Who Escaped Poverty and Who Was Left Behind? : A Non-Parametric Approach to Explore Welfare Dynamics Using Cross-Sections
This paper proposes a non-parametric adaptation of a recently developed parametric technique to produce point estimates of intra-generational economic mobility in the absence of panel data sets that follow individuals over time. The method predicts...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/608131508157256196/Who-escaped-poverty-and-who-was-left-behind-a-non-parametric-approach-to-explore-welfare-dynamics-using-cross-sections http://hdl.handle.net/10986/28555 |
| Summary: | This paper proposes a non-parametric
adaptation of a recently developed parametric technique to
produce point estimates of intra-generational economic
mobility in the absence of panel data sets that follow
individuals over time. The method predicts past individual
income or consumption using time-invariant observable
characteristics, which allows the estimation of mobility
into and out of poverty, as well as household-level income
or consumption growth, from cross-sectional data. The paper
validates this method by sampling repeated cross-sections
out of actual panel data sets from three countries in the
Latin America region and comparing the technique with
mobility from panels. Overall, the method performs well in
the three settings; with few exceptions, all estimates fall
within the 95 percent confidence intervals of the panel
mobility. The quality of the estimates does not depend in
general on the sophistication level of the underlying
welfare model's specifications. The results are
encouraging even for those specifications that include few
time-invariant variables as regressors. |
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