Syndicate content

Household Income

Thomas Piketty on inequality in developing countries (great, but still not enough on politics)

Duncan Green's picture

I heard econ rock star Thomas Piketty speak for the first time last week – hugely enjoyable. The occasion was the annual conference of the LSE’s new International Inequalities Institute, with Piketty headlining. He was brilliant: original and funny, riffing off traditional France v Britain tensions, and reeling off memorable one liners: ‘meritocracy is a myth invented by winners’; ‘It’s difficult to be an honest country in today’s world. Britain used to be an honest country.’

He started with a mea culpa for the lack of attention in his best selling Capital in the 21stCentury to inequality in developing countries. The good news is that he is now putting that right, with research under way on inequality in South Africa, Brazil, the Middle East, India and China. He gave us a preview on the first three.

His overall conclusion? "Official measures vastly underestimate inequality". The most common reason for this is that inequality stats are drawn from household surveys, but samples of households typically miss the few megarich ones, and so underestimate the money at the top. He prefers to use tax and income data, which he has now got access to from governments because of his newfound fame. Even that data doesn’t tell the whole story, as it misses tax evasion, for example, but it’s a step in the right direction.

Campaign Art: Wedding vows of poverty

Roxanne Bauer's picture

People, Spaces, Deliberation bloggers present exceptional campaign art from all over the world. These examples are meant to inspire.

Although illegal in most countries, child marriage remains a common practice. Globally, about 39,000 girls are forced to marry each day; that's another child marriage every 2 seconds.  It is often hidden from public discussion, as young girls and boys are often married early to alleviate their family’s financial burden or in hopes of securing a better future for them.  While both genders are affected, child marriage disproportionately affects young females. 
 
Few child brides stay in the classroom, which is unfortunate not only because these girls lose out on an aspect of self-development and exploration, but also because the loss of educational achievement prevents them from acquiring more lucrative jobs, thereby improving their household income. The World Bank’s 2012 World Development Report on Gender Equality and Development drew attention to the fact that the exclusion of girls and women from school results in a less educated workforce, inefficient allocation of labor, lost productivity, and consequently diminished progress in economic development. It also identified a multiplier effect:  better educated women tend to be healthier, have fewer children, and provide better health care and education to their children, all of which eventually improve the well-being of all individuals and can lift households out of poverty. These benefits also transmit across generations, as well as to communities at large.

Nevertheless, in 26 countries, girls are more likely to be married before age 18 than enrolled in secondary school, according to a report, “Vows of Poverty”, from CARE.  The report was released to mark International Day of the Girl on Oct. 11, 2015, and provides an overview of the forces driving young girls into marriage and out of school while also describing what can be done to reverse those trends.  The following video is part of their campaign end child marriage for girls worldwide.
 
Vows Of Poverty


Migration to cities can equalize household income in rural China

Xubei Luo's picture

With Nong Zhu

Migrant workers have been contributing to one-sixth of China’s GDP growth since the mid 1980s. The impact of rural migrants’ contribution is best seen in cities during the Chinese New Year, when they return to reunite with their families, leaving behind a massive urban labor shortage. This happens every year despite urban families and restaurant owners offering high bonuses.

There is a consensus that migration has contributed to increased rural income, but views differ on its impact on rural inequality. My view is that rural households with higher incomes are not more likely than poorer households to participate in migration or benefit disproportionately from it. Adding to my recent blog in People Move, I would like to discuss the reasons behind this.