Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty,...
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![Page 1: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/1.jpg)
Twin Peaks to Burgeoning Precariat?
The co-evolution of global inequality and global poverty, 1990-2030
Peter Edward and Andy Sumner
![Page 2: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/2.jpg)
Contents
1. Introduction
2. The GrIP model of growth, inequality and poverty
3. Is global inequality really falling?
4. Who benefited from growth since the Cold War?
5. Global poverty, 1990-2030
6. Conclusions
![Page 3: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/3.jpg)
1. Introduction
• What has happened to global inequality & poverty since the Cold War? Major source of contention – benefits of growth, liberalisation since end of Cold War
• Data has got a lot better but still quite questionable. Not only methodological issues – conceptual too. Various concepts of pro-poor/inclusive growth
• Orthodox narrative fragile? Global poverty falling fast; Global inequality (between countries and individuals) falling too; market orientated growth poverty reducing; Policy implications = don’t worry too much about managing growth benefits or national inequality?
![Page 4: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/4.jpg)
2. The GrIP model of growth, inequality and poverty
![Page 5: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/5.jpg)
GrIP v2.0• Growth, Inequality and Poverty GrIP is model of consumption, output and
distribution
• Model built from:– Survey distributions, survey means, PovcalNet, 8 Oct 2014 – HFCE and GDP in 2011 PPP, population headcounts, additional survey distributions, WDI, 17
Oct 2014; HFCE and GDP in 2005 PPP, WDI, 18 Dec 2013– Additional survey distributions, WIID3b, Sept 2014– GDP growth forecasts, IMF World Economic Outlook (WEO), Oct 2014– Population growth forecasts, UNPD World Population Prospects (WPP) 2012 (medium
forecast)
• Conceptual and methodological issues (of many):– Differing concepts of global inequality and poverty– 2005 vs 2011 PPPs (here 2011PPP unless stated)– Consumption/income surveys – Top income adjustment or not– Etc…
![Page 6: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/6.jpg)
3. Is global inequality really falling?
![Page 7: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/7.jpg)
Global Gini, 1990-2012
0.000
0.100
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1990 1995 2000 2005 2010 2015
Between individuals, 2005PPP
Between individuals, 2011PPP
Between countries, 2005PPP
Between countries, 2011PPP
Within countries
![Page 8: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/8.jpg)
But… global Gini exc. China, 1990-2012
0.000
0.100
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0.300
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0.500
0.600
0.700
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1990 1995 2000 2005 2010 2015
Between individuals, 2005PPP
Between individuals, 2011PPP
Between countries, 2005PPP
Between countries, 2011PPP
Within countries
![Page 9: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/9.jpg)
Global density curve, 1990-2012: Twin peak to burgeoning precariat
-0.50
-0.40
-0.30
-0.20
-0.10
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10 100 1,000 10,000 100,000
<= C
on
sum
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Den
sity
Po
pu
lati
on
=>
Income ($ PPP per capita pa) - log scale
1990 2005PPP
2012 2005PPP
1990 2011PPP
2012 2011PPP
$1.25 (2005PPP)
$2.5 (2011PPP)
$10 (2011PPP)
Expansion in consumption in top global decile ($30+ per day)
![Page 10: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/10.jpg)
Global density curve exc. China (again), 1990-2012
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0.00
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10 100 1,000 10,000 100,000
<= C
on
sum
pti
on
Den
sity
Po
pu
lati
on
=>
Income ($ PPP per capita pa) - log scale
1990 2005PPP
2012 2005PPP
1990 2011PPP
2012 2011PPP
$1.25 (2005PPP)
$2.5 (2011PPP)
$10 (2011PPP)
![Page 11: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/11.jpg)
4. Who benefited from growth since the Cold War?
![Page 12: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/12.jpg)
Absolute benefits by fractile (2011PPPs push crossover point left ward)
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0 10 20 30 40 50 60 70 80 90 100
Ch
ange
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PP
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a
Fractile location (%)
1990 to 2012 Global average 1990-2012 (2005PPP)
![Page 13: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/13.jpg)
Relative benefits by fractile(2011PPP ‘lifts’ poorest 60%)
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Fractile location (%)
1990 to 2012 1990 to 2000 2000 to 2012 Global average 1990-2012 (2005PPP)
![Page 14: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/14.jpg)
Regional and national variation important for policy/politics
• Regional and national patterns suggest benefits of growth can be managed or growth governed differently
• So, a low tech quiz…
![Page 15: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/15.jpg)
Guess the growth incidence curve, 1990-2012
Which region? Which country?
