Premature mortality and poverty measurement in an OLG economy

Mathieu Lefebvre, Pierre Pestieau and Gregory Ponthiere

Journal of Population Economics, 2019, vol. 32, issue 2, No 9, 664 pages

Abstract: Abstract Following Kanbur and Mukherjee (Bull Econ Res 59(4):339–359 2007), a solution to the “missing poor” problem (i.e., selection bias in poverty measures due to income-differentiated mortality) consists in computing hypothetical poverty rates while assigning a fictitious income to the prematurely dead. However, in a dynamic general equilibrium economy, doing “as if” the prematurely dead were still alive is likely to affect wages, output and capital accumulation, with an uncertain effect on poverty. We develop a three-period OLG model with income-differentiated mortality and compare actual poverty rates with hypothetical poverty rates that would have prevailed if everyone faced the survival conditions of the top income class. Including the prematurely dead has an ambiguous impact on poverty, since it affects income distribution through capital dilution, composition effects, and horizon effects. Our results are illustrated by quantifying the impact of income-differentiated mortality on poverty measures for France (1820–2010).

Keywords: Income-differentiated mortality; Poverty measures; Missing poor; OLG models; Capital accumulation (search for similar items in EconPapers)
JEL-codes: E13 E21 I32 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Working Paper: Premature mortality and poverty measurement in an OLG economy (2019)
Working Paper: Premature mortality and poverty measurement in an OLG economy (2019)
Working Paper: Premature mortality and poverty measurement in an OLG economy (2019)
Working Paper: Premature mortality and poverty measurement in an OLG economy (2017)
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DOI: 10.1007/s00148-018-0688-x

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