Person:
Chen, Shaohua

Poverty and Inequality Unit, Development Research Group, The World Bank

Fields of Specialization

Poverty measurement

Departments

Poverty and Inequality Unit, Development Research Group, The World Bank

Last updated January 31, 2023

Biography

Shaohua Chen is a Lead Statistician in the Development Research Group of the World Bank. She manages the Global Poverty database and all developing countries’ poverty, inequality estimations at the World Bank since 1991. Her research has focused on poverty and inequality measurement, and program/policy impacts evaluation. Before joining the World Bank, she was the lecturer of business school of Huazhong University of Science and Technology in China. She received her Master's Degree in Statistical Computing from American University.

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Publication Search Results

Now showing 1 - 10 of 26

China's (Uneven) Progress Against Poverty

(World Bank, Washington, D.C., 2004-09) Ravallion, Martin ; Chen, Shaohua

While the incidence of extreme poverty in China fell dramatically over 1980-2001, progress was uneven over time and across provinces. Rural areas accounted for the bulk of the gains to the poor, though migration to urban areas helped. The pattern of growth mattered. Rural economic growth was far more important to national poverty reduction than urban economic growth. Agriculture played a far more important role than the secondary or tertiary sources of gross domestic product (GDP). Rising inequality within the rural sector greatly slowed poverty reduction. Provinces starting with relatively high inequality saw slower progress against poverty, due both to lower growth and a lower growth elasticity of poverty reduction. Taxation of farmers and inflation hurt the poor. External trade had little short-term impact.
How Have the World's Poorest Fared Since the Early 1980s?

(World Bank, Washington, D.C., 2004-06) Chen, Shaohua ; Ravallion, Martin

The authors present new estimates of the extent of the developing world's progress against poverty. By the frugal $1 a day standard, they find that there were 1.1 billion poor in 2001-almost 400 million fewer than 20 years earlier. Over the same period, the number of poor declined by more than 400 million in China, though half of this decline was in the first few years of the 1980s. The number of poor outside China rose slightly over the period. A marked bunching up of people between $1 and $2 a day has also emerged. Sub-Saharan Africa has become the region with the highest incidence of extreme poverty and the greatest depth of poverty. If these trends continue, then the aggregate $1 a day poverty rate for 1990 will be halved by 2015, though only East and South Asia will reach this goal.
Benefit Incidence with Incentive Effects, Measurement Errors and Latent Heterogeneity

(World Bank, Washington, DC, 2013-08) Ravallion, Martin ; Chen, Shaohua

Empirical studies of tax and benefit incidence routinely ignore behavioral responses and measurement errors. This paper offers an econometric method of estimating the mean benefit withdrawal rate (marginal tax rate) allowing for incentive effects, measurement errors, and correlated latent heterogeneity in incidence. Under the method's identifying assumptions, a feasible instrumental variables estimator corrects for incentive effects and measurement errors, and provides a bound for the true value when there is correlated incidence heterogeneity. A case study for a large cash transfer program in China indicates that past methods of assessing benefit incidence using either nominal official rates or raw tabulations from survey data are deceptive. The program entails a nominal 100 percent benefit withdrawal rate -- a poverty trap. However, the paper finds that the actual rate is much lower, and clearly too low in the light of the literature on optimal income taxation. The paper discusses likely reasons based on the qualitative observations.
Welfare Impacts of China's Accession to the World Trade Organization

(Washington, DC: World Bank, 2004-01) Chen, Shaohua ; Ravallion, Martin

Data from China's national rural and urban household surveys are used to measure and explain the welfare impacts of changes in goods and factor prices attributable to accession to the World Trade Organization (WTO). The price changes are estimated separately using a general equilibrium model to capture both direct and indirect effects of the initial tariff changes. The welfare impacts are first-order approximations based on a household model incorporating own-production activities calibrated to household-level data and imposing minimum aggregation. The results show negligible impacts on inequality and poverty in the aggregate. However, diverse impacts emerge across household types and regions, associated with heterogeneity in consumption behavior and income sources, with possible implications for compensatory policy responses.
Hidden Impact? Ex-Post Evaluation of an Anti-Poverty Program

(World Bank, Washington, DC, 2003-05) Chen, Shaohua ; Ravallion, Martin

By the widely used difference-in-difference method, the Southwest China Poverty Reduction Project had little impact on the proportion of people in beneficiary villages consuming less than $1 a day-despite a public outlay of $400 million. Is that right, or is the true impact being hidden somehow? The authors find that impact estimates are quite sensitive to the choice of outcome indicator, the poverty line, and the matching method. There are larger poverty impacts at lower poverty lines. And there are much larger impacts on incomes than consumptions. Uncertainty about the impact probably made it hard for participants to infer the gain in permanent income, so they saved a high proportion of the short-term gain.
Measuring Pro-Poor Growth

