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Transfer payments --- Income maintenance programs --- Income distribution --- Demographic surveys

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Income distribution --- United States.

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As the financial crisis has spread through the world, the lack of real-time data has made it difficult to track its impact in developing countries. This paper uses a micro-simulation approach to assess the poverty and distributional effects of the crisis in the Philippines. The authors find increases in both the level and the depth of aggregate poverty. Income shocks are relatively large in the middle part of the income distribution. They also find that characteristics of people who become poor because of the crisis are different from those of both chronically poor people and the general population. The findings can be useful for policy makers wishing to identify leading monitoring indicators to track the impact of macroeconomic shocks and to design policies that protect vulnerable groups.

Achieving Shared Growth --- Chronically poor --- Distributional effects --- Economic growth --- Economic Theory & Research --- Food price --- Impact on poverty --- Incidence of poverty --- Income --- Income distribution --- Income inequality --- Income poverty --- Inequality --- Labor Policies --- Macroeconomic shocks --- Macroeconomics and Economic Growth --- Poor --- Poor people --- Poverty rates --- Poverty Reduction --- Regional Economic Development --- Rural --- Rural poverty --- Rural poverty rate --- Rural Poverty Reduction --- Social Protections and Labor --- Unemployment

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Measuring the poverty and distributional impact of the global crisis for developing countries is not easy, given the multiple channels of impact and the limited availability of real-time data. Commonly-used approaches are of limited use in addressing questions like who are being affected by the crisis and by how much, and who are vulnerable to falling into poverty if the crisis deepens? This paper develops a simple micro-simulation method, modifying models from existing economic literature, to measure the poverty and distributional impact of macroeconomic shocks by linking macro projections with pre-crisis household data. The approach is then applied to Bangladesh to assess the potential impact of the slowdown on poverty and income distribution across different groups and regions. A validation exercise using past data from Bangladesh finds that the model generates projections that compare well with actual estimates from household data. The results can inform the design of crisis monitoring tools and policies in Bangladesh, and also illustrate the kind of analysis that is possible in other developing countries with similar data availability.

Achieving Shared Growth --- Counterfactual --- Distributional effects --- Economic Theory & Research --- Employment status --- Global markets --- Household heads --- Household income --- Household survey --- Impact on poverty --- Income --- Income distribution --- Income poverty --- Inequality --- Macroeconomic shocks --- Macroeconomics and Economic Growth --- Poor --- Poor rural households --- Poverty line --- Poverty rates --- Poverty Reduction --- Regional Economic Development --- Rural --- Rural areas --- Rural Poverty Reduction