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Social Indicators Research

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27.10.2020 | Original Research

The Poverty-Growth-Inequality Triangle: Asia 1960s to 2010s

verfasst von: Guanghua Wan, Chen Wang, Xun Zhang

Erschienen in: Social Indicators Research | Ausgabe 3/2021

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Abstract

The main objective of this paper is to disentangle the poverty-growth-inequality triangle for Asia, its sub-regions and individual economies by constructing poverty and inequality profiles, decomposing poverty changes and modelling inequality. Due to a shortage of unit record data, analytical techniques are developed for estimating the poverty headcount ratio and regional inequality with minimum data requirements. Analytical results confirm significant reductions in poverty across the board due to fast growth, although the benign effect of growth on poverty was offset by worsening distributions in many economies. Furthermore, the poverty-reducing effect of growth has been diminishing over time and converging to 0 for many countries. Also, the cost of rising inequality in Asia was found to be surprisingly large in terms of missed poverty reduction. Looking ahead, Asia is expected to eradicate abject poverty soon but likely to continue facing high inequality, particularly income gaps between economies.

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Asia is defined differently by different institutions. This study follows the definition of the United Nations (see https://unstats.un.org/unsd/methodology/m49/).

This is the extreme poverty line developed by the World Bank, measured in international dollars adjusted by the 2011 purchasing power parities (PPP). Since some economies in Asia joined the high income group in the 1960s and 1970s, a higher or moderate poverty line of $3.20 will also be used in this paper.

Sen (1973) defines social welfare as a function of the average living standard (e.g., income or consumption) and its Gini coefficient.

One referee recommended the use of unit record data. However, most of them are not accessible. The well-known Luxemburg Income Survey Database only holds 23 sets of unit record data for Asian economies (10 for Taiwan alone) in all years. This is far from sufficient for our analyses.

Theil-T will not be used in this paper since it is not easy to convert the Gini coefficient into the Theil-T index. See Shorrocks and Wan (2005) for other advantages of Theil-L over Theil-T.

Results not reported but available from the corresponding author upon request.

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Titel: The Poverty-Growth-Inequality Triangle: Asia 1960s to 2010s
verfasst von: Guanghua Wan
Chen Wang
Xun Zhang
Publikationsdatum: 27.10.2020
Verlag: Springer Netherlands
Erschienen in: Social Indicators Research / Ausgabe 3/2021
Print ISSN: 0303-8300
Elektronische ISSN: 1573-0921
DOI: https://doi.org/10.1007/s11205-020-02521-6

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