Understanding Poverty Reduction in Sri Lanka

Ceriani, Lidia; Inchauste, Gabriela; Olivieri, Sergio

Understanding Poverty Reduction in Sri Lanka

Autores

Ceriani, Lidia

Inchauste, Gabriela

Olivieri, Sergio

Editor

World Bank, Washington, DC

Descripción

This paper quantifies the contributions to poverty reduction observed in Sri Lanka between 2002 and 2012/13. The methods adopted for the analysis generate entire counterfactual distributions to account for the contributions of demographics, labor, and non-labor incomes in explaining poverty reduction. The findings show that the most important contributor to poverty reduction was growth in labor income, stemming from an increase in the returns to salaried nonfarm workers and higher returns to self-employed farm workers. Although some of this increase in earnings may point to improvements in productivity, defined as higher units of output per worker, some of it may simply reflect increases in food and commodity prices, which have increased the marginal revenue product of labor. To the extent that there have been no increases in the volumes being produced, the observed changes in poverty are vulnerable to reversals if commodity prices were to decline significantly. Finally, although private transfers (domestic and foreign) helped to reduce poverty over the period, public transfers were not as effective. In particular, the reduction in the real value of transfers of the Samurdhi program during 2002 to 2012/13 slowed down poverty reduction.

Palabras clave

AVERAGING, AGRICULTURAL SELF-EMPLOYMENT, TAXES, INCOME DISTRIBUTION, RENT, WELFARE, PRODUCTIVITY INCREASES, EQUATIONS, POVERTY RATE, MEASURES, WAGE RATES, OUTCOMES, POOR, MARGINAL REVENUE, POVERTY, SAVINGS, CONSUMPTION EXPENDITURES, PURCHASING POWER, POVERTY LINES, FINANCIAL CRISIS, EMPLOYMENT INCOME, POVERTY LINE, CONSUMPTION DATA, INEQUALITY, GDP, HOUSEHOLD CONSUMPTION PER CAPITA, POVERTY ASSESSMENT, VALUE OF OUTPUT, FARM ACTIVITIES, CASH TRANSFERS, FARM INCOMES, HOUSEHOLD HEADS, CENTRAL BANK, CONSUMPTION PER CAPITA, POVERTY REDUCTION, THEORY, DAILY WAGE, PRIVATE TRANSFERS, REGIONS, DECOMPOSITION METHODOLOGY, HOUSING, INCOME GROWTH, ECONOMIC GROWTH, FARM INCOME GROWTH, POVERTY INDICES, ENDOGENOUS VARIABLES, UTILITY, GROWTH RATE, NET INCOME, DISTRIBUTION, MEASUREMENT, DEVELOPMENT POLICY, DECLINE IN POVERTY, TRANSFERS, EMPLOYMENT SOURCE, SELF-EMPLOYMENT, NATIONAL POVERTY, HOUSEHOLD CONSUMPTION, HOUSEHOLD SIZE, POVERTY RATES, TOTAL POVERTY, DURABLE GOODS, HUMAN CAPITAL, VARIABLES, POVERTY DYNAMICS, IMPACT ON POVERTY, BASE YEAR, LOTTERY, VALUE ADDED, CASH RECEIPTS, HOUSEHOLD INCOME, HOUSEHOLD INCOMES, EMPLOYMENT STATUS, REDUCTION IN POVERTY, DIVIDENDS, INCOME TAXES, HOUSEHOLD HEAD, PER CAPITA CONSUMPTION, COUNTERFACTUAL, CHOICE, FOOD PRICE, INSURANCE, CHANGES IN POVERTY, POVERTY GAP, ECONOMIC EQUILIBRIUM, RURAL, GOODS, CONSUMPTION AGGREGATE, REVENUE, ECONOMIC INEQUALITY, FOOD CONSUMPTION, WAGE DIFFERENTIALS, POVERTY INDICATOR, TRANSFERS IN KIND, AGRICULTURAL WORKERS, FARM SECTOR, FARM WORKERS, INTERNATIONAL POVERTY LINES, INDEX NUMBERS, POVERTY LEVEL, POVERTY INDICATORS, WAGE DISCRIMINATION, POLITICAL ECONOMY, FARM WORK, REGIONAL VARIATIONS, WAGE PREMIUM, FARM INCOME, DEVELOPMENT ECONOMICS, FARM HOUSEHOLDS, FOOD PRICES, REGION, CONFLICT, INCOME, DOMESTIC LABOR, HOUSEHOLD WELFARE, INTERNATIONAL POVERTY LINE, FARMERS, INVENTORY, AGRICULTURE, TARGETING, PRODUCTIVITY, BUDGET CONSTRAINTS, PRICES, NATIONAL POVERTY LINE, VALUE, INCOME GENERATION, ACCESS TO FACILITIES, FOOD CONSUMPTION DATA, POVERTY MEASURES, PRICE INCREASES, CONSUMPTION, WAGES, TRADE, PER CAPITA INCOME, CONSUMER PRICE INDEX, EXOGENOUS VARIABLES