For Richer or for Poorer ? Evidence from Indonesia, South Africa, Spain, and Venezuela

We analyze household income dynamics using longitudinal data from Indonesia, South Africa (KwaZulu-Natal), Spain and Venezuela. In all four countries, households with the lowest reported base-year income experienced the largest absolute income gains. This result is robust to reasonable amounts of measurement error in two of the countries. In three of the four countries, households with the lowest predicted base-year income experienced gains at least as large as their wealthier counterparts. Thus, with one exception, the empirical importance of cumulative advantage, poverty traps, and skill-biased technical change was no greater than structural or macroeconomic changes that favored initially poor households in these four countries.ou