Shared Prosperity: Concepts, Data, and Some Policy Examples

Abstract

“Shared prosperity” is a common phrase in current development policy discourse. Its most widely used operational definition—the growth rate in the average income of the poorest 40% of a country’s population—is a truncated measure of change in social welfare. A related concept, the shared prosperity premium—the difference between the growth rate of the mean for the bottom 40% and the growth rate in the overall mean—is similarly analogous to a measure of change in inequality. This article reviews the relationship between these concepts and the more established ideas of social welfare, poverty, inequality, and mobility.</p>

Household survey data can be used to shed light on recent progress in terms of this indicator globally. During 2008–2013, mean incomes for the poorest 40% rose in 60 of the 83 countries for which we have data. In 49 of them, accounting for 65% of the sampled population, it rose <italic>faster</italic> than overall average incomes, thus narrowing the income gap.

In the policy space, there are examples both of “pre-distribution” policies (which promote human capital investment among the poor) and “re-distribution” policies (such as targeted safety nets), which when well-designed have a sound empirical track record of both raising productivity and improving well-being among the poor.

Document type: Book

Original document

The different versions of the original document can be found in:

• http://dx.doi.org/10.1093/acrefore/9780190625979.013.445

• http://dx.doi.org/10.1596/1813-9450-8451

• http://hdl.handle.net/10419/180589

• http://hdl.handle.net/10986/29861 under the license http://creativecommons.org/licenses/by/3.0/igo

• http://pdfs.semanticscholar.org/7295/585a46eb235c544d68dd084fce8607707288.pdf

DOIS: 10.1093/acrefore/9780190625979.013.445 10.1596/1813-9450-8451