Chor-ching Goh

Estimating Individual Vulnerability to Poverty with Pseudo-Panel Data

This paper presents an original method to study individual earning dynamics using repeated cross-sectional data. Because panel data of individuals are seldom available in developing countries, it is difficult to study individual earning dynamics and related issues such as the propensity of earners to fall into poverty or vulnerability to poverty because of changes in earning. This paper shows that under the assumption that individual earning dynamics obey some basic properties and follow a simple stochastic process, the main parameters of this process can be recovered from repeated cross sectional data. The knowledge of these parameters then permits simulation of the earning dynamics of an individual, and estimate other measures of interest, such as an individuals vulnerability to poverty. The results show that model parameters recovered from pseudo-panels approximate reasonably well those estimated directly from a true panel. Moreover, implications of the model, in this case pseudo-panel measures of vulnerability to poverty, reflect closely those based on actual panel data.

Market Integration in China

Over the last three decades, Chinas product, labor, and capital markets have become gradually more integrated within its borders, although integration has been significantly slower for capital markets. There remains a significant urban-rural divide, and Chinese cities tend to be under-sized by international standards. China has also integrated globally, initially through the Special Economic Zones on the coast as launching grounds to connect with world markets, and subsequently through the accession to the World Trade Organization. For future policy considerations, this paper argues that its economic production needs to be spatially concentrated, and its social services need to be spread out to the interior to ensure harmonious development and domestic integration (through inclusive rural-urban transformations and effective territorial development).