Armenia has accumulated continuous reductions in poverty since 2010, recovering the levels observed before the 2008 global economic crisis. The reduction of poverty since 2010 reflects the growth of the manufacturing and service sector in urban areas and modest growth in agricultural output in rural areas.
... See More + The period between 2012 and 2017 showed slower consumption growth among the bottom 40 percent of the distribution compared to the total population (1.8 percent versus 3.2 percent), which has led to an increase of inequality in the country. Households in the bottom of the distribution are more likely to report skill deficits, and if they manage to escape unemployment, they work in lower productivity jobs.
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The people of the South Caucasus aspire for their countries to become strong middle-class societies, and they are on track to make that aspiration a reality.
... See More + Two decades of social and economic progress have changed the societies of Armenia, Azerbaijan, and Georgia. The notable improvements that people in the region have experienced are reflected in better living standards that allowed poverty to be reduced by half in the 12 years between 2005 and 2017. Yet, to consolidate middle-class societies, the governments of the South Caucasus need to do more to achieve the stability and resilience enjoyed by their more advanced peers in Europe and Central Asia. Sustainable economic growth, poverty reduction, and shared prosperity require that the full potential of all geographical and administrative areas, population groups, and economic sectors be realized. This boo analyzes spatial, social, and economic mobility in the South Caucasus. The book argues that Armenia, Azerbaijan, and Georgia have not yet integrated important geographical areas and population segments in full economic participation and social development. Economic gains have not been uniformly and equitably translated into greater welfare and opportunity among all households and individuals. The main conclusion is that sustainable growth, poverty reduction, and the consolidation of the middle class require that the institutional and physical foundations of greater and more equitable economic and social mobility be secured in the South Caucasus. Understanding and removing the constraints to the development of lagging districts; leveraging opportunities for agglomeration; linking geographical areas, peoples, and markets; fostering equality in access to better jobs; and making sure that high-quality education and basic services are available to all individuals and areas are crucial.
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The November newsletter focuses on intergenerational mobility. With the launch of the Global Database on Intergenerational Mobility, covering 148 economies, confirms the depth of the problem.
... See More + The rest of the newsletter highlights research on the challenges of measuring mobility in settings where data is often incomplete and hard to come by. Additional research looks at the complex interplay between growth and inequality.
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The World Bank Global Knowledge and Research Hub in Malaysia partnered with the United Nations Development Program (UNDP) for an End Poverty Campaign event on November 8, 2016.
... See More + Around 100 policy makers, development practitioners, civil society organizations and members of the media attended the half-day session, which addressed poverty, shared prosperity, and inequality issues at the global and community levels. This was the first joint World Bank-UNDP event in Malaysia and represents a first step toward future collaboration. The main part of the event consisted of two panel sessions, one highlighting grassroots civil society organizations working to reduce poverty in Malaysia and the other featuring public policy makers. These sessions sparked a lively exchange of ideas, drawing from respective best practices and challenges in translating research into policy and policy into results on the ground.
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This paper implements a machine learning approach to estimate intra-generational economic mobility using cross-sectional data. A Least Absolute Shrinkage and Selection Operator (Lasso) procedure is applied to explore poverty dynamics and household-level welfare growth in the absence of panel data sets that follow individuals over time.
... See More + The method is validated by sampling repeated cross-sections of actual panel data from Peru. In general, the approach performs well at estimating intra-generational poverty transitions; most of the mobility estimates fall within the 95 percent confidence intervals of poverty mobility from the actual panel data. The validation also confirms that the Lasso regularization procedure performs well at estimating household-level welfare growth between two years. Overall, the results are sufficiently encouraging to estimate economic mobility in settings where panel data are not available or, if they are, to improve panel data when they suffer from serious non-random attrition problems.
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Policy Research Working Paper WPS8545 AUG 08, 2018
This paper proposes a model-based approach to estimate income boundaries for identifying the middle class in Kazakhstan over 2003–15. The approach exploits the subjective evaluation of Kazakhstan households about their social status, relating self-declared social class membership to income.
