This paper presents necessary and sufficient conditions for unambiguous changes in wage inequality in a dual economy, based on analysis of the entire Lorenz curve. These conditions are then used to analyze the distributional consequences of various types of economic growth. In particular, it is shown that capital accumulation or technical progress in agriculture is likely to reduce wage inequal...

Income inequality typically declines with the length of time taken into account for measurement. This note derives an exact analytical relationship between the accounting period and inequality as measured by the Gini index. The relationship is similar to the decomposition of the coefficient of variation. The methodology is illustrated with panel data on urban wages from Mexico. It is found that...

This paper adopts the “Rip Van Winkle” stratagem, of asking what differences would be noticed, in the domain of poverty and distribution, by someone who fell asleep in 1987 (the year I published my paper on poverty in the IMF Staff Papers, and woke up only in 2007 (the year I visited the IMF to work on the present paper). I highlight, somewhat idiosyncratically, ten such differences under three...

Data on 2,355 married women from the 2006 China Health and Nutrition Survey are used to study how female employment affects fertility in China. China has deep concerns with both population size and female employment, so the relationship between the two should be better understood. Causality flows in both directions; hence, we use a plausible instrumental variable to isolate the effect of employ...

This study examines empirically the impact of income polarization on economic growth in an unbalanced panel of more than 70 countries during the 1960–2005 period. We calculate various polarization indices using existing micro-level datasets, as well as datasets reconstructed from grouped data on income distribution taken from the World Income Inequality Database. The results garnered for our pr...

This paper evaluates the impact of access to groundwater on poverty using data from rural India. The estimation exploits the fact that the technology required to access groundwater changes exogenously due to constraints imposed by laws of physics at a depth of eight meters. I find that rural poverty in areas where depth from surface is below the cutoff is 9 to10 percent higher. Using survey dat...

East Asian students regularly take top positions in international league tables of educational performance. Using internationally comparable student-level data, I estimate how family background and schooling policies affect student performance in five high-performing East Asian economies. Family background is a strong predictor of student performance in South Korea and Singapore, while Hong Kon...

This paper develops an endogenous growth model of a dual economy where human capital accumulation is the source of economic growth. The dualism between the rich individuals and the poor individuals exists in the mechanism of human capital accumulation. Rich individuals allocate labour time not only for their own production and knowledge accumulation but also to train the poor individuals. Stead...

We partially identify the average treatment effect of education on earnings and nonparametrically estimate its upper bound for African, Coloured (mixed race) and White males in South Africa. We address endogenous selection into education, cohort effects and endogenous selection into work. Using the September 2007 South African Labour Force Survey, the upper bound estimates are considerably lowe...

The endowment effect, the tendency to value possessions more than non-possessions, is a well-known departure from rational choice and has been replicated in numerous settings. We investigate the universality of the endowment effect, its evolutionary significance, and its dependence on environmental factors. We experimentally test for the endowment effect in an isolated and evolutionarily releva...