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Comparisons of poverty rates are only rarely based on identical underlying definitions of welfare. The authors examine the sensitivity of poverty rates calculated from alternative definitions of consumption. They consider what theory can say about the direction of bias in comparisons and show that under certain conditions robust comparisons are possible. Data from Ecuador, El Salvador, and Pakistan show that the magnitude of biases can be substantial. Their robustness result is used as a baseline to explore the tradeoffs involved in aggregating noisy expenditure components. Although nonfood expenditures are often thought to be especially poorly measured, the authors' data indicate that the more comprehensive is the measure of consumption spending, the better it is as a measure of welfare.

Much attention has been paid to the relative vulnerability of two well-defined household groups during the transition. Some observers argue that old-age pensioner households have been relatively protected because of a less steep decline in real pensions compared with wages in most transition economies. By contrast, households with young children are believed to have experienced a substantial decline in living standards under reform and show strikingly higher rates of measured poverty than pensioner households. But others argue that the elderly have suffered more than the young during the transition. Can these conflicting viewpoints about the relatively poverty of old and young households be arbitrated? The authors show that strong (though implicit) assumptions underpin certain poverty comparisons. Notably, using a per capita measure of individual welfare assume that there are no economies of scale in household consumption, in the sense that the per capita cost of reaching a specific level of welfare does not fall as household size increases. Relaxing that assumption could affect comparisons, showing higher poverty rates among the elderly because their households tend to be smaller than the households containing children. Even the nature of the transition has implications for economies of scale. The relative cost of housing and other goods and services with at least some public-good characteristics has risen rapidly. These relative price shifts hit small households particularly hard, because a greater share of their expenditures goes to public and quasi-public goods. But transition economies have also experienced big increases in the relative prices of goods and services consumed largely by children, such as kindergarten and other education services. These increases affect younger households more. Since there is no accepted way to establish the true extent of economies of scale in a given country, the question can't be answered exactly. But clearly a small departure from a per capita measure may be enough in some cases to overturn the conventional relative ranking of poverty headcounts: poverty among the elderly may then turn out to be worse than among children.

The authors discuss when and how to adjust expenditures derived from household surveys to reflect the consumption of basic services. They discuss simple adjustment methods for markets that are subsidized, rationed, or subject to increasing marginal tariff pricing. Using Ecuador as an example, they show how incorporating adjustments in markets for water, electricity, and cooking gas can significantly alter estimates of poverty and are therefore important to comprehensive measure of welfare. For Ecuador, adjustments must be made for water, for example, because the nonpoor urban population often has access to subsidized public water and the poor depend on the private market; adjustments must be made for electricity because increasing marginal tariff rates lead to different prices per kilowatt-hour (kwh). Adjustments need not be made for cooking gas, which is highly subsidized in Ecuador, because the amount consumers use is not rationed. The authors compare the sensitivity of poverty indicators and the poverty profile in Ecuador to adjustments in nominal expenditures for basic services in Ecuador. The poverty indicators (headcount and the poverty gap for extreme poverty) showed changes that were statistically significant. The results dramatize how important it is to carefully analyze markets for basic services when deriving welfare measures from household surveys. Such adjustments, by improving the measure of welfare, can also encourage wider acceptance and use of consumption as welfare indicator and a guide for developing public policy.

This book provides an account of economic development in Palanpur, a village in rural north India, based on five detailed surveys of the village over the period 1957 to 1993. These five decades have seen economic well being rise in some important respects, but stagnation and even decline in other areas. The analysis presented here focuses on the reasons behind this uneven progress. The chapters in the book tie in the background issues of the evolution of poverty and inequality and mobility over time with causal factors such as technological progress, demographic and sectoral changes, the operation of markets, and the role of public action. Quantitative and qualitative data covering the entire population of the village yield an analysis, which illuminates questions of direct importance to researchers in a wide variety of disciplines from anthropology to sociology as well as economics and all kinds of development studies. The volume extends and updates the work done by Christopher Bliss and Nicholas Stern in Palanpur: The Economy of an Indian Village (OUP).

Survey-based estimates of average program participation conditional on income are often used in assessing the distributional impacts of public spending reforms. But program participation could well be nonhomogeneous, so that marginal impacts of program expansion or contraction differ greatly from average impacts. Using the geographic variation found in sample survey data for rural India for 1993-94, the authors estimate the marginal odds of participating in schooling and antipoverty programs. Their results suggest early capture of these programs by the nonpoor. Thus, conventional methods of assessing benefit incidence underestimate the gains to India's rural poor from higher public outlays, and their loss from program cuts.