... See More + Income data come from the Kazakhstan Household Budget Survey, which also includes a specific module on quality of life and perceived social status. As social status is intrinsically an ordinal response, the paper estimates a proportional odds model with income as the key explanatory variable. Although other factors influence the self-perception of being in the middle class, income is by far the most important determinant. Benchmarking on 2013, the estimated middle class lower bound is $14 at 2011 purchasing power parity and the upper bound is $52. The Kazakhstan middle class has increased massively in size and income concentration. The increase is essentially due to a growth effect rather than a redistributive cause.
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Working Paper (Numbered Series) 129806 AUG 01, 2018
This paper implements a machine learning approach to estimate intra-generational economic mobility using cross-sectional data. A Least Absolute Shrinkage and Selection Operator (Lasso) procedure is applied to explore poverty dynamics and household-level welfare growth in the absence of panel data sets that follow individuals over time.
... See More + The method is validated by sampling repeated cross-sections of actual panel data from Peru. In general, the approach performs well at estimating intra-generational poverty transitions; most of the mobility estimates fall within the 95 percent confidence intervals of poverty mobility from the actual panel data. The validation also confirms that the Lasso regularization procedure performs well at estimating household-level welfare growth between two years. Overall, the results are sufficiently encouraging to estimate economic mobility in settings where panel data are not available or, if they are, to improve panel data when they suffer from serious non-random attrition problems.
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Working Paper (Numbered Series) 129600 AUG 01, 2018
Misreporting is a well-known challenge for researchers in social sciences. This issue is especially prevalent if incentives for misreporting exist, for example, to claim certain benefits or hide illegal behavior.
... See More + Internally displaced persons are a population that is highly dependent on aid receipts and, thus, have strong incentives to underreport consumption levels. To improve reporting for such vulnerable populations, this paper proposes to integrate “honesty primes” into the consumption module of the questionnaire. Honesty primes are unconscious stimuli that induce a certain cognition or behavior. The study assesses the effectiveness of a bundle of randomly assigned primes within a sample of internally displaced persons in South Sudan. In line with the main hypothesis, positive and significant effects arise for low consumption quantiles, especially consumption quantities that are more susceptible to manipulation. Hence, honesty primes can act as a cost-effective tool to induce more accurate reporting. Further research is needed to identify more effective primes for the respective population of interest.
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Working Paper (Numbered Series) 129598 AUG 01, 2018
Poverty reduction in the Latin America (LA) region remained stagnant in 2016 as the economic contraction deepened, while the middle class has slightly declined.
... See More + Poverty rates were once again effectively unchanged for half the countries. Income growth of the bottom 40 percent of the Latin American income distribution was negative in both 2015 and 2016, driven by Brazil, but overall inequality decreased due to larger income declines among wealthier households. Preliminary data are ambiguous over the likely poverty outcomes in 2017. Non-labor income will need to play an important role given the low labor income increases seen in preliminary labor market data.
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Fair Progress? Economic Mobility across Generations around the World looks at an issue that has gotten much attention in the developed world, but with, for the first time, new data and analysis covering most of the world, including developing economies.
... See More + The analysis examines whether those born in poverty or in prosperity are destined to remain in the same economic circumstances into which they were born and looks back over a half a century at whether children’s lives are better or worse than their parents’ in different parts of the world. It suggests local, national, and global actions and policies that can help break the cycle of poverty, paving the way for the next generation to realize their potential and improve their lives.
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Publication 126847 MAY 30, 2018
Narayan,Ambar; Van Der Weide,Roy; Cojocaru,Alexandru; Lakner,Christoph; Redaelli,Silvia; Mahler,Daniel Gerszon; Nichanametla Ramasubbaiah,Rakesh Gupta; Thewissen,Stefan HubertDisclosed
This study explores the short-run transitions between poverty, vulnerability, and middle class, using synthetic panels constructed from multiple rounds of Colombia's Integrated Household Survey (in Spanish Gran Encuesta Integrada de Hogares).
