Pro-poor Growth or Poverty Trap? : Estimating Intergenerational Income Mobility in Rural Philippines

Discussion Papers


by TAKAHASHI Kazushi

February 2013


Using an intergenerational database covering nearly a quarter of a century, we explored the degree of intergenerational income mobility among individuals who had grown up in rural Central Luzon, the Philippines. We found that the intergenerational income elasticity is significantly lower than unity, at roughly 0.23, indicating that the average income growth rate is higher for children born to poorer families. The detailed analysis, however, revealed that its magnitude significantly varies across percentiles in a U-shape. The results provide supporting evidence of multiple equilibria or poverty trap.

Keywords: Rural Poverty, Economic Mobility, the Philippines
JEL classification: D31, I30, O12

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