Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach

Azevedo, Joao Pedro ; Inchauste, Gabriela ; Olivieri, Sergio ; Saavedra, Jaime ; Winkler, Hernan

World Bank, Washington, DC

关键词: CASH TRANSFER PROGRAMS;    CASH TRANSFERS;    CHANGES IN POVERTY;    CONSUMPTION AGGREGATE;    CONSUMPTION EXPENDITURES;   

DOI  :  10.1596/1813-9450-6414
RP-ID  :  WPS6414

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Demographics, labor income, publictransfers, or remittances: Which factor contributes the mostto observed reductions in poverty? Using counterfactualsimulations, this paper accounts for the contribution laborincome has made to the observed changes in poverty over thepast decade for a set of 16 countries that have experiencedsubstantial declines in poverty. In contrast to methods thatfocus on aggregate summary statistics, the analysisgenerates entire counterfactual distributions that allowassessing the contributions of different factors to observeddistributional changes. Decompositions across all possiblepaths are calculated so the estimates are not subject topath-dependence. The analysis shows that for most countriesin the sample, labor income is the most importantcontributor to changes in poverty. In ten of the countries,labor income explains more than half of the change inmoderate poverty; in another four, it accounts for more than40 percent of the reduction in poverty. Although public andprivate transfers were relatively more important inexplaining the reduction in extreme poverty, more andbetter-paying jobs were the key factors behind povertyreduction over the past decade.