Publication: Why Did Poverty Decline in India?: A Nonparametric Decomposition Exercise
Date
2016-03
ISSN
Published
2016-03
Author(s)
Abstract
This paper uses panel data to analyze
factors that contributed to the rapid decline in poverty in
India between 2005 and 2012. The analysis employs a
nonparametric decomposition method that measures the
relative contributions of different components of household
livelihoods to observed changes in poverty. The results show
that poverty decline is associated with a significant
increase in labor earnings, explained in turn by a steep
rise in wages for unskilled labor, and diversification from
farm to nonfarm sources of income in rural areas. Transfers,
in the form of remittances and social programs, have
contributed but are not the primary drivers of poverty
decline over this period. The pattern of changes is
consistent with processes associated with structural
transformation, which add up to a highly pro-poor pattern of
income growth over the initial distribution of income and
consumption. However, certain social groups (Adivasis and
Dalits) are found to be more likely to stay in or fall into
poverty and less likely to move out of poverty. And even as
poverty has reduced dramatically, the share of vulnerable
population has not.
Link to Data Set
Citation
“Balcazar, Carlos Felipe; Desai, Sonal; Murgai, Rinku; Narayan, Ambar. 2016. Why Did Poverty Decline in India?: A Nonparametric Decomposition Exercise. Policy Research Working Paper;No. 7602. © World Bank, Washington, DC. http://hdl.handle.net/10986/24143 License: CC BY 3.0 IGO.”
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