Two Decades of Rising Inequality and Declining Poverty in the Lao People's Democratic Republic

40 Pages Posted: 30 Dec 2015

See all articles by Peter G. Warr

Peter G. Warr

Australian National University (ANU) - Crawford School of Public Policy

Sitthiroth Rasphone

National Economic Research Institute

Jayant Menon

Asian Development Bank; Asian Development Bank Institute

Date Written: November 2015

Abstract

Over the last 2 decades the distribution of private household expenditures has become more unequal in the Lao People’s Democratic Republic, with the Gini coefficient rising from 0.311 to 0.364, even though absolute poverty incidence has halved. The increase in inequality was statistically significant and reduced the average rate of poverty reduction per year by about 28%, meaning the actual rate compared with the counterfactual rate that would have occurred if the mean real expenditures had increased at their observed levels but inequality had not changed. When the data are decomposed into rural and urban areas of residence or by province, or by the ethnicity of the household head, the increase in inequality within groups dominates any changes between groups; inequality has increased throughout the country. In contrast, access to publicly provided services has become more equal; disparities in participation rates between richer and poorer groups have diminished.

Keywords: expenditure inequality, Gini coefficient, Lao PDR, poverty reduction

JEL Classification: D31, D39, I39

Suggested Citation

Warr, Peter G. and Rasphone, Sitthiroth and Menon, Jayant, Two Decades of Rising Inequality and Declining Poverty in the Lao People's Democratic Republic (November 2015). Asian Development Bank Economics Working Paper Series No. 461, Available at SSRN: https://ssrn.com/abstract=2709320 or http://dx.doi.org/10.2139/ssrn.2709320

Peter G. Warr

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Sitthiroth Rasphone

National Economic Research Institute ( email )

Beijing
China

Jayant Menon (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F 3-2-5
Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
34
Abstract Views
455
PlumX Metrics