Poverty Dynamics in India between 2004 and 2012: Insights from Longitudinal Analysis Using Synthetic Panel Data

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Abstract

Recent National Sample Surveys point to significant poverty reduction in India since 2004/05, with a marked acceleration between 2009/10 and 2011/12. This paper enquires into important aspects of income mobility between 2004/05 and 2011/12, based on new statistical methods to convert the three pertinent National Sample Survey rounds into synthetic panels. The analysis draws on the synthetic panels to derive a vulnerability line for India that can be used to separate out a population subgroup comprising non-poor households facing a heightened risk of falling into poverty. The paper documents a strong pattern of upward mobility out of poverty and vulnerability into the middle class, with a noticeable acceleration between 2009/10 and 2011/12. The paper further undertakes a careful investigation into the comparability of the survey rounds, prompted by the observation that fairly significant modifications had been made to survey questionnaires. The findings suggest that changes in questionnaire design have not compromised the comparability of the data.