The Composition of Growth Matters for Poverty Alleviation
This paper contributes to explain the cross-country heterogeneity of the poverty response to changes in economic growth. It does so by focusing on the structure of output growth. The paper presents a two-sector theoretical model that clarifies the mechanism through which the sectoral composition of growth and associated labor intensity can affect workers' wages and, thus, poverty alleviation. Then it presents cross-country empirical evidence that analyzes first, the differential poverty-reducing impact of sectoral growth at various levels of disaggregation, and the role of unskilled labor intensity in such differential impact. The paper finds evidence that not only the size of economic growth but also its composition matters for poverty alleviation, with the largest contributions from labor-intensive sectors (such as agriculture, construction, and manufacturing). The results are robust to the influence of outliers, alternative explanations, and various poverty measures.
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dig-okr-1098688572024-08-08T17:03:24Z The Composition of Growth Matters for Poverty Alleviation Loayza, Norman V. Raddatz, Claudio ABUSE AGGREGATE GROWTH AGGREGATE OUTPUT AGRICULTURAL GROWTH CHANGES IN POVERTY COBB-DOUGLAS PRODUCTION FUNCTION CONSIDERABLE DISPERSION CONSTANT RETURNS COUNTRY SPECIFIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DISTRIBUTION DATA ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ELASTICITY OF SUBSTITUTION EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL SECTION EMPLOYMENT ESTIMATION RESULTS EXCHANGE RATE EXPLANATORY VARIABLES FIXED EFFECTS GINI COEFFICIENT GROWTH ^ RATE GROWTH EFFECT GROWTH ELASTICITY GROWTH PATH GROWTH RATE GROWTH RATES GROWTH RELATIONSHIP HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL IMPACT ON POVERTY REDUCTION INCIDENCE OF POVERTY INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIAL SECTOR INTERMEDIATE GOODS LABOR INTENSITIES LABOR INTENSITY LABOR MARKET LABOR MARKETS LABOR MOBILITY LABOR REALLOCATION LABOR SHARE LABOR-INTENSIVE GROWTH LEVEL OF TECHNOLOGY LITERACY RATES MEAN INCOME MEAN INCOME GROWTH MORTALITY NATIONAL ACCOUNTS 0 HYPOTHESIS OUTPUT GROWTH POLICY CIRCLES POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR COUNTRIES POOR HOUSEHOLDS POOR INDIVIDUALS POVERTY ALLEVIATION POVERTY CHANGE POVERTY CHANGES POVERTY DATA POVERTY GAP POVERTY LEVEL POVERTY LINE POVERTY MEASURE POVERTY MEASURES POVERTY REDUCING POVERTY REDUCTION PRO POOR PRODUCTION FUNCTION PRODUCTION GROWTH REAL WAGE REAL WAGES RELATIVE PRICES RESPECT RURAL AREAS SECTOR MODEL SECTORAL COMPOSITION SECTORAL GROWTH RATES SERVICE SECTORS SHARE OF LABOR SQUARED POVERTY GAP TECHNOLOGICAL PROGRESS TOTAL EMPLOYMENT TOTAL OUTPUT UNEQUAL COUNTRIES UNSKILLED LABOR UNSKILLED WORKERS URBANIZATION UTILITY FUNCTION WAGE INCREASE WAGE EQUALIZATION WAGE GAINS WAGE GROWTH WAGE RATE WORKER WORKERS This paper contributes to explain the cross-country heterogeneity of the poverty response to changes in economic growth. It does so by focusing on the structure of output growth. The paper presents a two-sector theoretical model that clarifies the mechanism through which the sectoral composition of growth and associated labor intensity can affect workers' wages and, thus, poverty alleviation. Then it presents cross-country empirical evidence that analyzes first, the differential poverty-reducing impact of sectoral growth at various levels of disaggregation, and the role of unskilled labor intensity in such differential impact. The paper finds evidence that not only the size of economic growth but also its composition matters for poverty alleviation, with the largest contributions from labor-intensive sectors (such as agriculture, construction, and manufacturing). The results are robust to the influence of outliers, alternative explanations, and various poverty measures. 2012-06-22T20:12:33Z 2012-06-22T20:12:33Z 2006-12 http://documents.worldbank.org/curated/en/2006/12/7245823/composition-growth-matters-poverty-alleviation https://hdl.handle.net/10986/8857 English en_US Policy Research Working Paper; No. 4077 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank application/pdf text/plain World Bank, Washington, DC |
