INCOME MOBILITY

Income Mobility

Income Mobility

Introduction

In a country like Great Britain, where over 30% of the population lives in poverty (and within these 17% live in extreme poverty), reducing it, became a major national goals. In fact, during the last decade has been evident recognition by the Peruvian government's poverty reduction national priority. Social spending per capita from 76 pounds in 1992 to 321 in 1997, an increase of about 300%, on which is interesting to note that spending programs focused on poverty reduction followed a similar trend (reaching 44.6% of social expenditure in the year 95, to resume in the following years about 25% of social spending). Moreover, by 1995 the government was drawn of reducing extreme poverty by half 5 (from 19% to 9.5% of the population). To all recovery, starting in 93 of the path of economic growth, reporting GDP growth rate of 4.2% on average (geometric) per annum during the period of 1991-1999. The results in terms of effectively reducing the poverty rate that will occur during this period, however, were not very encouraging. According to Moncada (1996) the poverty rate in 1991 was close to 55%, while estimates for 1997 show revenues about 49%. Also, find an extreme poverty from 24% in 1991 and the INEI report for 1997 is about 16%. This has been reworked design strategies, implementation and evaluation of programs to combat poverty and the reasons behind the entry and exit poverty by families Great Britain. The latest income-mobility data reflect European incomes in 2006, the year before the start of a global economic crisis (which triggered a recession in the U.K. in December 2007). Experts say that data from 2007 and beyond will likely reflect that reality.

One of the main instruments used, both by public institutions as NGOs, for the design and evaluation of the effectiveness programs to combat poverty have been the National Household Survey (ENAHO) Institute National Statistics and Informatics - INEI, and Measurement Survey Life Stories (LSMS) conducted by the Institute much. The analysis of these surveys has in the identification and characterization of the groups in poverty, from a perspective static, directing particular attention to issues associated with targeting social spending (both at design and implementation). However, the instruments which may result from a static analysis of the population in require complemented by a dynamic analysis that allows approximate and of causality. The survey analysis indicates the household is poor (or not) in period and the amount of income it takes to overcome the poverty line, but does not specify what mix of assets required for a lasting exit from it.

Literature Review

Income mobility is defined as an exogenous rate at which individuals change from a low to a high income path. In this framework, the optimal allocations of consumption and leisure are not constant over the life cycle even when preferences are additively separable. Income mobility and borrowing limits are additional reasons why the leisure and consumption profiles increase over the life cycle and reinforce the role of age-dependent ...