverty status. Obesity is also found to be a condition among household heads of higher socioeconomic status in Ghana. [EconLit Citations: C3, D12, D91, I1].

ZAKAT AND POVERTY ALLEVIATION IN INDONESIA: A PANEL ANALYSIS AT PROVINCIAL LEVEL

As a pillar of Islam and an instrument for poverty alleviation, zakat is perceived as aneffective tool for tackling the problem of poverty in the Muslim world. However,whether zakat is effective in improving indicators of both quantity and quality ofpoverty is still a question requiring empirical investigation. This study is aims toempirically investigate the role of impactful zakat in poverty alleviation as indicated bythe BAZNAS prosperity index (Indeks Kesejahteraan BAZNAS or IKB), at provinciallevel in Indonesia. This study covers annual data from 28 provinces in Indonesia forthe years 2017 and 2018. Data analysis uses a panel-data approach, with threeindicators of poverty – the poverty headcount ratio (P0), poverty gap index (P1), andpoverty severity index (P2) – as dependent variables. The study finds that higherBAZNAS IKB, used as a sign of impactful zakat, significantly reduces P0 but hasinsignificant effect on P1 and P2. The results of this study imply that zakat managersshould put emphasis on the poorest section of the poor population to enableimprovements in poverty indicators through zakat utilization.

How Poor Are the Poor? Looking beyond the Binary Measure of Income Poverty

This paper contributes to the literature by analysing how poor the income poor are in European countries. Using data from the European Union Statistics on Income and Living Conditions, I go beyond average estimates of the intensity of poverty and analyse the distribution of individual-level poverty gaps in each country of interest. As a next step, I identify which personal and household characteristics predict how far away incomes of the poor fall from the poverty line. The results indicate that, in most European countries, half of the poor have income shortfalls not exceeding 30% of the poverty line whereas only a few percent of the poor have income deficits of 80% and more. The results also suggest that traditional poverty correlates (e.g. age, gender, educational background) are not always significantly associated with the size of normalised poverty gaps at the individual level, or the nature of these associations differs as compared to when the same characteristics are linked to the probability of being poor.

Poverty Gaps and Gaps in Theory: A Note on “Dynamising” Small Firms

The present note concerns the macro-development perspective underlying new experimental research programme to study poverty. In the perspective, the focus on poverty relates to poverty gaps, an understanding that makes clear poverty is something to do with employment status that remains miles away from state-of-the-art employment status that comes with work technological choices embodied in advanced growth process. This understanding also says that narrowing the gap would add to innovations and growth that adds to profit augmentation—a powerful motive that guides market economies. The present note argues that this focus on solutions to poverty-related employment relates to a policy focus on possible dynamism of small firms and innovation nexus, and if so, there are alternative Keynesian macroeconomic perspective on the processes and innovations that paces advanced growth and how small firms can relate to them.

The Power of Multidimensional Poverty in Explaining Life Expectancy: Empirical Evidence from Cross-Sectional Data of 62 Developing Countries.

Background:We examined whether multidimensional poverty index (MPI) explained variations in life expectancy (LE) better than income poverty; and assessed the relative importance of MPI indicators in influencing LE.Methods:Cross-sectional data from 62 developing countries were used to run several multivariate linear regressions. R2 was used to compare the powers of MPI with income-poverties (income poverty gaps [IPG] at 1.9 and 3.1 USD) in explaining LE.Results:Adjusting for controls, both MPI (β =−0.245, P<0.001) and IPG at 3.1 USD (β=−0.135, P=0.044) significantly correlates with LE, but not IPG at 1.9 USD (β=−0.147, P=0.135). MPI explains 12.1% of the variation in LE compared to only 3.2% explained by IPG at 3.1 USD. The effect of MPI on LE is higher on female (β=−0.210, P<0.001) than male (β=−0.177, P<0.001). The relative influence of the deprivation indictors on LE ranks as follows (most to least): Asset ownership, drinking water, cooking fuel, flooring, child school attendance, years of schooling, nutrition, mortality, improved sanitation, and electricity.Conclusion:Interventions to reduce poverty and improve LE should be guided by MPI, not income poverty indices. Such policies should be female-oriented and prioritized based on the relative influence of the various poverty deprivation indicators on LE.

The roles of social economic status and undernutrition in regional disparities of the under‐five mortality rate in Vietnam

From 2005 to 2017, the prevalence of mortality in Vietnamese children under five years old showed large regional disparities. In 2017, mortality in the wealthiest region was 12.6‰, whereas the most disadvantaged region it was three times as high, at 36‰. This study aims to identify factors affecting regional disparities of the under-five mortality rate (U5MR) in Vietnam. We applied Structural Equation Modelling to estimate the degree and the pathway through which undernutrition and socio-economic status (SES) contributed to the under-five mortality disparities. SES is estimated as a common latent factor of three socio-economic measures, that is, education, poverty and income. The direct effect of SES on U5MR is at 2.16 through the underweight pathway, which is 5 times higher than the effect of underweight on U5MR. Through the stunting channel, this direct impact is 1.43, nearly twice as high as the impact of the stunting rate. SES also has an indirect effect on U5MR through these undernutrition pathways. In total, we estimate that an increase in SES index will make the U5MR increase by 2.73‰. Among the three indicators of SES, poverty conveys the strongest signal of a considerable change in SES, thus to a subsequent change in U5MR. Among two types of undernutrition, the effect of stunting on U5MR is dominant, more than 3 times as high as that of underweight. These findings have important implications for socio-economic and health interventions: those that strongly focus on the reduction of regional poverty and stunting rates would be effective in bridging the regional gap in the U5MR in Vietnam.

