This paper looks at the relationship between growth and the poorest based on a panel data set – where the same household is surveyed at more than one point in time. A major advantage of this approach is the ability to observe household mobility over time, so capturing upward and downward movements in measures of wellbeing. This mobility is not captured by growth incidence curves, which compare households in a given percentile group with those in the same percentile group in a later period. Panel data also enable the identification of the chronic poor – those poor at more than one point in time, so enabling a focus on a different and perhaps more intuitive concept of the poorest, those whose poverty is persistent.
This paper examines the extent to which the poorest are able to participate in growth using a panel data set of more than 1000 households covering the 1990s, and looking at income and non-income measures of wellbeing. In brief the results suggest considerable mobility over time in terms of income measures of wellbeing, but somewhat less in terms of the nonincome measures considered here. Thus the income GICs (which still show quite fast growth for the poorest decile over this period) do not given the full picture about the relationship between growth and the poorest; but the non-income GICs capture this somewhat better.
Many of the poorest households in 1992 in fact raised their income (strictly consumption) levels substantially over this period, sufficient in many cases to enable them to have escaped poverty completely by 1999; at the same time though quite a few non-poor households in 1992 fell into poverty by the end of the decade. The chronic poor – those poor in growth periods – experienced quite fast growth in their incomes over this period, at comparable rates to those that were never poor; and the same applies for the chronic poor defined relative to a lower, extreme poverty line. In short, over a period of rapid growth in Uganda, the poorest participated substantially in this, may of them achieving significant improvements in income and non-income dimensions of wellbeing.
Background Paper for the Chronic Poverty Report 2008-09. Chronic Poverty Research Centre, London, UK, 16 pp.