Economic mobility at the BPL horizon

An article in Mint cites data that shows that in certain communities in Rajasthan a net 3% reduction in poverty came from 11% who escaped poverty and 8% new ones who entered poverty.  And among 36 communities in Andhra, 14% of families exited poverty and 12% entered it, showing a net 2% reduction.

It asks:

“Consider a hypothetical example in which the national stock of poverty, 32% in 2000 fell to 24% by 2010. How did this 8 percentage points reduction actually come about? Should we be gladdened or disheartened by this occurrence? The answer depends upon the underlying flows: Did (A) 8% of the population escape poverty, and no one fell into poverty (which is terrific); or (B) did 16% escape poverty, while 8% concurrently became poor; or (C) causing most despair, did 24% escape poverty and 16%fall into poverty.”

Interesting thoughts to ponder: Mint article (read here).

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