Poverty and income inequality

Longfeng Ye, Peter E. Robertson, 01 February 2016

The World Bank has identified 37 countries as being in a ‘middle-income trap’, but few formal tests of the middle-income trap hypothesis exist. This column presents a new test based on a more nuanced observation that incorporates information on a country’s long-run growth path. Only seven out of 46 middle-income countries are found to be potentially ‘trapped’. Some countries that are usually considered to be trapped may just be growing very slowly.

Resul Cesur, Pınar Mine Güneş, Erdal Tekin, Aydogan Ulker, 18 January 2016

The goal of universal health coverage has been pursued by countries in a number of ways, most notably through demand-side policies. In 2005, Turkey extended basic healthcare services to its entire population under a free-of-charge, centrally administered system. This column examines the impact of this supply-side programme on mortality and birth rates. Results show that the program was successful in lowering both mortality and birth rates across provinces, particularly for the most vulnerable populations. These findings provide compelling evidence in favour of providing accessible healthcare services to all citizens.

Sneha Elango, Jorge Luis García, James J. Heckman, Andrés Hojman, 12 January 2016

Adverse early childhood environments can have persistent effects. This column suggests that early childhood programmes have many beneficial effects, and their success should be evaluated on a multitude of outcomes. The returns to investing in the early lives of disadvantaged children in terms of social mobility and economic productivity are high – comparable to returns on equity investment.

Martin Ravallion, 23 December 2015

With the new UN Global Goals agreed this autumn, the issue of poverty is at the top of global agenda. This column presents a new book that reviews past and present debates on poverty in both rich and poor countries. The challenges ahead are in assuring the political will and administrative capabilities to implement and enforce sound anti-poverty policies, and in adapting them to differing circumstances and evolving knowledge about their efficacy.

Mariacristina De Nardi, Giulio Fella, Fang Yang, 22 December 2015

Thomas Piketty’s "Capital in the Twenty-First Century" quantified the evolution of wealth inequality and concentration over time and across a number of countries. This column examines existing macroeconomic models of wealth inequality through the lenses of the facts and ideas in Piketty’s book. It further examines the importance of the mechanism that Piketty champions – post-tax rate of return on capital. Gaps in existing knowledge and directions for future research are identified. 

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