Unemployment-Poverty Trade-Offs

The author examines the potential trade-offs that may arise between poverty alleviation and unemployment reduction. He discusses various analytical arguments that may provide a rationale for their existence, and uses three alternative methodologies to assess their relevance: a vector autoregression framework (which is applied to Brazil and Chile), cross-country regressions, and simulations with a structural macro model linked to a household survey. Impulse response functions to output and wage shocks indicate no short-run tradeoff. between unemployment and poverty. By contrast, regression results, which control for a variety of determinants of poverty rates across countries, suggest that such a trade-off may indeed exist. Simulations with the structural model show that labor market reforms may induce both short- and long-run trade-offs between the composition of unemployment and the incidence of poverty among household groups.

Bibliographic Details

Main Author:	Agénor, Pierre-Richard
Language:	English en_US
Published:	World Bank, Washington, D.C. 2004-05
Subjects:	AGGREGATE LEVEL, ARBITRAGE, AUTOREGRESSION, AVERAGE GROWTH, AVERAGE GROWTH RATE, CAPITAL ACCUMULATION, CAPITAL FORMATION, CENTRAL BANK, CONSTANT RETURNS TO SCALE, COUNTRY REGRESSIONS, DATA SOURCES, DEPENDENT VARIABLE, DEVELOPING COUNTRIES, DEVELOPING REGIONS, DIMINISHING RETURNS, DIRECT IMPACT, DISCOUNTED VALUE, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC SHOCKS, ECONOMISTS, ELASTICITY, ELASTICITY OF DEMAND, EQUILIBRIUM, EXCHANGE RATE, EXCHANGE RATES, EXERCISES, EXPLANATORY VARIABLES, EXTERNALITY, EXTREME POVERTY, FUNCTIONAL FORM, GDP PER CAPITA, GROWTH CONTEXT, GROWTH LITERATURE, GROWTH PROCESS, GROWTH RATE, GROWTH RATES, HEAD- COUNT RATIO, HEADCOUNT INDEX, HEADCOUNT POVERTY, HEADCOUNT RATIO, HIGH, HOUSEHOLD SURVEY, HUMAN DEVELOPMENT, HUMAN DEVELOPMENT REPORT, IMPORTS, INCOME, INCREASE POVERTY, INFLATION, INFLATION RATE, INFORMAL ECONOMY, INFORMAL SECTOR, INFORMAL SECTORS, INNOVATION, INTERNATIONAL POVERTY LINE, INTERNATIONAL POVERTY LINES, LABOR FORCE, LABOR MARKET, LIFE EXPECTANCY, LIVING STANDARDS, LONG RUN, LONG TERM, MACROECONOMIC CONDITIONS, MARGINAL COST, MARGINAL PRODUCT, MARKET ECONOMY, MICRO DATA, MINIMUM WAGE, MORTALITY, NATIONAL POVERTY, NATIONAL POVERTY LINE, 0 HYPOTHESIS, OUTPUT GAP, OUTPUT GROWTH, OUTPUT PER CAPITA, PAYROLL TAXES, POLICY GOALS, POOR COUNTRIES, POSITIVE EXTERNALITIES, POVERTY, POVERTY ALLEVIATION, POVERTY GAP, POVERTY INDEX, POVERTY LEVELS, POVERTY LINE, POVERTY LINES, POVERTY RATE, POVERTY RATES, POVERTY REDUCTION, PRIMARY SCHOOL, PRODUCTION FUNCTION, PRODUCTION TECHNOLOGY, PRODUCTIVITY, PRODUCTIVITY GROWTH, REAL EXCHANGE RATE, REAL GDP, REAL INCOME, REAL WAGES, SAVING RATE, SAVINGS, SHORT TERM, SIGNIFICANT EFFECT, SIGNIFICANT IMPACT, SIMULATION TECHNIQUES, STANDARD DEVIATION, TECHNICAL ASSISTANCE, TRANSITION ECONOMIES, UNEMPLOYMENT, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, UNSKILLED LABOR, URBAN AREAS, URBAN HOUSEHOLDS, URBAN POOR, URBAN POVERTY, VULNERABLE GROUPS, WELFARE FUNCTION, WORKERS, WORKING POOR, YOUNG PEOPLE, YOUNG WORKERS,
Online Access:	http://documents.worldbank.org/curated/en/2004/05/4973104/unemployment-poverty-trade-offs https://hdl.handle.net/10986/14028
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