A Micro-Decomposition Analysis of the Macroeconomic Determinants of Human Development

This paper shows how differences in aggregate human development outcomes over time and space can be additively decomposed into a pure economic-growth component, a component attributed to differences in the distribution of income, and components att...

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Bibliographic Details
Main Authors: Lambert, Sylvie, Ravallion, Martin, van de Walle, Dominique
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
Online Access:http://documents.worldbank.org/curated/en/2007/09/8331633/micro-decomposition-analysis-macroeconomic-determinants-human-development
http://hdl.handle.net/10986/7343
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Summary:This paper shows how differences in aggregate human development outcomes over time and space can be additively decomposed into a pure economic-growth component, a component attributed to differences in the distribution of income, and components attributed to "non-income" factors and differences in the model linking outcomes to income or non-income characteristics. The income effect at the micro level is modeled non-parametrically, so as to flexibly reflect distributional changes. The paper illustrates the decomposition using data for Morocco and Vietnam, and the results offer some surprising insights into the observed aggregate gains in schooling attainments. A user friendly STATA program is available to implement the method in other settings.