Missing poor and income mobility

Mathieu Lefebvre, Pierre Pestieau and Gregory Ponthiere

No 2017035, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Higher mortality among the poor leads to selection biases in poverty measures. Whereas existing attempts to deal with the "missing poor" problem assume the absence of income mobility and assign to the prematurely dead a fictitious income equal to the last income enjoyed, this paper relaxes that assumption in order to study the impact of income mobility on the size of the missing poor bias. We use data on poverty above age 60 in 12 countries from the EU-SILC database, and we compare standard poverty rates with the hypothetical poverty rates that would have prevailed if (i) all individuals, whatever their income, had enjoyed the same survival conditions (the ones of the highest income class), and if (ii) all individuals within the same income class had been subject to the same income mobility process. It is shown that taking income mobility into account has adverse effects on corrected poverty measures across countries, and that it affects international comparisons in terms of old-age poverty.

Keywords: poverty; measurement; mortality; missing poor; income mobility (search for similar items in EconPapers)
JEL-codes: I32 (search for similar items in EconPapers)
Date: 2017-02-27
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https://sites.uclouvain.be/core/publications/coredp/coredp2017.html (application/pdf)

Related works:
Journal Article: Missing poor and income mobility (2019)
Working Paper: Missing poor and income mobility (2019)
Working Paper: Missing poor and income mobility (2019)
Working Paper: Missing poor and income mobility (2019)
Working Paper: Missing Poor and Income Mobility (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2017035

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