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Decomposing the changes in poverty: Poverty line and distributional effects
[journal article]
Abstract When measuring poverty in developed countries, the poverty line used to identify the poor is usually relative and set as a percentage of the median (or of the mean) of the total income. In consequence, when poverty is analyzed over a period of time, changes in the poverty level depend on the impact ... view more
When measuring poverty in developed countries, the poverty line used to identify the poor is usually relative and set as a percentage of the median (or of the mean) of the total income. In consequence, when poverty is analyzed over a period of time, changes in the poverty level depend on the impact of evolving standards. To eliminate this effect, sometimes, an anchored poverty line is used. Furthermore, changes in the mean of the distribution and in the inequality among the poor may also affect the poverty levels. This note proposes a decomposition of the changes in poverty as the sum of four terms. The first two reflect the impact in poverty of changes in living standards and the other two measure the effect of the distributional growth and redistribution. This decomposition will help policymakers in the implementation of a more specific antipoverty agenda. An application with data from the European Union Survey on Income and Living Conditions shows the potential of the decomposition proposed.... view less
Keywords
poverty; industrial nation; income distribution; income situation; standard of living; combating poverty; growth; redistribution; inequality; social inequality; Europe; EU; international comparison
Classification
General Sociology, Basic Research, General Concepts and History of Sociology, Sociological Theories
Sociology of Economics
Free Keywords
changes in poverty; growth-equity decomposition; identificationof the poor; relative poverty lines; shapley decomposition; EU-SILC 2007; EU-SILC 2016
Document language
English
Publication Year
2023
Page/Pages
p. 1048-1063
Journal
Bulletin of Economic Research, 75 (2023) 4
DOI
https://doi.org/10.1111/boer.12394
ISSN
0307-3378
Status
Published Version; peer reviewed
Licence
Creative Commons - Attribution-Noncommercial-No Derivative Works 4.0