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Income distribution, inequality and poverty in Sri Lanka, 1963-82

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Divisekera, M S D K(Mudiyanselage Sarath Dayananda K) (1988) Income distribution, inequality and poverty in Sri Lanka, 1963-82. Research Master thesis, University of Tasmania.

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Abstract

The relative intensity of concern between growth and distribution
has now gone full circle. The achievement of a high rate of economic
growth, the major emphasis of the development strategy, that reached
its peak in the "decade of development" in the 1960s, ceded its place
of priority to redistribution and eradication of mass poverty in the
1970s. A backswing of this emphasis, from redistribution to growth
and from direct distributional measures to the "trickle-down", has
been evident since late 1970s. The world has once again brought the
objective of growth to the forefront and redistribution to a
relatively low priority. The present study is carried out in the
context of this changing emphasis of growth and distribution.
This study analyses the pattern of income distribution and
poverty in Sri Lanka over the last three decades using income and
consumption data gathered from four nationwide surveys of 1963, 73,
79 and 82. The study adopts an analytical approach, distribution of
incomes are examined using two types of disaggregation, by economic
sectors and ethnic groups. Standard summary and descriptive
measures of income inequality are employed.
Poverty is analyzed using two poverty lines; absolute versus
relative. Separate poverty lines are defined for three major socioeconomic
regions: urban, rural and estate. Absolute poverty lines
are defined on the basis of chosen basic needs, and relative poverty
lines on the basis of overall living standards of the community.
Relative inequality of incomes in Sri Lanka declined between
1963-73 and worsened after 1973. The changes are broad based;
inequality of size distribution of personal, family [spending units]
and per capita incomes declined between 1963- 73 and increased
between 1973-82. A similar change in the income inequality was
evident among all ethnic groups and within major industrial sectors.

This change in the pattern of income distribution is not merely a
statistical artifact. It has been accompanied by significant changes
in the living standards of the lower income groups. This inference
emerges from the analysis of the incidence of absolute poverty. The
percentage in absolute poverty in the economy, as well as within three
major socio-economic regions, [urban, rural and estate], declined
significantly between 1963-73. Between 1973-79 and 79-82 the
opposite occurred, the incidence of absolute poverty increased, with
such increases most pronounced between 1973 - 79. The change in the
relative poverty however, was less pronounced during this period.
The changes are explained by referring to the development
strategy and growth patterns of the economy. In contrast to many of
the suggestions in literature, Sri Lankan experience indicates that
the pattern of distribution of incomes of an economy is influenced
largely by the policy measures rather than the growth per se.
Finally, the results suggest that the shift from redistribution
to 'trickle-down' which occurred during the latter part of the 1970s
has brought increased economic inequalities among the Sri Lankan
population in general, and an absolute impoverishment among the lower
income groups in particular.

Item Type: Thesis (Research Master)
Keywords: Income distribution, Poor, Poverty
Copyright Holders: The Author
Copyright Information:

Copyright the Author - The University is continuing to endeavour to trace the copyright
owner(s) and in the meantime this item has been reproduced here in good faith. We
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Additional Information:

Thesis (M.Ec.)--University of Tasmania, 1989. Bibliography: leaves [197]-208

Date Deposited: 08 Dec 2014 23:58
Last Modified: 11 Mar 2016 05:55
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