What is Behind the Decline in Poverty Since 2000? Evidence from Bangladesh, Peru and Thailand

61 Pages Posted: 20 Apr 2016

Date Written: September 1, 2012

Abstract

This paper quantifies the contributions of different factors to poverty reduction observed in Bangladesh, Peru and Thailand over the last decade. In contrast to methods that focus on aggregate summary statistics, the method adopted here generates entire counterfactual distributions to account for the contributions of demographics and income from labor and non-labor sources in explaining poverty reduction. The authors find that the most important contributor was the growth in labor income, mostly in the form of farm income in Bangladesh and Thailand and non-farm income in the case of Peru. This growth in labor incomes was driven by higher returns to individual and household endowments, pointing to increases in productivity and real wages as the driving force behind poverty declines. Lower dependency ratios also helped to reduce poverty, particularly in Bangladesh. Non-labor income contributed as well, albeit to a smaller extent, in the form of international remittances in the case of Bangladesh and through public and private transfers in Peru and Thailand. Transfers are more important in explaining the reduction in extreme compared with moderate poverty.

Suggested Citation

Inchauste Comboni, Maria Gabriela and Olivieri, Sergio and Saavedra-Chanduvi, Jaime and Winkler, Hernan Jorge, What is Behind the Decline in Poverty Since 2000? Evidence from Bangladesh, Peru and Thailand (September 1, 2012). World Bank Policy Research Working Paper No. 6199, Available at SSRN: https://ssrn.com/abstract=2148270

Maria Gabriela Inchauste Comboni (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Sergio Olivieri

Universidad Nacional de La Plata (UNLP) ( email )

7 Nº 776
Buenos Aires, BA 1900
Argentina

Jaime Saavedra-Chanduvi

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

Hernan Jorge Winkler

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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