... See More + The paper reports results from two approaches to define a vulnerability line: the first one employs a nonparametric and parsimonious model, while the second utilizes a fully parametric regression model with covariates. The estimation results suggest a range of between $8 to $13 per day per person in 2005 purchasing power parity dollars as the vulnerability line. Using an average daily vulnerability line of $10 per day per person, subsequent estimates on welfare dynamics suggest that, during the past decade, 20 percent of the Colombian population experienced downward mobility, and 24 percent experienced upward mobility. Furthermore, upward mobility increases with higher education levels and is lower for female-headed households.
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Policy Research Working Paper WPS8441 MAY 14, 2018
In fragile states and areas beset by insecurity and conflict, the time available for a face-to-face interview is typically limited. That prevents administering the lengthy household consumption expenditure surveys used for measuring poverty.
... See More + This paper presents a new approach to obtain unbiased estimates of poverty when the time to conduct interviews is a binding constraint. The finite list of consumption recall items is partitioned selectively into a core module and algorithmically into non overlapping optional modules. Each household is systematically assigned the core module and randomly assigned one of the optional modules. Multiple imputation techniques are then used to estimate total household consumption. Based on ex post simulations, the approach is demonstrated to yield reliable estimates of per capita consumption and poverty using data from a regular household budget survey collected in Hargeisa, Somaliland. The approach is then applied to a survey conducted in Mogadishu where interview time could not exceed 60 minutes.
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Working Paper (Numbered Series) 129590 MAY 01, 2018
This study explores the short-run transitions between poverty, vulnerability, and middle class, using synthetic panels constructed from multiple rounds of Colombia’s integrated household survey (in Spanish gran encuesta integrada de hogares).
... See More + The paper reports results from two approaches to define a vulnerability line: the first one employs a nonparametric and parsimonious model, while the second utilizes a fully parametric regression model with covariates. The estimation results suggest a range of between 8 dollars to 13 dollars per day per person in 2005 purchasing power parity dollars as the vulnerability line. Using an average daily vulnerability line of 10 dollars per day per person, subsequent estimates on welfare dynamics suggest that, during the past decade, 20 percent of the Colombian population experienced downward mobility, and 24 percent experienced upward mobility. Furthermore, upward mobility increases with higher education levels and is lower for female-headed households.
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Working Paper (Numbered Series) 129584 MAY 01, 2018
There is an increasingly stronger demand for more frequent and accurate poverty estimates, despite the oftentimes unavailable household consumption data.
... See More + This paper offers a review of alternative imputation methods that have been employed to provide poverty estimates in such contexts. These range from estimates on a nonmonetary basis, estimates for specific project targeting or tracking trends at the national level, to estimates at a more disaggregated level, as well as estimates of poverty dynamics. The paper provides a concise and accessible synthesis, which serves as an introduction to the literature. The focus is on intuition and practical insights that highlight the nuanced differences between the existing methods rather than technical aspects.
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Policy Research Working Paper WPS8403 APR 11, 2018
This paper presents a comprehensive analysis of economic and social mobility in countries in the South Caucasus by complementing available household survey data in each of the countries in the subregion with other sources, such as the Life in Transition Survey (2016).
... See More + The first part of the paper -- concentrated on intragenerational mobility -- finds that despite progress made in reducing poverty over the past decade, there appears to be a significant amount of churning around the poverty line. Moreover, in Georgia and Armenia, roughly one in eight individuals lived in a state of chronic poverty in 2015, and in the case of Georgia, chronic poverty is not an exclusive phenomenon for rural areas. In addition, although social programs have provided a lifeline for the chronic poor, the ability to tap into labor market opportunities has been the ticket out of poverty. The second part of the paper expands the analysis to intergenerational or social mobility. The main findings are that (1) a higher proportion of the population in this subregion considers their pre-transition family life and the lives of their parents when they were of similar age as appropriate benchmarks to evaluate their current economic situations in comparison with the other transition countries, and (2) over half of the Georgian and Armenian population disagreed with the statement that asked their views on having a better in life than their parents, aligning with the “growing but unhappy” trend that has been reported for the region.
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Policy Research Working Paper WPS8329 FEB 05, 2018
Given existing physical and human capital assets, Brazil could almost triple its income per capita if it managed to achieve the United States efficiency level.