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Banco Mundial |
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Estados Unidos |
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US |
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Bibliográfico |
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biblioteca |
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America del Norte |
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Biblioteca del Banco Mundial |
| language |
English en_US |
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ABUSE AGGREGATE GROWTH AGGREGATE OUTPUT AGRICULTURAL GROWTH CHANGES IN POVERTY COBB-DOUGLAS PRODUCTION FUNCTION CONSIDERABLE DISPERSION CONSTANT RETURNS COUNTRY SPECIFIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DISTRIBUTION DATA ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ELASTICITY OF SUBSTITUTION EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL SECTION EMPLOYMENT ESTIMATION RESULTS EXCHANGE RATE EXPLANATORY VARIABLES FIXED EFFECTS GINI COEFFICIENT GROWTH ^ RATE GROWTH EFFECT GROWTH ELASTICITY GROWTH PATH GROWTH RATE GROWTH RATES GROWTH RELATIONSHIP HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL IMPACT ON POVERTY REDUCTION INCIDENCE OF POVERTY INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIAL SECTOR INTERMEDIATE GOODS LABOR INTENSITIES LABOR INTENSITY LABOR MARKET LABOR MARKETS LABOR MOBILITY LABOR REALLOCATION LABOR SHARE LABOR-INTENSIVE GROWTH LEVEL OF TECHNOLOGY LITERACY RATES MEAN INCOME MEAN INCOME GROWTH MORTALITY NATIONAL ACCOUNTS 0 HYPOTHESIS OUTPUT GROWTH POLICY CIRCLES POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR COUNTRIES POOR HOUSEHOLDS POOR INDIVIDUALS POVERTY ALLEVIATION POVERTY CHANGE POVERTY CHANGES POVERTY DATA POVERTY GAP POVERTY LEVEL POVERTY LINE POVERTY MEASURE POVERTY MEASURES POVERTY REDUCING POVERTY REDUCTION PRO POOR PRODUCTION FUNCTION PRODUCTION GROWTH REAL WAGE REAL WAGES RELATIVE PRICES RESPECT RURAL AREAS SECTOR MODEL SECTORAL COMPOSITION SECTORAL GROWTH RATES SERVICE SECTORS SHARE OF LABOR SQUARED POVERTY GAP TECHNOLOGICAL PROGRESS TOTAL EMPLOYMENT TOTAL OUTPUT UNEQUAL COUNTRIES UNSKILLED LABOR UNSKILLED WORKERS URBANIZATION UTILITY FUNCTION WAGE INCREASE WAGE EQUALIZATION WAGE GAINS WAGE GROWTH WAGE RATE WORKER WORKERS ABUSE AGGREGATE GROWTH AGGREGATE OUTPUT AGRICULTURAL GROWTH CHANGES IN POVERTY COBB-DOUGLAS PRODUCTION FUNCTION CONSIDERABLE DISPERSION CONSTANT RETURNS COUNTRY SPECIFIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DISTRIBUTION DATA ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ELASTICITY OF SUBSTITUTION EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL SECTION EMPLOYMENT ESTIMATION RESULTS EXCHANGE RATE EXPLANATORY VARIABLES FIXED EFFECTS GINI COEFFICIENT GROWTH ^ RATE GROWTH EFFECT GROWTH ELASTICITY GROWTH PATH GROWTH RATE GROWTH RATES GROWTH RELATIONSHIP HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL IMPACT ON POVERTY REDUCTION INCIDENCE OF POVERTY INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIAL SECTOR INTERMEDIATE GOODS LABOR INTENSITIES LABOR INTENSITY LABOR MARKET LABOR MARKETS LABOR MOBILITY LABOR REALLOCATION LABOR SHARE LABOR-INTENSIVE GROWTH LEVEL OF TECHNOLOGY LITERACY RATES MEAN INCOME MEAN INCOME GROWTH MORTALITY NATIONAL ACCOUNTS 0 HYPOTHESIS OUTPUT GROWTH