Understanding Poverty Reduction in Sri Lanka : Evidence from 2002 to 2012/13

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,...

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Bibliographic Details
Main Authors:	Ceriani, Lidia, Inchauste, Gabriela, Olivieri, Sergio
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	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
Online Access:	http://documents.worldbank.org/curated/en/2015/10/25167646/understanding-poverty-reduction-sri-lanka-evidence-2002-201213 http://hdl.handle.net/10986/22877

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Summary:	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.

Understanding Poverty Reduction in Sri Lanka : Evidence from 2002 to 2012/13

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