Poverty maps, providing information on the spatial distribution of living standards, are an important tool for policy making and economic research. Policymakers can use such maps to allocate transfers and inform policy design. The maps can also be used to investigate the relationship between growth and distribution inside a country, thereby complementing research using cross-county regressions. The development of detailed poverty maps is difficult because of data constraints. Household surveys contain data on income or consumption but are typically small. Census data cover a large sample but do not generally contain the right information. Poverty maps based on census data but constructed in an ad-hoc manner can be unreliable. The authors demonstrate how sample survey data and census data can be combined to yield predicted poverty rates for all households covered by the census. This represents an improvement over ad hoc poverty maps. However, standard errors on the estimated poverty rates are not negligible, so additional efforts to cross-check results are warranted.

The author analyzes a recent household survey for Ecuador to assess the role of the nonagricultural rural sector in reducing poverty. That sector accounts for roughly 40 percent of rural incomes in Ecuador, three-fourths of which comes from nonagricultural enterprises as opposed to wage labor. The sector provides employment to nearly 40 percent of men and 50 percent of economically active women. The nonagricultural rural sector represents a potentially important route out of poverty: Poverty declines as the share of income from nonagricultural sources arises. Nonagricultural employment and earnings are positively associated with higher education levels and better access to infrastructure services. Although women are more likely than men to be employed in this sector, their earnings for given education levels and other household characteristics are significantly lower. All other things equal, the greatest fall in poverty could be expected from expanding employment opportunities in transport, commerce-related activities, and such services as administration and the hotel and restaurant trade.

This paper presents a case study of credit transactions in Palanpur, a north Indian village. Drawing on detailed informtion from all borrowers and lenders in the village, we examine a number of issues related to the functioning of rural credit markets. These include the segmentation of the credit market, the achievements and failure of public lending institutions, the role of interest-free lending, the lending strategies of village moneylenders, social inequalities in access to credit, and the politics of rural credit, among others. An attempt is also made to relate these findings to those of other studies of credit in rural India.

Comparisons of poverty rates are only rarely based on identical underlying definitions of welfare. The authors examine the sensitivity of poverty rates calculated from alternative definitions of consumption. They consider what theory can say about the direction of bias in comparisons and show that under certain conditions robust comparisons are possible. Data from Ecuador, El Salvador, and Pakistan show that the magnitude of biases can be substantial. Their robustness result is used as a baseline to explore the tradeoffs involved in aggregating noisy expenditure components. Although nonfood expenditures are often thought to be especially poorly measured, the authors'data indicate that the more comprehensive is the measure of consumption spending, the better it is as a measure of welfare.

So little is known about the rural nonfarm sector that those making policy to assist rural small-scale enterprises have done so largely"unencumbered by evidence". The Lanjouw survey of nonfarm data and policy experience attempts to correct this. Until recently, the commonly held view was that rural nonfarm employment was relatively nonproductive, producing goods and services of low quality. The rural off-farm sector was expected to wither away with development and rising incomes, and this was viewed as a positive, rather than a negative, event. A corrollary of this view was that the government need not actively worry about the sector -- or be concerned about how policies elsewhere might harm it. More recently, opinion has swung the other way, and it is increasingly argued that neglect of the sector would be mistaken. The survey highlights the positive roles that the rural nonfarm sector can play in promoting both growth and welfare. In the widespread situation of a rural workforce growing faster than the employment potential in agriculture, the nonfarm rural sector can lower unemployment and slow rural-urban migration. It is particularly useful in employing women and providing off-season incomes. The technologies used in small-scale rural manufacturing may be more appropriate and thus generate greater income from available productive inputs. What role could government play in promoting the nonfarm sector? The emphasis of government policy has been on large-scale urban industry as the main engine of growth. More recently, there has been a move toward a more"broad-based growth"approach, with greater emphasis on the development of agriculture and the rural economy. Increasingly countries have targeted project assistance schemes, for example to provide training, infrastructure, and technology to support small-scale and rural enterprises. Nonetheless, in most countries it remains true that projects to support the nonfarm rural sector are undertaken in a policy environment which is biased against this sector.

En Ecuador, el estudio de pobreza, en sus numerosas dimensiones, tiene una rica tradición. Este estudio ha producido un razonable cuerpo de conocimientos sobre el standard de vida de los pobres, términos no solo del ingreso, sino también del acceso a los servicios básicos, niveles de educación, situación nutricional y salud...

