Poverty and Inequality

Poverty and InequalitySara HsuPoverty and Inequality in Development TheoryPoverty measurement has changed from one of relative income gaps to multidimensional indices of poverty. Poor are socially constructed phenomenon.Transient poor are those who can be classified as poor in some periods and not in others.Ravallion (1988) finds an expected value of a poverty measure which results from changes in a welfare indicator. Inequality persists due to credit market imperfections.Quality of institutions impact distribution and vice versa.Poverty in IndiaHome to 20% of worlds poorestFound in rural areas, lower castesChild malnutritionFarmer suicidesAgricultural policiesLand redistributionPoverty reduction hard to determine from data

Inequality in IndiaGrowth has been concentrated in skilled sectorsRural casual laborGini coefficient

Poverty in ChinaProblem with reported statisticsRural phenomenonUrban phenomenon (rural migrants)Thin land markets

Inequality in ChinaCommunism and equalityIssue in nineties with privatizationInland-coastal disparityGovernment policies

Poverty in JapanNo official poverty lineFifth highest poverty rate in OECDUnemployment as strong causeHomeless cannot receive public assistance with no home!

Inequality in JapanIncreasing inequality, early 20th centuryLagging productivity in rural sectorRelatively equal from WWII through 1970sIncrease in inequality in 1980sAging society

Poverty Policy in PracticeIndia:Integrated Rural Development Program Swarnjayanti Gram Swarozgar Yojana (SGSY) National Rural Employment Program Rural Landless Employment Guarantee Programs National Social Assistance ProgramChinaHouseholds responsibility SystemTargeting poor counties Food for Work Grain for Green Minimum Living Standard JapanPublic Assistance

Bottom LinePoverty in India is highest, second highest in China, and low but significant in JapanPoverty alleviation policies have sought to reduce poverty in all three countries, with varying levels of success.Did You Know?Indias poorest state is Bihar in the North. Most of the population lives in rural areas and focuses on agriculture. Industry is very small.The state is attempting to get over its image as a failed state in the eyes of many.FinQuestions?