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Boyan Atanaschev

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Jan 7, 2024, 10:46:19 PM1/7/24
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Our recent staff research finds that new technology risks widening the gap between rich and poor countries by shifting more investment to advanced economies where automation is already established. This could in turn have negative consequences for jobs in developing countries by threatening to replace rather than complement their growing labor force, which has traditionally provided an advantage to less developed economies. To prevent this growing divergence, policymakers in developing economies will need to take actions to raise productivity and improve skills among workers.

This paper examines the trends in utilization of five indicators of reproductive and child health services, namely, childhood immunization, medical assistance at delivery, antenatal care, contraceptive use and unmet need for contraception, by wealth index of the household in India and two disparate states, Uttar Pradesh and Maharashtra. The data from three rounds of the National Family and Health Survey conducted during 1992-2005 are analysed. The wealth index is computed using principal component derived weights from a set of consumer durables, land size, housing quality and water and sanitation facilities of the household, and classified into quintiles for all three rounds. Bivariate analyses, rich-poor ratio and concentration index are used to understand the trends in utilization of, and inequality in, reproductive and child health services. The results indicate huge disparities in utilization of these services, largely to the disadvantage of the poor. Utilization of basic childhood immunization among the poorest and the poor stagnated in India, as well as in both states, during 1998-2005 compared with 1992-1998. The use of maternal care services such as medical assistance at delivery and antenatal care remained at a low level among the poor over this period. However, contraceptive use increased relatively faster among the poor, even with higher unmet need. Of all these services, the inequality in medical assistance at delivery is consistently large, while that of contraceptive use is small. The state-level differences in service coverage by wealth quintiles over time are large.

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More precisely, the study shows that in the U.S., the richest 1 percent of men lives 14.6 years longer on average than the poorest 1 percent of men, while among women in those wealth percentiles, the difference is 10.1 years on average.

Among the municipalities where low-income people have experienced the greatest increases in lifespan from 2001-2014, for example, are Toms River, New Jersey; Birmingham, Alabama; and Richmond, Virginia. Cities with the largest drops in lifespan among the poor are Tampa and Pensacola, Florida; and Knoxville, Tennessee.

Places with the overall longest lifespans for the poor include New York City, with a chart-topping 81.8 years on average, as well as a passel of cities in California. The bottom of that list includes Gary, Indiana (77.4 years on average); Las Vegas; and Oklahoma City.

Among the top income earners, people live longest in Salt Lake City (87.8 years on average); Portland, Maine; and Spokane, Washington. The rich have the shortest lives in Las Vegas (84.1 years on average); Gary, Indiana; and Honolulu.

Opinions among Republicans and Republican leaners are more divided: 53% say hard work has more to do with why a person is rich, while 45% say it is because they have more advantages. In views of why a person is poor, 55% of Republicans say it is more because they have faced obstacles most others have not, while 42% say it is more because they have not worked as hard as most others.

Views of why people are rich have changed significantly over the past few years, with a growing share of Americans saying the main reason a person is rich is because they possess more advantages than other people.

So much for the growth in the gap; what about the size of the gap itself? Income inequality within California may not look like what you would expect. Regions such as Orange County and the Bay Area, despite their notable concentrations of wealth, are some of the more equal in the state. By far the most unequal California region is the Central Valley, where high-income households make 14 times as much as poor households.

There are other important lessons to draw from how income inequality varies throughout the state, and how the pattern has changed since the Great Recession. Part of the reason why regions such as the Bay Area and Orange County stack up favorably is because recent changes in income inequality have more to do with the deteriorating incomes of the poor than the growing fortunes of the rich.

Those California regions with the biggest chasm between rich and poor typically have some of the poorest populations in the state. In the Central Valley for example, households in the bottom 10 percent of the income distribution made less than $10,000 per year (adjusted for a family of four). Their equivalents in the Bay Area made more than double that.

Focusing on very rich households will yield different results than focusing on even slightly less rich households. Research from the Brookings Institute that compares higher-income households (those at the top 5 percent) to those at the bottom 20 percent makes the Bay Area appear much more unequal, with the greater San Francisco metro area the third most unequal region in the country.

They are getting richer at a much faster pace while the poor are still struggling to earn a minimum wage and access quality education and healthcare services, which continue to suffer from chronic under-investment.

The top 10% of the Indian population holds 77% of the total national wealth. 73% of the wealth generated in 2017 went to the richest 1%, while *670 million Indians who comprise the poorest half of the population saw only a 1% increase in their wealth.

As a result, decent healthcare is a luxury only available to those who have the money to pay for it. While the country is a top destination for medical tourism, the poorest Indian states have infant mortality rates higher than those in sub-Saharan Africa. India accounts for 17% of global maternal deaths, and 21% of deaths among children below five years.

Before 1800, just about everybody was poor. You had royalty, you had these huge landowners, but they were a tiny, tiny minority and just about everyone lived in poverty. And everyone lived very much wedded to their land. This was the entire history of humanity. There were some huge changes, of course: agriculture. What happened was that mostly people were hunters and gatherers before agriculture. And then, when agriculture started, food production was then brought to people rather than vice versa. People didn't go out looking for food. There were places where they knew that a steady supply of food would be created.

But at that time, also was the start of--one of the great economists, Deirdre McCloskey, talked about right around that time, with the advent of the Industrial Revolution and steam, you had the beginning of what she called the great divergence, meaning that certain areas, especially Europe and the United States, grew rich very, very quickly.

Well, if you look back into the history of how you tackle the problem of inequality, how you tackle the problem of poverty, this man, Andrew Carnegie, is a very important figure. He wrote, in a book called "The Gospel of Wealth"--he said that, "The man who dies leaving behind many millions of available wealth, which was his to administer during life will pass away unwept, unhonored, and unsung. The man who dies thus rich dies disgraced."

Let's look at another example, a very famous one of course is Albert Schweitzer. Now, I always get in trouble when I talk about Albert Schweitzer like this because people, for good reasons, admire him very much. But Albert Schweitzer was part of a different tradition. He was part of the colonialist movement. He was also a missionary. And there was this sense that it was the responsibility of people like Albert Schweitzer to bring civilization to the uncivilized masses. But Albert Schweitzer also portrayed himself as a great physician who was providing care to the poor.

In addition, we have been able to put $28 billion directly into an account that we reserve for the poorest countries. And this program is called IDA, the International Development Association. And IDA gives grants to the poorest countries. They can pay it back over 40 years. Right, very hard to get a loan that you pay back over 40 years at zero percent interest, and we do that to help countries grow. Now, that is what we have done over time.

How do we mobilize those trillions of dollars sitting on the sidelines for the benefit of the poorest people in the world? We know that the private sector has to be much more involved in development than before, because there are many, many examples of win-win situations. Let me show you one:

But this is the crisis that I am most concerned about, the human capital crisis. 400 million people lack access to essential services. 100 million people fall into poverty every year from catastrophic health expenses. Only one-third of the world's poor are covered by safety nets.

You know, when I say that 200 years ago just about everyone was poor, 50 years ago, when I was a young person--54 years ago when I was still living in Korea, there was a sense that countries like Korea, the poorest countries in the world, would always be poor, you know, the term "Poverty will always be with you."

And so, there was a huge amount of literature of how rich countries and organizations like the World Bank, how they should think about their mission with respect to poor people. And there was a huge amount of literature created.

It all goes back to this: These kids want to have a chance to become whatever they want. And I think about--you know, this is me back in 1963 living in Korea. And this is what Korea looked like in 1963, one of the poorest countries in the world, lower GDP per capita than Ghana, than Somalia, than Kenya.

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