(World Bank, Washington, DC, 2001-08) Ravallion, Martin ; Chen, Shaohua

It is important to know how aggregate economic growth or contraction was distributed according to initial levels of living. In particular, to what extent can it be said that growth was "pro-poor?" There are problems with past methods of addressing this question, notably that the measures used are inconsistent with the properties that are considered desirable for a measure of the level of poverty. The authors provide some new tools for assessing to what extent the aggregate growth process in an economy is pro-poor. The key measurement tools is the "growth incidence curve," which gives growth rates by quantiles (such as percentiles) ranked by income. Taking the area under this curve up to the headcount index of poverty gives a measure of the rate of pro-poor growth consistent with the Watts index for the level of poverty. The authors give examples using survey data for China during the 1990s. Over 1990-99, the ordinary growth rate of household income per capita in China was 7 percent a year. The growth rate by quantile varied from 3 percent for the poorest percentile to 11 percent for the richest, while the rate of pro-poor growth was around 4 percent. The pattern was reversed for a few years in the mid-1990s, when the rate of pro-poor growth rose to 10 percent a year--above the ordinary growth rate of 8 percent.
Household Welfare Impacts of China's Accession to the World Trade Organization

(World Bank, Washington, DC, 2003-05) Chen, Shaohua ; Ravallion, Martin

The authors use China's national household surveys for rural and urban areas to measure and explain the welfare impacts of the changes in goods and factor prices attributed to WTO accession. Price changes are estimated separately using a general equilibrium model to capture both direct and indirect effects of the initial tariff changes. The welfare impacts are first-order approximations based on a household model incorporating own-production activities and are calibrated to the household-level data imposing minimum aggregation. The authors find negligible impacts on inequality and poverty in the aggregate. However, diverse impacts emerge across household types and regions associated with heterogeneity in consumption behavior and income sources, with possible implications for compensatory policy responses.
China's Growth and Poverty Reduction : Trends between 1990 and 1999

(World Bank, Washington, DC, 2001-07) Chen, Shaohua ; Wang, Yan

The authors investigate recent rends in poverty, and inequality in China, decomposing data on poverty reduction to see who has benefited most from China's economic growth. They find that, by several measures, poverty declined significantly in the 1990s, across a wide range of poverty lines, except that a slight slowdown in China's export, and economic growth in 1997-99 might have hurt the poor. There was a slight increase in the poverty headcount between 1997 and 1999, using lower poverty lines, and a worsening of the poverty gap index. Average per capita consumption declined for farmers, especially those living in poor regions such as Gans, Heilongjiang, Sanxi, and Xinjiang. It is unclear whether this decline was attributable to Asia's economic crisis. Economic growth contributed significantly to poverty reduction, but rising inequality worsened both rural, and urban income distributions - except during the Asian crisis, when the distribution remained relatively stable. The poor benefited far less than the rich from economic growth. Income growth reached, or exceeded the average growth rate only for the richest twenty percent of the population. The authors then examine the relationship between human capital, growth, and poverty. They find that the accumulation of human capital had slowed, and that there is a huge regional disparity in human capital stock. And the distribution of education is becoming increasingly skewed. China must address this problem if it is to succeed in attacking poverty, and inequality.
How Did the World's Poorest Fare in the 1990s?

(World Bank, Washington, DC, 2000-08) Chen, Shaohua ; Ravallion, Martin

Drawing on data from 265 national sample surveys spanning 83 countries, the authors find that there was a net decrease in the total incidence of consumption poverty between 1987 and 1998. But it was not enough to reduce the total number of poor people, by various definitions. The incidence of poverty fell in Asia and the Middle East and North Africa, changed little in Latin America and Sub-Saharan Africa, and rose in Eastern Europe and Central Asia. The two main proximate causes of the disappointing rate of poverty reduction: too little economic growth in many of the poorest countries, and persistent inequalities (in both income and other essential measures) that kept the poor from participating in the growth that did occur.
New Evidence on the Urbanization of Global Poverty

(World Bank, Washington, DC, 2007-04) Ravallion, Martin ; Chen, Shaohua ; Sangraula, Prem

The authors provide new evidence on the extent to which absolute poverty has urbanized in the developing world, and the role that population urbanization has played in overall poverty reduction. They find that one-quarter of the world's consumption poor live in urban areas and that the proportion has been rising over time. By fostering economic growth, urbanization helped reduce absolute poverty in the aggregate but did little for urban poverty. Over 1993-2002, the count of the "$1 a day" poor fell by 150 million in rural areas but rose by 50 million in urban areas. The poor have been urbanizing even more rapidly than the population as a whole. Looking forward, the recent pace of urbanization and current forecasts for urban population growth imply that a majority of the poor will still live in rural areas for many decades to come. There are marked regional differences: Latin America has the most urbanized poverty problem, East Asia has the least; there has been a "ruralization" of poverty in Eastern Europe and Central Asia; in marked contrast to other regions, Africa's urbanization process has not been associated with falling overall poverty.