En la mayor parte de la evaluación de la pobreza, se mide el bienestar de los individuos a través del consumo total y no del ingreso por muchas razones. Primero, el consumo de una persona tiende a variar mucho menos que el ingreso en un mes e inclusive un año. El ingreso de una persona pobre es bastante volatil: en los centros urbanos, el pobre frecuentemente depende de trabajos a destajo en el sector informal...

The widely held view that larger families tend to be poorer in developing countries has influenced research and policies. But the basis for this"stylized fact"is questionable, the authors argue. Widely cited evidence of a strong negative correlation between size and consumption per person is unconvincing, given that even poor households face economies of size in consumption. The authors find that the correlation between poverty and household size vanishes in Pakistan when the size elasticity of the cost of living is about 0.6. This turns out to be the elasticity implied by a modified version of the food-share method of setting scales. By contrast, some measures of child nutritional status indicate an elasticity closer to unity. Consideration of the weight attached to child versus adult welfare may help resolve the nonrobustness of demographic profiles of poverty. The authors show that the incidence of severe child stunting is more elastic to household size than their Engel curve estimate suggests, although the latter is still a fair predictor of child wasting. A consideration of the purpose of measuring poverty - notably the extent to which it is used to inform policies aimed at promoting child welfare - may go some way toward resolving the issues.

This thesis aims to analyze how the stratified nature of a society translates into horizontal inequalities in the labor market. We analyze the case of urban India, where disparities among gender, religion and caste groups persist despite the country’s significant structural change. The first chapter analyzes the links between labor market exclusion and group disadvantage. After estimating the likelihood of non-participation in the labor market, we address the specific case of secluded labor by detecting its impact on children’s education. We suggest that female labor market participation is not likely to lower the educational gap for future generations. The second chapter compares the paths of labor market mobility between 2005 and 2011-12 among gender and socio-religious groups. A detailed analysis of occupational and earnings mobility, followed by the estimation of their determinants, suggest that the group-specific mobility patterns may not reflect a process of “catching-up.” The third chapter proposes an analysis of labor market segmentation in the context of a predominantly informal labor market, showing that the household business sector is relatively homogenous and that the salaried sector is segmented along gender lines. A fourth chapter highlights the issue of potential discrimination by comparing parametric and semi-parametric wage gap decompositions, both suggesting that wage gaps are mostly due to selection and segregation effects in the case of gender. In the case of socio-religious groups, a combination of endowment differentials, nepotism and potential discrimination leads to substantial wage differentials., Cette thèse propose de détecter les mécanismes par lesquels la stratification d’une société se reflète sur le marché du travail. Nous étudions pour cela le cas de l’Inde, où les disparités liées au genre, à la religion et à la caste persistent malgré des changements structurels considérables. Un premier chapitre traite des liens entre l’exclusion du marché du travail et les disparités inter-groupes. Suite à une estimation de la probabilité de non-participation sur le marché du travail, l’analyse des conséquences de l’isolement forcé des femmes sur l’éducation des enfants permet d’observer dans quelle mesure le travail est un vecteur de réduction des inégalités genrées d’éducation. Un second chapitre s’intéresse aux trajectoires de mobilités occupationnelles et de revenu entre 2005 et 2011-12. Une description détaillée de ces trajectoires et l’estimation de ces déterminants suggèrent l’absence d’un phénomène de rattrapage des groupes désavantagés sur le moyen-terme. Un troisième chapitre aborde la question de la segmentation du marché du travail dans un contexte de prédominance de l’économie informelle. Les résultats montrent l’existence d’une ségrégation occupationnelle en fonction du genre. Le quatrième chapitre propose une comparaison paramétrique et nonparamétrique des décompositions de salaire. Les écarts de salaires ne sont pas liés à une discrimination salariale pure mais plutôt à un processus de sélection et de ségrégation occupationnelle dans le cas du genre. En ce qui concerne les groupes socio-religieux, la combinaison des écarts en termes d’éducation, de népotisme et de discrimination potentielle explique les fortes disparités salariales.

It was a part of the wisdom of mainstream economics that in the early stages of development inequality would rise but as growth persisted, it would, eventually, decline. Early evidence seemed to suggest that this pattern would be borne out. But, as time passed and growth persisted, inequality continued to grow, casting doubt on the received wisdom. The aim of this two-volume book is to analyze the current state of global and regional inequality, dissect the phenomenal increase in inequality that we have seen occur in recent times, and better understand the complex relationship between inequality and development. The political instability and conflict that we see around the world, arguably, has connection to economic deprivation of large segments of society and the perception of marginalization. This two-volume work acquires a special significance in the light of these developments.