Income Mobility and Its Implication on Government Welfare Expenditure

This paper analyzes income mobility betwen two consecutive periods and estimates the potential effects of introducing differentiated poverty treatment on direct government welfare expenditure. This is done by using a constructed pseudo-panel under the pre-existing two conditions: log-normality of household income and the stability of the household income distribution over time. This paper finds that income mobility shrank from the late 1990s onward. As a result, the probability that a poor household escapes from poverty dwindles. This is partly because the labor market becomes slightly more rigid and also partly because the population is rapidly aging: the share of the elderly who are mostly retirees is growing rapidly. A pseudo-panel study shows that total subsidies to support all poor household escapes from poverty dwindles. This is partly because the labor market becomes slightly more rigid and also partly because the population is rapidly aging: the share of the elderly who are mostly retirees is growing rapidly. A pseudo-panal study shows that total subsidies to support all poor households amount to 7.0 trillion won a year. It also shows that the lifelong poverty rate is 3.4%, approximately on third of the short-run poverty rate of 10.9%. A differential treatement on short-run and long-run poverty can save roughly half the fiscal burden of supporting the poor.

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The Impact of Social Safety Net Programs on Poor Household Income

JEJAK ◽

10.15294/jejak.v11i2.16049 ◽

2018 ◽

Vol 11 (2) ◽

pp. 244-262

Author(s):

Hengky S.H. Prayitno ◽

Dwi Budi Santoso ◽

Marlina Ekawaty

Keyword(s):

Labor Market ◽

Social Security ◽

Household Income ◽

Safety Net ◽

Poverty Rate ◽

Intervention Programs ◽

Poor Household ◽

Social Safety Net ◽

Poor Households ◽

Market Intervention

Indonesian government has established social safety net programs to reduce poverty and increase the productivity and income of poor households. Among other provinces in Indonesia, East Java has the highest poverty rate. Thus, this research aims to analyze the effectiveness of social safety net programs in reducing poverty rate in East Java. This research uses quantitative approach to measure the contribution of social safety net programs towards the income of poor households in East Java. This research employs equivalent simultaneous equation with three-stage least square (3SLS) method on secondary cross section data obtained from National Socio-Economic Survey (Susenas), March 2015. This research calculates and analyzes the impacts of social aid, social protection and labor market intervention programs towards the income of poor household income. The results show that social aid and labor market intervention programs have positive implication on the income of poor households. On the other hand, social security has no significant implication. Moreover, social security provides a safety net when a household faces unexpected situation such as redundancy, accident and death. Social security programs prevent poor households for being poorer.

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MI Double Feature: Multiple Imputation to Address Nonresponse and Rounding Errors in Income Questions

Austrian Journal of Statistics ◽

10.17713/ajs.v44i2.77 ◽

2015 ◽

Vol 44 (2) ◽

pp. 59-71 ◽

Cited By ~ 4

Author(s):

Joerg Drechsler ◽

Hans Kiesl ◽

Matthias Speidel

Keyword(s):

Labor Market ◽

Social Security ◽

Multiple Imputation ◽

Household Income ◽

Panel Study ◽

The Other ◽

Sensitive Information ◽

Rounding Errors ◽

The One ◽

Source Of Error

Obtaining reliable income information in surveys is difficult for two reasons. On the one hand, many survey respondents consider income to be sensitive information and thus are reluctant to answer questions regarding their income. If those survey participants that do not provide information on their income are systematically different from the respondents - and there is ample of research indicating that they are - results based only on the observed income values will be misleading. On the other hand, respondents tend to round their income. Especially this second source of error is usually ignored when analyzing the income information.In a recent paper, Drechsler and Kiesl (2014) illustrated that inferences based on the collected information can be biased if the rounding is ignored and suggested a multiple imputation strategy to account for the rounding in reported income. In this paper we extend their approach to also address the nonresponse problem. We illustrate the approach using the household income variable from the German panel study "Labor Market and Social Security''.

