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A framework for the decomposition of poverty differences with an application to poverty differences between countries

Biewen, Martin and Jenkins, Stephen P. ORCID: 0000-0002-8305-9774 (2005) A framework for the decomposition of poverty differences with an application to poverty differences between countries. Empirical Economics, 30 (2). pp. 331-358. ISSN 0377-7332

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Identification Number: 10.1007/s00181-004-0229-1


We propose an Oaxaca-Blinder-like decomposition of poverty differences. The decomposition is based on a parametric model of the income distribution and can be used to decompose differences in poverty rates across countries or years. Poverty differences are decomposed into differences in the underlying distribution of poverty-relevant characteristics and differences in the incidence of poverty conditional on these characteristics. We illustrate our method by comparing levels and patterns of relative poverty in the USA, Great Britain and Germany during the 1990s. Our results suggest that the higher aggregate poverty rates in the USA and in Britain relative to Germany were mostly accounted for by higher poverty rates conditional on characteristics, which were partly offset by a more favourable distribution of poverty-relevant characteristics, in particular higher employment rates.

Item Type: Article
Official URL:
Additional Information: © 2005 Springer
Divisions: Social Policy
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: C - Mathematical and Quantitative Methods > C3 - Econometric Methods: Multiple; Simultaneous Equation Models; Multiple Variables; Endogenous Regressors > C31 - Cross-Sectional Models; Spatial Models; Treatment Effect Models
D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Sets: Departments > Social Policy
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Collections > Economists Online
Date Deposited: 03 Feb 2011 11:28
Last Modified: 20 Jul 2021 00:47

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