Abstract
Standard growth incidence curves describe how growth episodes impact on the overall income distribution. However, measuring the pro-poorness of the growth process is complex due to measurement errors, and to the effect of shocks that may hit the percentiles of the income distribution in different ways. Therefore, standard growth incidence curves may misrepresent the true growth process and its distributive impact. Relying on a non-anonymous approach, we compare actual growth episodes at each percentile of the initial personalized distribution with counterfactual mobility profiles which rule out the presence of shocks. We consider Indonesia in 2000–2007 and 2007–2014, two growth spells in which there was substantial, significant upward mobility among the initially poorer, a sizeable part of which cannot be explained by unobserved individual endowments or standard socio-economic attributes. The difference between actual and expected growth is related, in the early 2000s, to the economy-wide transformations, which characterized the early years of the post-Suharto era. However, in the more recent years, it can be largely attributed to individual recovery from previous negative losses and high vulnerability and reactivity to shocks for the poor.
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Acknowledgements
Stephan Klasen sadly passed away before the revision of this article; we are grateful for all his contributions to this project. The authors acknowledge the financial support of the Ministry of Science and Culture of Lower Saxony (MWK) and from the French State in the framework of the Investments for the Future programme IdEx Université de Bordeaux / GPR HOPE. A previous version of this study has been prepared within the UNU-WIDER project Social mobility in the Global South – concept, measures and determinants. The authors are grateful to the Editor, two anonymous reviewers, Francisco Ferreira, Sergio Firpo, Antonio Galvao, Gary Fields, Michael Grimm, Fabio Clementi and the participants in the 8th ECINEQ (Society for the Study of Economic Inequality) Meeting for very useful comments and suggestions.
CRediT author statement: Stephan Klasen: Conceptualization, Methodology. Thomas Kneib: Methodology, Writing—Review & Editing. Maria C. Lo Bue: Conceptualization, Formal Analysis, Writing – Original Draft, Writing—Review & Editing. Vincenzo Prete: Formal Analysis, Visualization. The datasets generated during and/or analysed in this study are available from the corresponding author on request. The usual disclaimer applies.
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Klasen, S., Kneib, T., Lo Bue, M.C. et al. What’s behind pro-poor growth? An investigation of its drivers and dynamics. J Econ Inequal (2024). https://doi.org/10.1007/s10888-024-09628-7
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DOI: https://doi.org/10.1007/s10888-024-09628-7