Evaluating Patterns of Income Growth when Status Matters: A Robust Approach

Abstract

This paper addresses the problem of ranking growth episodes from a microeconomic perspective. While most of the existing criteria, framed in the pro‐poor growth tradition, are either based on anonymous individuals or are used to identify them on the basis of their status in the initial period, this paper proposes new criteria to evaluate growth, which are robust to the choice of the reference period used to identify individuals. Suitable dominance conditions that can be used to rank alternative growth processes are derived by means of an axiomatic approach. Moreover, the theoretical results are used to rank the different growth episodes that have taken place in the past decade in Australia, Germany, Korea, Switzerland, and the U.S.

The Individual Poverty Incidence of Growth

“…These are the income dynamics of the chronically poor and the transition into and out of poverty for those individuals who changed their poverty status. Thus, differently from previous contributions that have focused on the income dynamics of the distribution as a whole, thereby neglecting the individual poverty dynamics, and have considered the economic situation of individuals in the first period as the reference one (see Grimm, 2007; Bourguignon, 2011; Palmisano and Peragine, 2015; Jenkins and Van Kerm, 2016; Creedy and Gemmell, 2018; Palmisano 2018), this is the first paper that provides a normatively grounded measurement framework that focuses on the poverty status evolution of individuals, robustly to the choice of specific functions used to evaluate growth pro‐poorness and to the reference period used to identify individuals.…”

“…3 The Watts index of poverty is the average across the population of poor individuals of the logarithmic distance between the poverty line and the income of each poor individual. 4 See Palmisano (2018).…”

“…individual poverty dynamics, and have considered the economic situation of individuals in the first period as the reference one (see Grimm, 2007;Bourguignon, 2011;Palmisano and Peragine, 2015;Jenkins and Van Kerm, 2016;Creedy and Gemmell, 2018;Palmisano 2018), this is the first paper that provides a normatively grounded measurement framework that focuses on the poverty status evolution of individuals, robustly to the choice of specific functions used to evaluate growth pro-poorness and to the reference period used to identify individuals. Interestingly, our dominance conditions can be interpreted in some cases as a censored version of the na-GIC framework dominance, and in some others as 'pro-poor growth curves'.…”

Dynastic measures of inter-generational mobility with empirical evidence from Indonesia

“…This literature, focusing again mainly on intra-generational mobility interpretations and applications, assumes that individual-level mobilities are represented by concepts of 'distance' between first-and second-period incomes (Fields et al 2002;Jenkins and Van Kerm 2016;Van Kerm 2009). It has been extensively used to characterize where income growth has benefited specific segments of the population, notably the poor, using non-anonymous growth incidence curves (Berman and Bourguignon, 2021;Bourguignon 2011;Grimm 2007;Jenkins and Van Kerm 2016;Lo Bue and Palmisano 2020;Palmisano 2018;Van Kerm 2009). Our approach is closely related to this literature but adapted to the inter-generational perspective.…”

Austerity and inequality in Ireland

“…We identify the separate impacts of discretionary changes in policies and the "automatic stabilisation" element whereby policy impacts change as unemployment and incomes change, developing and applying a new approach to allow these to be distinguished. Finally, we also complement the traditional "cross-sectional" perspective on changes in the distribution of income with panel-based analysis, building on the approach developed over the past decade by Jenkins and Van Kerm (2006), Grimm (2007), Fields (2010, Bourguignon (2011), Palmisano and Peragine (2015), Jenkins and Van Kerm (2016) and Palmisano (2016). Observed cross-sectional changes in incomes across various quantiles of the income distribution are the net result of income changes for individuals who began in a given quantile of the income distribution and income changes for individuals that moved into that quantile during the period of interest.…”