Non-anonymous growth incidence curves, income mobility and social welfare dominance

Abstract

The distributional incidence of growth is generally analyzed by comparing the quantiles of the pre-and post-growth income distribution-e.g. the so-called Growth Incidence Curves. Such an approach based on an implicit re-ranking of individual incomes ignores income mobility by assuming that only post-growth income matters in social welfare. By contrast, this paper takes the view that "status quo matters" and that social welfare should logically be defined on both inital and terminal income. This leads to consider 'non-anonymous' Growth Incidence Curves that plot income growth rates against the various quantiles of the initial distribution. Dominance criteria that generalize those available for standard growth incidence curves are derived, which account for the inequality of individual income changes, conditional on initial income. An application to the cross-country distributional feature of global growth illustrates the analysis.

Space–Time Patterns of Rank Concordance: Local Indicators of Mobility Association with Application to Spatial Income Inequality Dynamics

“…From a policy evaluation perspective there has been a resurgence of interest in new methods to examine the impacts of "trickle-down" economic policies on inequality and mobility (e.g. Bourguignon, 2011), and the LIMA's offer a spatial lens on these distributional questions. More broadly, the development of spatially explicit theories of economic growth that relies on the LIMA statistics to identify leading and lagging regions (LeSage and Reed, 1990), the role of labor migration and changes in industrial composition (Crescenzi et al, 2012), and to address the question of whether regional economic growth is competitive or cooperative between neighboring regions (Chung and Hewings, 2015) are just a selection among the numerous future avenues for confirmatory work that the new measures can afford.…”

Measuring Pro-Poor Growth: Analysis of Indicators and their Comparison Applied to Bangladesh

“…Are (2012) aplikoval stejnou metodu na Irsko, kde byl růst v období let 1987-1994 doprovázen mírně se snižující nerovností, zatímco v letech 1994-1999 růst doprovázela zvyšující se nerovnost. Bourguignon (2010) původní GIC upravil a vytvořil tzv. "neanonymní" GIC, která postihuje příjmovou mobilitu tím, že zohledňuje původní a konečný příjem konkrétních domácností.…”

Intertemporal pro-poorness

“…Because of this, recent contributions have argued that pro-poor and welfare judgments of the effect of growth should be based on a 'non-anonymous' perspective (see notably Grimm, 2007, Jenkins and Van Kerm, 2011, Bourguignon, 2011, Palmisano and Van de gaer, 2013, Palmisano and Peragine, 2014. Proponents of this emphasize the role played by mobility in the distributional effects of growth.…”