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FGT Old-Age Poverty Measures and the Mortality Paradox : Theory and Evidence

Author

Listed:
  • Mathieu Lefebvre

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Pierre Pestieau

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPR - Center for Economic Policy Research)

  • Grégory Ponthière

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

Abstract

Income-differentiated mortality, by reducing the share of poor persons in the population, leads to the "Mortality Paradox": the worse the survival conditions of the poor are, the lower is the measured poverty. We show that FGT measures (Foster et al., 1984) are, in general, not robust to variations in survival conditions. Then, following Kanbur and Mukherjee (2007), we propose to adjust FGT poverty measures by extending the income profiles of the prematurely dead, and we identify the condition under which so-adjusted FGT measures are robust to mortality changes. Finally, we show, on the basis of data from 2007 on old-age poverty in 11 European economies, that the effect of extending income profiles of the prematurely dead on poverty measurement varies with : (1) the fictitious income assigned to the prematurely dead ; (2) the degree of poverty aversion; (3) the shape of the (unadjusted) income distribution; and (4) the strength of the income/mortality relationship.

Suggested Citation

  • Mathieu Lefebvre & Pierre Pestieau & Grégory Ponthière, 2018. "FGT Old-Age Poverty Measures and the Mortality Paradox : Theory and Evidence," PSE-Ecole d'économie de Paris (Postprint) halshs-01630662, HAL.
    • Handle: RePEc:hal:pseptp:halshs-01630662
    DOI: 10.1111/roiw.12277
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    Cited by:

    1. Mathieu Lefebvre & Pierre Pestieau & Gregory Ponthiere, 2023. "Counting the missing poor in pre-industrial societies," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 17(1), pages 155-183, January.
    2. Renaud Bourlès & Santiago López-Cantor, 2024. "Pension’s Resource-Time Trade-off: The Role of Inequalities in the Design of Retirement Schemes," AMSE Working Papers 2420, Aix-Marseille School of Economics, France.
    3. Mathieu Lefèbvre & Pierre Pestieau & Gregory Ponthiere, 2019. "Premature mortality and poverty measurement in an OLG economy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(2), pages 621-664, April.
    4. Lefebvre, Mathieu & Pestieau, Pierre & Ponthiere, Gregory, 2019. "Missing poor and income mobility," Journal of Comparative Economics, Elsevier, vol. 47(2), pages 330-366.
    5. Koen Caminada & Kees Goudswaard & Qingqi Liu & Chen Wang & Jinxian Wang, 2024. "Determinants of Elderly Poverty in 21 European Countries, 1995-2022," LIS Working papers 882, LIS Cross-National Data Center in Luxembourg.
    6. Philippe Jacques & Marie-Louise Leroux & Dalibor Stevanovic, 2021. "Poverty among the elderly: the role of public pension systems," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(1), pages 24-67, February.
    7. Baland, Jean-Marie & Decerf, Benoit & Cassan, Guilhem, 2019. "“Too young to die†. Deprivation measures combining poverty and premature mortality," CEPR Discussion Papers 14059, C.E.P.R. Discussion Papers.

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