![Page 16: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/16.jpg)
Stylized growth incidence curve, 1990-2012
Which region?
Which country?
See literature on varieties of (late) capitalism; welfare regimes; etc.
![Page 17: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/17.jpg)
5. Global Poverty, 1990-2030
![Page 18: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/18.jpg)
What consumption level?
• Every dime under $2.50 adds 100m people so…• $1.25 rejigged to $1.90 & fall in poverty due to rejig • Multi-dimensional poverty double $1.90 and close to
$2.50 level (1.7bn)• $4 = developing world median• $10 = security from poverty & poorest OECD decile
![Page 19: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/19.jpg)
2012: 2005 PPP vs 2011 PPP
0.00
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50 500 5,000
Pop
ula
tio
n D
ensi
ty =
>
Income ($ PPP per capita pa) - log scale
2012 2005PPP
2012 2011PPP
$1.25 (2005PPP)
$2.5 (2011PPP)
$10 (2011PPP)
![Page 20: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/20.jpg)
Global poverty (2012-IMF WEO – 1% & historic distribution trend)
0
1,000
2,000
3,000
4,000
5,000
6,000
1990 1995 2000 2005 2010 2015 2020 2025 2030
He
adco
un
t b
elo
w P
ove
rty
Lin
e (
mil
lio
ns)
Year
$10 (2011PPP)
$2.5 (2011PPP)
$2 (2011PPP)
$1.78 (2011PPP)
$1.25 (2005PPP)
![Page 21: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/21.jpg)
Global poverty exc. China
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1990 1995 2000 2005 2010 2015 2020 2025 2030
He
adco
un
t b
elo
w P
ove
rty
Lin
e (
mil
lio
ns)
Year
$10 (2011PPP)
$2.5 (2011PPP)
$2 (2011PPP)
$1.78 (2011PPP)
$1.25 (2005PPP)
![Page 22: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/22.jpg)
But… how much difference might inequality and growth make?
0
1,000
2,000
3,000
4,000
5,000
6,000
1990 1995 2000 2005 2010 2015 2020 2025 2030
He
adco
un
t b
elo
w P
ove
rty
Lin
e (
mil
lio
ns)
Year
Pessimistic growth, extrapolated inequality trend
Moderate growth, extrapolated inequality trend
Optimistic growth, extrapolated inequality trend
Moderate growth, best historic inequality trend
Optimistic growth, best historic inequality trend
![Page 23: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/23.jpg)
Kuznets revenge? Growth & structural change accompanied by rising net Gini where much of global poor live thus future growth less pro-
poor
China Indonesia Bangladesh India Pakistan 0
10
20
30
40
50
60
1990-5 2010-12
Data: Solt (2014)
![Page 24: Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty, 1990-2030 Peter Edward and Andy Sumner.](https://reader036.fdocuments.us/reader036/viewer/2022062519/5697bfc51a28abf838ca6c38/html5/thumbnails/24.jpg)
6. Conclusions
a) Poverty > precarity & twin peaks to burgeoning precariat of 3.2bn (half global popn & half of popn in most MICs)
b) Much heralded fall in global inequality barely visible when China exc. (or top income adj) & national inequality flat overall but rising where world’s poor conc.
c) Growth benefits vary drastically so role of policy in governance of growth – varieties of late capitalism; welfare regimes.
d) Considerable uncertainty about future level and location of poverty
e) The orthodox narrative for post 1990 looks fragile?