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HIDDEN DIMENSIONS OF EQUITY AND POVERTY REDUCTION:
THE TASKS AHEAD
ANIRUDH KRISHNADUKE UNIVERSITY
Presented at the Second India Conference
INSTITUTE FOR INTERNATIONAL ECONOMIC POLICYGEORGE WASHINGTON UNIVERSITY
OCTOBER 5, 2016
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Source: Krishna (2016), with data from Credit Suisse Global Wealth Report 2013
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• Wide range of lifestyles and aspirations
• Policy stretch
• Compressed development
KEY EQUITY OBJECTIVE:How to take more people from the left side to the right side (of the streamgraph)
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THREE CRITICAL (BUT MOSTLY HIDDEN) TASKS
• VULNERABILITY: falling into poverty
• SOCIAL MOBILITY: very low (among the lowest)
• POVERTY IN URBAN CONTEXTS: increasing, but poorly understood
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THE FIRST TASK: VULNERABILITY
LOCATION
Escaped Poverty
(A)
Became Poor(B)
Net change(A minus B)
Rajasthan(6,376 households, 1975-2002)
11% 8% 3%
Gujarat(5,817 households, 1976-2003)
9% 6% 3%
Andhra Pradesh(5,536 households, 1976-2003)
14% 12% 2%
Orissa(800 households)
11% 12% -1%
All-India (3,139 households, 1970-82)
23% 13% 10%
All-India (3,239 households, 1981-99)
18% 20% -2%
All-India (13,593 households, 1993-2005)
18% 22% -4%
Poverty Flows (% of all households)
Sources: Top to bottom – Krishna (2004); Krishna, et al. (2005); Krishna (2006); Hatlebakk(2014); Bhide and Mehta (2004); Dhamija and Bhide (2009); Krishna and Shariff (2011)
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MAJOR REASONS FOR DESCENT
• Illnesses, accidents, and high health care costs
(3-5% of the population, every year)
• Marriages, dowries, and funeral feasts
• Crop failures
• High-interest private debts
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LARGE LOCAL VARIATION
Two villages in Andhra Pradesh (1976-2003)
…Poverty and its reasons vary locally
VILLAGE
Percentage of Households whoReduction in the stock of
poverty (percent)
Remained Poor
Escaped Poverty
Became Poor
Remained Non-poor
Sultanpurthanda 23.6 49.4 3.4 23.6 46.1
Bhojathanda55.6 1.0 40.4 3.0 -39.4
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SECOND TASK: SOCIAL MOBILITY
POSITION NUMBERAccountant 3Computer operator 7Constable 26Clerk typist 12Civil Engineer 2Doctor 2Driver 8Lineman (electricity) 8Messenger (peon) 9Panchayat secretary 6Records keeper (patwari) 11Sub-inspector (police) 6Schoolteacher 67Soldier (jawaan) 41Software Engineer 2 Source: Krishna (2010)
HIGHEST POSITIONS ACHIEVED Ten years (1995-2005), 105 villages, three states
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COUNTERPART RESULTENTRANTS TO ENGINEERING COLLEGES, BUSINESS SCHOOLS, AND CIVIL SERVICES
< 10% educated in rural schools (comp. 55%)
> 80% from English-medium schools (comp. 15%)
< 10% from asset-poor households (bicycle/radio)
> 90% of fathers with college and mothers with high school education (comp. 4-7%)
> 80 % of fathers: government officials, executives, or businessmen
HIGH DEGREE OF EXCLUSION FROM OPPORTUNITY
Krishna (forthcoming). Also: Bardhan (2010); Clark (2014); World Bank (2013)
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LOW INDIVIDUAL ACHIEVEMENTS LOW AGGREGATE OUTCOME
SAME STORY• Patent applications • Research papers published• New businesses registered
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WHY DO SO MANY INDIVIDUALS ACHIEVE SO LITTLE?
3 Main Factors
• Quality of education
• Information, guidance, motivation
• Role models
PROMISING SMALL-SCALE EFFORTS: Prerana, Vidyaposhak, Super 30, Dream a Dream, Make a Difference, Aspiring Minds, Bharat Calling, Mentor Together, Lead Trust,…others
VICIOUS CYCLE
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THIRD TASK: URBAN POVERTY
• GROWING FAST
• POORLY UNDERSTOOD
o SLUMS: superficial knowledge
o SHORT-TERM ECONOMIC MIGRANTS: one-third (?) of all city residents
o CONTEXTS OF RAPID CHANGE – in both directions
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TYPE 1A: DECLARED - REHABILITATED
Ragigudda- JP NAGAR
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TYPE 1B: DECLARED - NOT DEVELOPED
Muniyappa Cement Compound
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TYPE 2A: DECLARED - PRIVATE LAND - NOT DEVELOPED
New Binnamangala
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TYPE 2B: DECLARED - NOT DEVELOPED (LITIGATION)
Hombegowda
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TYPE 3A: UNDECLARED
Ashrayanagar
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TYPE 4: NEW MIGRANT (BLUE POLYGON)
Kachakaranahalli
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TYPES OF SLUMS: continuum of well-being
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Quadrant II - Atturu (2005 – 2010)
RAPID CHANGE (1)
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2009
RAPID CHANGE (2): Manjunath
2013
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RAPID CHANGE (3)
GD Mara 2003 2006 2013
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OTHER TAKEAWAYS (URBAN POVERTY)
• Faint correlation with official status (notification)
• Few indications of secular improvement (thresholds)
• Low social mobility (other thresholds)- four generations, but almost no engineering or medical students
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EQUITY AND POVERTY REDUCTION IN THE FUTURE
• STORIES and PHOTO-ESSAYS: www.urbanindiastories.com
• ARTICLES and PAPERS: sites.duke.edu/krishna
1. BETTER METHODS, BETTER DATA
2. VULNERABILITY: Health care + local threats/opportunities
3. UPWARD MOBILITY: Career information + role models
4. URBAN POVERTY: new frontier (methods: satellite images)
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THE BIG PICTURERecord of high national growth, with:
1. Enduring poverty> 60 percent below $2/day> 75 percent: poor, near-poor, or vulnerable
2. High vulnerability3-5% fall into poverty
3. Low social mobilitySmall global middle class:
Cars: < 4%Credit cards: < 4%Internet at home < 3% Travel abroad < 2% Stocks and bonds < 2%
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RAPID CHANGE 1
Srinivasa Colony 2008 Srinivasa Colony 2009