• The Journal of Asian Finance, Economics and Business
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• v.4 no.4
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• pp.51-60
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• 2017

India is the top recipient of workers' remittance flows; recent data indicate that the Remittances/GDP ratio has increased from 2.7% in 2000 to 3.36% in 2015. We apply a consumption behavior model, based on the "permanent income hypothesis", to estimate the consumption augmentation and the stability impact for the period of 1989-2014. The independent variables are: (i) real per capita income (exclusive of remittances) is the measure of "permanent income", (ii) remittances is the measure of "transitory income", and (iii) real interest rate as the indicator of consumers' ability for intertemporal consumption. The economic ramifications are important since current global risk factors could decrease flows in the future. The results indicate the significance of all three variables; there are: (i) evidence of significant consumption augmentation, (ii) consumption responds higher to remittances than to real income, the remittance elasticity is 0.571 and the income elasticity is 0.31, and (iii) evidence of pro-cyclical effect. The VAR model indicates some linkages and causality in the series that result in small response to the shocks. Policies to increase or stabilize remittance flows and to leverage remittances for economic development are important.

• KDI Journal of Economic Policy
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• v.43 no.2
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• pp.1-22
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• 2021

The effects of social distancing measures on income distributions and aggregate variables are examined with an off-the-shelf heterogeneous-agent incomplete-market model. The model shows that social distancing measures, which limit households' labor supply, can decrease the labor supply of low-income households who hold insufficient assets and need income the most given their borrowing constraints. Social distancing measures can therefore exacerbate income inequality by lowering the incomes of the poor. An equilibrium interest rate can fall when the social distancing shock is expected to be persistent because households save more to prepare for rising consumption volatility given the possibility of binding to the labor supply constraint over time. When the shock is expected to be transitory, in contrast, the interest rate can rise upon the arrival of the shock because constrained households choose to borrow more to smooth consumption given the expectation that the shock will fade away. The model also shows that social distancing shocks, which diminish households' consumption demand, can decrease households' incomes evenly for every income quantile, having a limited impact on income inequality.

• Journal of Labour Economics
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• v.35 no.2
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• pp.79-115
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• 2012

In the study, we try to get reliable estimates of intergenerational income mobility in Korea. At first, we show that the low estimates of previous studies are mainly due to sample selection problem. The direct estimations using OLS after correcting this problem show higher values than previous estimates. We also compute the attenuation bias by decomposing the variances of earnings into the variances of permanent and transitory components of earnings by the results of the regression. Additionally, we try to estimate the range of intergenerational mobility by comparing the OLS results with the results of the two samples instrumental variable estimation and the three samples instrumental variable estimation. The results of these estimations are a little higher than or similar to OLS results.

• Korean Journal of Social Welfare
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• v.65 no.3
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• pp.183-206
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• 2013

Using Korean Labor and Income Panel Study (wave 1~11) database, this study analyzed the poverty duration of the poor as a whole and by households' characteristics. For this purpose, I first estimated poverty exit rates and reentry rates applying discrete-time hazard model to the sample, and then calculated poverty duration combining these two probability rates. The results show that about a half of poor households are transitory (short-term) poor with 1~2 years of poverty duration. A quarter is chronic (long-term) poor lasting for 5 or more years of poverty duration. The remained quarter can be categorized as the recurrent or mid-term poor. The socioeconomic characteristics of households greatly affect poverty duration. Long-term poverty is prevalent among female-head households, elderly households, single households, or households headed by a person with a lower level of education. If households' heads do not work, or work as temporary or daily-employed workers, the poverty duration tends to be longer. The findings suggest that the poor consist of various social classes with different characteristics. Efficient anti-poverty policy should be based on thoroughly identifying the specific characteristics and needs of each class.