Income Convergence and the Flow Out of Poverty in India, 1994-2005

44 Pages Posted: 30 Mar 2015

See all articles by Paola Barrientos Quiroga

Paola Barrientos Quiroga

Aarhus University - School of Business and Social Sciences

Niels-Hugo Blunch

Washington and Lee University; IZA Institute of Labor Economics

Nabanita Datta Gupta

Department of Economics and Business, Aarhus University; IZA Institute of Labor Economics

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Abstract

This paper explores the dynamics of income and poverty of rural Indian households, 1994-2005. The estimation strategy consists of convergence analysis to test whether poor households are catching-up in terms of income, followed by transition analysis to test whether poor households are more likely to exit poverty than to remain poor. The identification strategy explicitly addresses issues pertaining to the potential endogeneity and measurement error of initial income and poverty. We find evidence of income convergence and a higher probability of exiting poverty than of remaining poor. The key variables driving these results are education, occupation and asset ownership.

Keywords: income convergence, poverty transition, endogeneity, measurement error, IHDS & HDPI data

JEL Classification: O12, O47, O53

Suggested Citation

Barrientos Quiroga, Paola and Blunch, Niels-Hugo and Datta Gupta, Nabanita, Income Convergence and the Flow Out of Poverty in India, 1994-2005. IZA Discussion Paper No. 8929, Available at SSRN: https://ssrn.com/abstract=2586432

Paola Barrientos Quiroga (Contact Author)

Aarhus University - School of Business and Social Sciences ( email )

Nordre Ringgade 1
Aarhus C, DK-8000
Denmark

Niels-Hugo Blunch

Washington and Lee University ( email )

Department of Economics
Lexington, VA 24450
United States

HOME PAGE: http://www.wlu.edu/williams-school/economics/faculty-and-staff/profile?ID=x258

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Nabanita Datta Gupta

Department of Economics and Business, Aarhus University ( email )

Fuglesangs Allé 4
8210 Aarhus V
Denmark
+45 87165207 (Phone)

HOME PAGE: http://pure.au.dk/portal/da/ndg@econ.au.dk

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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