... See More + Cross-country evidence confirms that upgrading productivity instead of accumulating more physical capital and increasing the size of the workforce is the main driver of income differences across countries and of sustainable per capita income growth. Cross-country evidence supports the inclusive benefits of productivity growth. Within-country evidence for Brazil and other emerging economies also supports the inclusive benefits of policies that foster productivity growth. New evidence from Brazil indicates that tariff liberalization benefited households across the income distribution and was largely pro-poor, with net welfare gains. Further trade opening should benefit all households and remain inclusive, offering opportunities for financing redistributive policies. One of the main learnings from Brazil’s experience is that insufficient geographical labor mobility has impeded the reallocation process triggered by productivity policies, distributing unevenly the costs and benefits of productivity growth across regions. An additional important lesson learned from Brazil experience is that a strong output expansion from productivity upgrading, especially for less-skilled intensive industries, is essential for policies to result in more and better paid jobs for less well-off people. Finally, the administration of current passive labor market and social programs could be enhanced to ensure that income support is provided to less well-off individuals unable to adjust to the new market conditions and directly contribute to productivity growth.
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Vietnam has achieved remarkable success in reducing poverty while controlling inequality. The country’s broad-based growth reflects the government’s focus on developing labor-intensive export sectors while investing heavily in human capital that saw the country exceed its peers.
... See More + However, gains have been concentrated among the Kinh and Hoa ethnic majority, while minority groups have not only continued to experience poverty rates far above the national average, but have seen slower progress too. This report analyzes recent trends in poverty and shared prosperity. It presents the findings of the 2016 Vietnam household and living standards survey (VHLSS), highlighting important progress and identifying new challenges. The report is organized into two main sections. The first section reviews Vietnam’s progress in reducing poverty and promoting share prosperity. It describes updated poverty and shared prosperity trends, the nature of economic mobility, and the drivers of poverty reduction. The second section – titled leaving no one behind is more forward-looking, starting by identifying major constraints faced by the poor, then proceeding to lay out challenges for moving the poverty and shared prosperity agenda going forward.
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This paper presents a comprehensive analysis of economic and social mobility in countries in the South Caucasus by complementing available household survey data in each of the countries in the subregion with other sources, such as the Life in Transition Survey (2016).
... See More + The first part of the paper, concentrated on intragenerational mobility, finds that despite progress made in reducing poverty over the past decade, there appears to be a significant amount of churning around the poverty line. Moreover, in Georgia and Armenia, roughly one in eight individuals lived in a state of chronic poverty in 2015, and in the case of Georgia, chronic poverty is not an exclusive phenomenon for rural areas. In addition, although social programs have provided a lifeline for the chronic poor, the ability to tap into labor market opportunities has been the ticket out of poverty. The second part of the paper expands the analysis to intergenerational or social mobility. The main findings are that (1) a higher proportion of the population in this subregion considers their pre-transition family life and the lives of their parents when they were of similar age as appropriate benchmarks to evaluate their current economic situations in comparison with the other transition countries, and (2) over half of the Georgian and Armenian population disagreed with the statement that asked their views on having a better in life than their parents, aligning with the ‘growing but unhappy’ trend that has been reported for the region.
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Working Paper (Numbered Series) 125622 JAN 01, 2018
Vietnam has achieved remarkable success in reducing poverty while controlling inequality. The country’s broad-based growth reflects the government’s focus on developing labor-intensive export sectors while investing heavily in human capital that saw the country exceed its peers.
... See More + However, gains have been concentrated among the Kinh and Hoa ethnic majority, while minority groups have not only continued to experience poverty rates far above the national average, but have seen slower progress too. This report analyzes recent trends in poverty and shared prosperity. It presents the findings of the 2016 Vietnam household and living standards survey (VHLSS), highlighting important progress and identifying new challenges. The report is organized into two main sections. The first section reviews Vietnam’s progress in reducing poverty and promoting share prosperity. It describes updated poverty and shared prosperity trends, the nature of economic mobility, and the drivers of poverty reduction. The second section – titled leaving no one behind is more forward-looking, starting by identifying major constraints faced by the poor, then proceeding to lay out challenges for moving the poverty and shared prosperity agenda going forward.
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