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The Microeconomics of Changing Income Distribution in Malaysia

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[Excerpt] This study uses data from Malaysia's Household Income and Expenditure Surveys to quantify the importance of different factors in accounting for the changes in Malaysia's income distribution between 1984 and 1989 ("Period 1") and between 1989 and 1997 ("Period 2"). These particular years were chosen, because 1997 is the most recent available survey, 1984 is the earliest survey comparable to 1997, and 1989 is important for three reasons: 1. Income inequality fell until 1989 and rose thereafter. 2. Economic growth was slow in 1984-89 and fast in 1989-97. and 3. 1989 is the closest year to the beginning of Malaysia's National Development Policy, which placed heightened emphasis on the eradication of hardcore poverty.

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2002-01-01

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Malaysia; income distribution; economic growth; poverty

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Required Publisher Statement: ©2003 Inter-American Development Bank. Reprinted with permission. Final version published as Fields, G. S. (2004). The microeconomics of changing income distribution in Malaysia. In F. Bourguignon, F. Ferreira, & N. Lustig (Eds.), Microeconomics of income distribution dynamics in East Asia and Latin America (pp. 219-274). Washington, DC: Inter-American Development Bank.

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