The influence of ZIS fund distribution, social aid shopping, and subsidy shopping to poverty in Indonesia

Indonesia has 10 percent of the poor population. Getting rid of that poverty gap, instruments that have been made are needed. One of the instruments is the distribution of ZIS funds by the National Amil Zakat Agency (BAZNAS), then spending aid social services by the central government, and subsidy spending by the central government. Then with this poverty problem, the importance of emphasizing the distribution of ZIS funds in Indonesia, spending on social assistance, spending on subsidies, and research on poverty. This study aims to analyze the effect of ZIS funds distribution, Social Aid Expenditures, and Subsidy Expenditures on poverty in Indonesia in the 2013-2017 period. The sample of this study consisted of 4, namely ZIS data obtained at the National Amil Zakat Agency (BAZNAS), then spending on social aid, expenditure on subsidies, and finally, data on poverty obtained from the Central Statistics Agency (BPS). The method used is a quantitative method by testing the classical assumptions. The results of this study are according to the results of the F test that the three independent variables (ZIS, Social Aid, and Subsidies) simultaneously influence the dependent variable (poverty).

Synergy between adaptations and resilience of livelihood from climate change vulnerability: A group-wise comparison of adapters and non-adapters.

The similarities, differences, and contradictions regarding climate change adaptation and resilience by academics and practitioners have already been documented. It is the need of time to set new precedence by observing the adaptations and resilience as tools to respond to the climate variations. This study analyzed the influence of climate change adaptations and synergy between resilience from livelihood vulnerability and adaptations. A field survey of 489 farming households is conducted with the help of a well-structured questionnaire from four districts of the south part of Punjab province of Pakistan. This study uses the Endogenous Switching Regression model for the sake of analysis. The outcomes of the study reveal that age, education, family size, total land, and seed price have significant linkage with the adoption of adaptations. The synergistic effects of adaptation and resilience are also visible here as the adaptations factors are significantly contributing towards yield, per capita income, poverty, and poverty gap of the respondents. This study suggests the provision of proper education and smart technology to help in enhancing the adaptive capacity of farmers. More imperatively, adaptations to climate variations can be concluded as a remedial tool for resilient livelihood. It is believed that the present study can be considered as a guide for future research on other regions of Pakistan and neighboring countries.

Building neighbourhood-level resilience to crime: the case of Khayelitsha, South Africa

ABSTRACT South Africa is crippled with high rates of crime. Examining factors that may build neighbourhood-level resilience to crime is central to reducing the poverty gap and lowering inequality particularly in impoverished communities. By drawing on theories from environmental criminology in this study we quantify and spatially locate resilient neighbourhoods in the township of Khayelitsha located on the urban periphery of Cape Town in South Africa. We then examine the extent to which access to various built environment factors in the township is stratified based on neighbourhood-level resiliency. Contrary to expectations we found that the most resilient neighbourhoods in Khayelitsha most often experience a decrease in access to a range of built environment factors. Explanations for these findings are provided in the context of a uniquely South African township setting.

The Study on Poverty Reduction Effects of Chinese Urban Minimum Living Standard Guarantee System—Empirical Analysis Based on CHIP 2002 and 2007

The Chinese urban minimum living-standard guarantee system, mainly functions to guarantee the poor people to have minimum living-standard life; at same time it can make some people to get rid of poverty by some poverty lines. But how much of the rates can be reduced? What differences among provinces, and what impact on all kind of families? The paper tries to answer these questions by using Chinese Household Income Project (CHIP) 2002 and 2007, taking international poverty line, minimum living standard line, Martin’s poverty line and relative poverty line respectively to measure the poverty reduction impact of urban minimum living standard guarantee. On the whole, the urban minimum living standard guarantee is effective to alleviate absolute poverty and even part of relative poverty. For example, taking international poverty line as standard, in 2002 the urban minimum living guarantee respectively decreased absolute poverty rate, poverty gap and squared poverty gap of national urban area by 4.58%, 11.41% and 16.32%, while in 2007 decreased respectively by 47.24%, 70.87% and 83.04%. Taking relative poverty line as standard, in 2002 respectively poverty rate, poverty gap and squared poverty gap of national urban area decreased by 1.92%, 4.65% and 8.37%, while in 2007 the 3 indices reached by 3.28%, 11.63% and 22.57% respectively, but which are lower than by international poverty line. On the whole, according to different poverty lines and indices, the urban citizen in different provinces and families gained different poverty reduction effects brought by the urban minimum living standard guarantee.