Non-anonymous growth incidence curves, income mobility and social welfare dominance |
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Authors: | Fran?ois Bourguignon |
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Institution: | (1) Department of Economics, University of Western Ontario, London, Ontario, N6A 5C2, Canada;(2) Faculty of Economics and Politics, University of Cambridge, Cambridge, CB3 9DD, UK |
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Abstract: | The distributional incidence of growth is generally analyzed by comparing the quantiles of the pre- and post-growth income
distribution—e.g. the so-called Growth Incidence Curves. Such an approach based on an implicit re-ranking of individual incomes
ignores income mobility by assuming that only post-growth income matters in social welfare. By contrast, this paper takes
the view that “status quo matters” and that social welfare should logically be defined on both inital and terminal income.
This leads to consider ’non-anonymous’ Growth Incidence Curves that plot income growth rates against the various quantiles
of the initial distribution. Dominance criteria that generalize those available for standard growth incidence curves are derived, which
account for the inequality of individual income changes, conditional on initial income. An application to the cross-country
distributional feature of global growth illustrates the analysis. |
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Keywords: | |
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