Growth Pro-Poorness from an Intertemporal Perspective with an Application to Indonesia, 1997–2007
Studies that have traditionally focused on the impact of growth on poverty would be more comprehensive if they also considered income dynamics and the impact of growth on mobility.
The impact of growth on the distribution of income or consumption is regularly debated at both the scientific and policy levels. Within the micro-oriented literature dedicated to growth pro-poorness evaluation issues, the focus is specifically on the poverty impacts of growth. Considering a cross-sectional perspective for poverty measurement, early contributions have logically assessed these distributional effects in an anonymous fashion. But this means ignoring both the income dynamics and mobility impacts of growth. We extend the growth pro-poorness framework in two important ways. First, we adopt a longitudinal perspective, which accounts independently for anonymous and mobility growth effects. Second, our treatment of mobility encompasses both the gain of “mobility as equalizer” and the variability cost of poverty transiency. We introduce several decompositions to evaluate the relative contribution of each of these effects on the pro-poorness of distributional changes. An empirical illustration is performed using Indonesian data for 1997–2007.
WORKING PAPER NO: 773