Essays in Honor of Keith B. Griffin
Edited by James K. Boyce, Stephen Cullenberg, Prasanta K. Pattanaik and Robert Pollin
Chapter 14: The Structure and Distribution of Personal Income and Poverty Reduction: A Case Study of Bangladesh During the 1990s
Azizur Rahman Khan and Binayak Sen1 INTRODUCTION Despite its moderate growth performance, Bangladesh has experienced major changes in the structure of employment and income in the recent past, especially in rural areas where most of the people live. The inequality in the distribution of income has also steadily increased. The purpose of this chapter is to use the household-level data from the three surveys during the 1990s – the Household Expenditure Surveys (HES) of 1991–92 and 1995–96 and the Household Income and Expenditure Survey (HIES) of 2000, all carried out by the Bangladesh Bureau of Statistics (BBS) – to make comparable estimates of personal income for rural and urban Bangladesh, including its source, and to estimate the indices of inequality in the distribution of personal income, along with that of its sources. The study illustrates the nature and the sources of rising inequality that has often characterized the growth and structural change of developing countries in recent decades. It also shows the effect that a change in income distribution makes on the impact of economic growth on poverty reduction. STRUCTURE AND COMPOSITION OF INCOME Income is classified into six major sources while certain elements, not belonging to any of the six sources, are lumped together in a residual category of ‘other income’. These sources of income are as follows: 1. Income from farming (return to farm enterprise, owned land, family labour and other owned assets); 301 302 Strategies for reducing poverty and inequality 2. wages and salaries (further classified into...
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