[Excerpt] Some developing countries have experienced rapid economic growth, some slow economic growth, some no growth at all, and some economic decline. The traditional way of gauging the distributional consequences of economic growth, if in fact there was economic growth, is to use data from comparable cross sections to calculate various measures of (relative) inequality and (absolute) poverty. The very large literature on inequality and poverty will not be reviewed here.
A newer approach in the development literature is to study the distributional consequences of economic growth (or non-growth) by using data for the same recipient units for two or more points in time to analyze changes in total income (“income mobility”) and in income from paid employment and self-employment (“earnings mobility”). Such data, called panel data or longitudinal data, may involve baseline interviews and one or more subsequent reinterviews or alternatively a single interview with retrospective questions about previous income or earnings. Examples of panels with reinterviews are South Africa’s KwaZulu-Natal Income Dynamics Study, the Indonesia Family Life Study, and Chile’s CASEN panel. A prominent panel based on retrospective data is the China Household Income Project. The literature reviewed in this paper draws on both kinds of panel data.