Toward a New Definition of Shared Prosperity: A Dynamic Perspective from Three Countries

24 Pages Posted: 20 Apr 2016 Last revised: 27 Apr 2018

See all articles by Hai-Anh Dang

Hai-Anh Dang

World Bank - Development Data Group (DECDG); IZA Institute of Labor Economics; Indiana University Bloomington - School of Public & Environmental Affairs (SPEA); Global Labor Organization (GLO); Vietnam National University Ha Noi; Vietnam Academy of Social Sciences (VASS) - Centre for Analysis and Forecasting

Peter F. Lanjouw

World Bank - Development Research Group (DECRG)

Date Written: June 8, 2015

Abstract

This paper proposes a new measure of growth in shared prosperity, based on shifts in population shares of different income groups over time. This measure complements the definition of shared prosperity recently proposed by the World Bank in which income growth of the bottom 40 percent is examined. The new measure?s strengths arise from its close ties to countries? national poverty lines and poverty measures, its focus on inclusion of the vulnerable population, and its identification of a population segment that is neither poor nor at significant risk of falling into poverty. The paper also offers a typology of scenarios for tracking shared prosperity under this measure. It provides illustrative examples using survey data from India, the United States, and Vietnam for the mid-to-late 2000s. Estimation results comparing the two approaches with measuring the evolution of shared prosperity are qualitatively consistent, and suggest that during this period, Vietnam enjoyed the greatest expansion in shared prosperity, followed by India and then the United States.

Keywords: Inequality, Economic Theory & Research, Economic Growth, Industrial Economics, Poverty Lines, Poverty Monitoring & Analysis, Poverty Diagnostics, Small Area Estimation Poverty Mapping, Poverty Assessment, Poverty Impact Evaluation, Climate Change Mitigation and Green House Gases

Suggested Citation

Dang, Hai-Anh H. and Lanjouw, Peter F., Toward a New Definition of Shared Prosperity: A Dynamic Perspective from Three Countries (June 8, 2015). World Bank Policy Research Working Paper No. 7294, Available at SSRN: https://ssrn.com/abstract=2616065

Hai-Anh H. Dang (Contact Author)

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Peter F. Lanjouw

World Bank - Development Research Group (DECRG) ( email )

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