From: Matt Berkley@aol.com
Sent: 08 October 2000
Subject: Re: Dollar and
Thanks for the
I've found another one, from the Center for Economic Policy and
Research in Washington - released on Monday.
It mentions the possibility
that the poorest dying off can make the figures look better. This still seems
plausible to me, but more plausible is that the figures look better if
non-productive people die.
I wonder what you think of the
On the first point, if deaths of the poorest households turn
out not have a statistically significant effect on the income figure for the
poorest quintile, why is this? I would have thought for the same reason that the
average income in the quintile isn't far from the top income: if you're very far
below the top you drop out of the figures, because the consumption level isn't
enough to sustain life.
On the second point, It looks to me as though the
biggest influence on per capita income figures is the proportion of
non-productive members of households - largely children. One reason why per
capita income figures go up can be that fertility rates have gone down (this
might be due to growth among the poor, national growth, or something else). Per
capita incomes in China have gone up - there aren't many children.
simple model, let's say children don't generate income and adults each generate
$2. If you have 50 children and 50 adults, per capita income is $1. If you have
48 children and 52 adults, it's $1.04.
If we make this into a model of
the bottom quintile, I think what happens is this: for each 2 children who die,
their places are taken at the top of the quintile by 1 adult and 1 child. You
end up with 49 children and 51 adults: $1.02 per person. 4% of existing children
die and you get a 2% rise in per capita income. For each percentage change in
child death rates you get half a percentage point change in per capita
Survival rates of under-fives can be only 75% in a vulnerable
group. A 1% variation around this figure would make a significant difference to
the growth figures - if 0.5% of per capita income is attributable to higher
child deaths than in another country or at another time, this is a serious
problem for the idea that growth is good for the poor.
In fact, to end
up with 1% of existing children dying (the ones who've survived till now), you
would only need to see a smaller increase in the total child mortality rate (all
those who were born, including those who've already died).
obviously other factors: for example, over time, the poorest people may produce
more children replacing the dead ones.
It would seem sensible to compare
countries' national and bottom-quintile growth rates along with 1) fertility
rates; 2) ratios of productive to non-productive members of households; and 3)
death rates among non-productive members of households (under-fives would be a
In practice there are more children than adults - so many
that more than 50% of all deaths in the global poorest quintile are of people
under 15, even though the death rate for people in this age group is 21% *. A
small percentage increase in their death rate results in a large number of
I do wonder how in a situation where a high numbers of
children die, there could be more debate about the effects of growth on
fertility rates and survival rather than on tiny changes in income.
Davidson R. Gwatkin and Michel Guillot, The Burden of Disease Among the Global