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Basic Old-Age Pension and financial wellbeing of older adults in South Korea

Ageing and Society ◽

10.1017/s0144686x14000051 ◽

2014 ◽

Vol 35 (5) ◽

pp. 1055-1074 ◽

Cited By ~ 8

Author(s):

EUNHAE SHIN ◽

YOUNG KYUNG DO

Keyword(s):

Older People ◽

Old Age ◽

Panel Data Analysis ◽

Panel Study ◽

The Elderly ◽

Safety Net ◽

Poverty Rate ◽

Beneficial Effects ◽

Increasing Demand ◽

Using Data

ABSTRACTSouth Korea's old-age poverty rate is among the highest in the developed world. Confronted with the increasing demand for a social safety net for older people, the South Korean government introduced the Basic Old-Age Pension (BOAP) in 2008. The BOAP is a non-contributory, means-tested pension covering 70 per cent of the elderly population, with monthly benefits amounting to 84 kW (thousand Korean won, approximately equivalent to US $1) for singles and 139 kW for couples. Little empirical research has been conducted, however, to evaluate the effectiveness of the new pension programme in supporting the financial wellbeing of older people. Using data from the 2008–2010 Korea Welfare Panel Study, a panel data analysis is conducted to estimate the effects of the BOAP on three sets of financial wellbeing measures: financial difficulty, monthly consumption and overall financial satisfaction. The results suggest that the BOAP has beneficial effects on the financial wellbeing of older people by improving affordability of basic subsistence items such as heating and nutritious meals, particularly among the older-old group. However, the effects are limited to these few outcomes only; overall financial wellbeing and other important indicators remain unchanged.

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Remittance and Economic Development of Nepal

Patan Pragya ◽

10.3126/pragya.v5i1.30475 ◽

2019 ◽

Vol 5 (1) ◽

pp. 196-208

Author(s):

Badri Narayan Sah

Keyword(s):

Economic Development ◽

Household Income ◽

Poverty Reduction ◽

Economic Status ◽

Poverty Rate ◽

Daily Consumption ◽

Gulf Countries ◽

The World ◽

Internal Sources ◽

Sources Of Capital

Nepal is one of the least developed but high remittances recipient countries in the world. Nepal received remittance from US$ 8.1 billion in 2016 and it is ranked 23rd among the remittance receiving countries in the world. Remittance income is one of the major sources of capital formation in the context of Nepal. It is directly related with the labour migration in a country which in return enhances foreign employment. Remittances have become a major contributing factor to increasing household income as well as country’s GDP. About 30 percent of Nepal’s GDP comes in the form of remittance money which is sent home by Nepalese working abroad and it helps to reduce country’s poverty rate. Poverty reduction took place in Nepal from 42 percent (1995/96) to 25.2 percent (2010/11). Nepal’s remittance recipients reached 31.5 percent GDP in 2015. The total amount of remittance in the country is 259 billion and among which 20 percent is internal sources, 11 percent from India and 69 percent from Gulf countries. Remittance received by the households is mainly used for daily consumption (79 percent) and remaining other purposes. Moreover, Nepal’s economic status mostly depends on remittance received which is therefore migration driven economy.

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Determinants of poor household income in Ca Mau province, Vietnam

Can Tho University Journal of Science ◽

10.22144/ctu.jen.2017.007 ◽

2017 ◽

Vol 05 ◽

pp. 59

Author(s):

Duy, V.Q.

Keyword(s):

Household Income ◽

Poor Household

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Zastosowanie modelu logitowego do analizy czynników wpływających na bezrobocie wśród ludności wiejskiej

Zeszyty Naukowe SGGW - Ekonomika i Organizacja Gospodarki Żywnościowej ◽

10.22630/eiogz.2015.110.18 ◽

2015 ◽

pp. 33-42 ◽

Cited By ~ 1

Author(s):

Dorota Kmieć

Keyword(s):

Labor Market ◽

Rural Population ◽

Household Income ◽

Logit Model ◽

Demographic Characteristics ◽

Explanatory Factors ◽

Personal Competencies ◽

The Impact

The paper attempts to identify the causes of unemployment among the rural population. Logit model was used to determine the size of the impact of explanatory factors examined the situation in the labor market. The following potential predictors were considered: socio-demographic characteristics and household income, improving one’s skills through training and personal competencies.

