The author analyzes the stability of the empirical relationship between growth and changes in inequality over time. He concludes that while during the 1970s and 1980s the growth process was not accompanied by increases in inequality, during the 1990s a positive and significant correlation appears in the data. For this decade, he estimates that a 1 percent growth rate would be associated with an increase in the gini coefficient of between .3 to .5 percent. This positive correlation is hidden when one estimates the model without allowing for changes in the relationship over the different decades. The finding is robust to a number of departures from the basic specification including: (1) the use of alternative specifications to isolate decadal shifts; (2) the use of robust estimation techniques that address the potential influence of outliers; (3) restricting the sample to a balanced panel for the 1980s and 1990s to control for changes in the composition of the sample related to the unbalanced nature of the panel; and (4) considering the possibility of fixed effects in the data. The author also explores the impact of this structural change in the rate of poverty reduction and concludes that it is far from negligible.
Bibliographic Details
| Main Author: |
Lopez, Humberto |
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| Format: | Policy Research Working Paper
biblioteca
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| Language: | English |
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| Published: |
World Bank, Washington, DC
2006-06
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| Subjects: | ABSOLUTE VALUE,
ANNUAL GROWTH,
ANNUAL GROWTH RATE,
ANNUAL RATE,
COUNTRY EFFECTS,
DATA SET,
DECOMPOSABLE POVERTY MEASURES,
DENSITY FUNCTION,
ECONOMIC GROWTH,
ECONOMIC REVIEW,
ECONOMICS,
ECONOMICS LETTERS,
EMPIRICAL LITERATURE,
EMPIRICAL RELATIONSHIP,
EMPIRICAL RESULTS,
ERROR TERM,
ESTIMATION TECHNIQUES,
EXPLANATORY VARIABLE,
FIXED EFFECTS,
FIXED EFFECTS ESTIMATOR,
GINI COEFFICIENT,
GROWTH,
GROWTH DATA,
GROWTH PRO-POOR,
GROWTH PROCESS,
GROWTH RATE,
GROWTH RATES,
GROWTH-INEQUALITY RELATIONSHIP,
HEADCOUNT POVERTY,
HOUSEHOLD INCOME,
IMPACT OF INEQUALITY,
INCOME INEQUALITY,
INEQUALITY DATA,
INEQUALITY RELATIONSHIP,
INEQUALITY WILL,
LOG GINI,
LOW INCOME,
MEASURING INCOME INEQUALITY,
0 HYPOTHESIS,
OBSERVED GROWTH,
OBSERVED GROWTH RATE,
PER CAPITA GROWTH,
PER CAPITA INCOME,
PER CAPITA INCOME LEVEL,
PER CAPITA INCOME LEVELS,
POINT ESTIMATE,
POINT ESTIMATES,
POLICY RESEARCH,
POSITIVE CORRELATION,
POSITIVE GROWTH,
POVERTY,
POVERTY GAP,
POVERTY HEADCOUNT,
POVERTY IMPACT,
POVERTY LINE,
POVERTY MEASURE,
POVERTY RATE,
POVERTY REDUCTION,
PRO-POOR,
REGRESSION TECHNIQUES,
RELATIVE INCOMES,
SENSITIVITY ANALYSIS,
SIGNIFICANT ATTENTION,
SIGNIFICANT CORRELATION,
SQUARE POVERTY GAP,
SQUARED POVERTY GAP,
STRUCTURAL BREAK,
TRADE LIBERALIZATION, |
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| Online Access: | http://documents.worldbank.org/curated/en/2006/06/6822659/growth-less-pro-poor-1990s
http://hdl.handle.net/10986/8460
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