As the 2015 deadline to meet all the MDGS draws near, many are asking what comes next, including a recently appointed 26 member panel of development and political big-shots. The high-level panel, which met last Tuesday for the first time, faces huge pressure working on a post-2015 “development vision.” 'Stakes are high,' says Paige McClanahan in an insightful post on the Poverty Matters blog.&
While education is one of the cornerstones of development and is enshrined in the Millennium Development Goals, the pay-offs from a Bachelor’s degree or higher do not enjoy the same confidence. In the wake of the global financial crisis, for some, a college degree is a “lousy investment.” (Read the Daily Beast article to know why). But new data prove otherwise. Adam Looney and Michael Greenstone at the Hamilton Project, through chart illustration, show that “the more income you earn, the more likely you are to have gone to college.” To find out more, read the post “College, still worth it” on the Economix blog here. While we are still discussing education, here’s another interesting finding from the OECD “Education at a Glance 2012” report. According to the report, a college education not only makes you wise and wealthy, it also makes you healthy. Curious? Read this Economist article to know how.
More than ten years ago Ronald Inglehart, of the University of Michigan, and his team at the World Values Survey asked thousands of respondents around the world to rate their views, on a scale of 1 to 10, on whether they felt inequality in their countries should go up or down. The way they phrased the question was that 1 corresponded to full agreement with the statement that “incomes should be made more equal”, whereas 10 stood for “we need larger income differences as incentives for individual effort”.
Inequality is getting more attention in efforts to monitor development progress. Alongside established measures of poverty and human development there have been calls for monitoring inequality. How should this be done?
We focus here on just one aspect of inequality, though an important aspect, namely the inequality of consumption or income. This is about “inequality of results” not “inequality of opportunities,” which may be more important but is much harder to measure. And there are other dimensions of inequality that matter, such as inequality in access to health and education services. But this is the obvious place to start.
India experienced sustained economic growth for more than two decades following the economic liberalization in 1991. While economic growth reduced poverty significantly, it was also associated with an increase in inequality. Jean Dreze and Amartya Sen (2011) argue that Indian economic reform has been “unprecedented success” in terms of economic growth, but an “extraordinary failure” when it comes to improvements in the living standard of general population and social indicators. The contrasting news reports on billion dollar house (Mukesh Ambani’s house at Mumbai) and farmers’ suicides have brought the issue of income inequality to the spotlight for many people. Does the increase in inequality in post-reform India reflect deep-seated inequality of opportunity or efficient incentive structure in a market oriented economy?
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.
One is always grateful to see attention paid to the quality and quantity of household data available to study poverty. It is a subject dear to my heart and to my colleagues in the Living Standards Measurement Study (LSMS ) in the World Bank. In sub-Saharan Africa, as a recent Global Dashboard post titled “What do we really know about poverty and inequality?” by Claire Melamed points out, there is still a dearth of data, even after years of government effort and international support. But there are data -- in some countries lots of data -- so it’s worth highlighting what is there. Today I wanted to add some nuance to the discussion of income and assets raised by Claire and, probably more importantly, steer people to some new data that will, we hope, excite the most blasé of you out there.