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France

10.1093/oso/9780198807032.003.0006 ◽

2018 ◽

Author(s):

Philippe Askenazy ◽

Bruno Palier

Keyword(s):

Income Inequality ◽

Labour Market ◽

Rapid Growth ◽

Household Income ◽

General Trend ◽

Age Groups ◽

Wage Growth ◽

The Elderly ◽

Wage Setting ◽

Rich Countries

This chapter describes France as apparently one of the few rich countries to have avoided a significant increase in income inequality in recent decades. However, stable average inequalities mask an asymmetric trend of income between age groups, the elderly improving their situation while the young see theirs worsening. Furthermore, it shows that behind this relatively still surface, a general trend of precarization of more and more ordinary workers is occurring. The importance of wage-setting processes and of regulation of the labour market is brought out, together with the way the tax and transfer systems have operated, in restraining the forces driving inequality upwards. Wage growth, while limited, has thus been reasonably uniform across the distribution and together with the redistributive system have kept household income inequality within bounds. However, in response to high unemployment both regulatory and tax–transfer systems have served to underpin the very rapid growth in precarious working over the last decade, representing a very serious challenge for policy.

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LABOR MARKET DYNAMICS UNDER TECHNOLOGY SHOCKS: THE ROLE OF SUBSISTENCE CONSUMPTION

Macroeconomic Dynamics ◽

10.1017/s136510052100016x ◽

2021 ◽

pp. 1-29

Author(s):

Sangyup Choi ◽

Myungkyu Shim

Keyword(s):

Labor Market ◽

Business Cycle ◽

Developing Economies ◽

Structural Var ◽

Market Dynamics ◽

Technology Shocks ◽

Structural Factors ◽

Long Run ◽

Labor Market Dynamics ◽

Short Run

This paper establishes new stylized facts about labor market dynamics in developing economies, which are distinct from those in advanced economies, and then proposes a simple model to explain them. We first show that the response of hours worked and employment to a technology shock—identified by a structural VAR model with either short-run or long-run restrictions—is substantially smaller in developing economies. We then present compelling empirical evidence that several structural factors related to the relevance of subsistence consumption across countries can jointly account for the relative volatility of employment to output and that of consumption to output. We argue that a standard real business cycle (RBC) model augmented with subsistence consumption can explain the several salient features of business cycle fluctuations in developing economies, especially their distinct labor market dynamics under technology shocks.

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Vocational training choice from a regional perspective

Empirical Research in Vocational Education and Training ◽

10.1186/s40461-020-00105-9 ◽

2021 ◽

Vol 13 (1) ◽

Author(s):

Katja Schuster ◽

Anne Margarian

Keyword(s):

Labor Market ◽

Secondary School ◽

Labor Markets ◽

Panel Study ◽

Local Competition ◽

Opportunity Structures ◽

Upper Secondary ◽

Welfare Implications ◽

Urban Labor Markets ◽

And Training

AbstractMotivated by discussions of skill mismatches on local German vocational educational and training (VET) markets, this paper analyses how occupational segments of VET entry of individuals with lower and intermediate secondary school degree relate to local labor market characteristics. The econometric analysis applies data from a survey conducted with 9th graders within the German National Educational Panel Study (NEPS). Considering opportunity structures and the local competition for training positions, we find that the match between occupations' skill demands and individuals' abilities tends to be specifically close in diverse and competitive urban labor markets. In non-competitive peripheral labor markets, in contrast, graduates with lower school certificates seem to have a higher likelihood of entering VET in segments that are specifically attractive for graduates with upper secondary school degree. The results on the allocation of abilities and the weight of preferences under different labor market conditions have different welfare implications from an individual, regional and general economic perspective.

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