POLICY CIRCLES POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR COUNTRIES POOR HOUSEHOLDS POOR INDIVIDUALS POVERTY ALLEVIATION POVERTY CHANGE POVERTY CHANGES POVERTY DATA POVERTY GAP POVERTY LEVEL POVERTY LINE POVERTY MEASURE POVERTY MEASURES POVERTY REDUCING POVERTY REDUCTION PRO POOR PRODUCTION FUNCTION PRODUCTION GROWTH REAL WAGE REAL WAGES RELATIVE PRICES RESPECT RURAL AREAS SECTOR MODEL SECTORAL COMPOSITION SECTORAL GROWTH RATES SERVICE SECTORS SHARE OF LABOR SQUARED POVERTY GAP TECHNOLOGICAL PROGRESS TOTAL EMPLOYMENT TOTAL OUTPUT UNEQUAL COUNTRIES UNSKILLED LABOR UNSKILLED WORKERS URBANIZATION UTILITY FUNCTION WAGE INCREASE WAGE EQUALIZATION WAGE GAINS WAGE GROWTH WAGE RATE WORKER WORKERS |
| spellingShingle |
ABUSE AGGREGATE GROWTH AGGREGATE OUTPUT AGRICULTURAL GROWTH CHANGES IN POVERTY COBB-DOUGLAS PRODUCTION FUNCTION CONSIDERABLE DISPERSION CONSTANT RETURNS COUNTRY SPECIFIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DISTRIBUTION DATA ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ELASTICITY OF SUBSTITUTION EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL SECTION EMPLOYMENT ESTIMATION RESULTS EXCHANGE RATE EXPLANATORY VARIABLES FIXED EFFECTS GINI COEFFICIENT GROWTH ^ RATE GROWTH EFFECT GROWTH ELASTICITY GROWTH PATH GROWTH RATE GROWTH RATES GROWTH RELATIONSHIP HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL IMPACT ON POVERTY REDUCTION INCIDENCE OF POVERTY INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIAL SECTOR INTERMEDIATE GOODS LABOR INTENSITIES LABOR INTENSITY LABOR MARKET LABOR MARKETS LABOR MOBILITY LABOR REALLOCATION LABOR SHARE LABOR-INTENSIVE GROWTH LEVEL OF TECHNOLOGY LITERACY RATES MEAN INCOME MEAN INCOME GROWTH MORTALITY NATIONAL ACCOUNTS 0 HYPOTHESIS OUTPUT GROWTH POLICY CIRCLES POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR COUNTRIES POOR HOUSEHOLDS POOR INDIVIDUALS POVERTY ALLEVIATION POVERTY CHANGE POVERTY CHANGES POVERTY DATA POVERTY GAP POVERTY LEVEL POVERTY LINE POVERTY MEASURE POVERTY MEASURES POVERTY REDUCING POVERTY REDUCTION PRO POOR PRODUCTION FUNCTION PRODUCTION GROWTH REAL WAGE REAL WAGES RELATIVE PRICES RESPECT RURAL AREAS SECTOR MODEL SECTORAL COMPOSITION SECTORAL GROWTH RATES SERVICE SECTORS SHARE OF LABOR SQUARED POVERTY GAP TECHNOLOGICAL PROGRESS TOTAL EMPLOYMENT TOTAL OUTPUT UNEQUAL COUNTRIES UNSKILLED LABOR UNSKILLED WORKERS URBANIZATION UTILITY FUNCTION WAGE INCREASE WAGE EQUALIZATION WAGE GAINS WAGE GROWTH WAGE RATE WORKER WORKERS ABUSE AGGREGATE GROWTH AGGREGATE OUTPUT AGRICULTURAL GROWTH CHANGES IN POVERTY COBB-DOUGLAS PRODUCTION FUNCTION CONSIDERABLE DISPERSION CONSTANT RETURNS COUNTRY SPECIFIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DISTRIBUTION DATA ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ELASTICITY OF SUBSTITUTION EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL SECTION EMPLOYMENT ESTIMATION RESULTS EXCHANGE RATE EXPLANATORY VARIABLES FIXED EFFECTS GINI COEFFICIENT GROWTH ^ RATE GROWTH EFFECT GROWTH ELASTICITY GROWTH PATH GROWTH RATE GROWTH RATES GROWTH RELATIONSHIP HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL IMPACT ON POVERTY REDUCTION INCIDENCE OF POVERTY INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIAL SECTOR INTERMEDIATE GOODS LABOR INTENSITIES LABOR INTENSITY LABOR MARKET LABOR MARKETS LABOR MOBILITY LABOR REALLOCATION LABOR SHARE LABOR-INTENSIVE GROWTH LEVEL OF TECHNOLOGY LITERACY RATES MEAN INCOME MEAN INCOME GROWTH MORTALITY NATIONAL ACCOUNTS 0 HYPOTHESIS OUTPUT GROWTH POLICY CIRCLES POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR COUNTRIES POOR HOUSEHOLDS POOR INDIVIDUALS POVERTY ALLEVIATION POVERTY CHANGE POVERTY CHANGES POVERTY DATA POVERTY GAP POVERTY LEVEL POVERTY LINE POVERTY MEASURE POVERTY MEASURES POVERTY REDUCING POVERTY REDUCTION PRO POOR PRODUCTION FUNCTION PRODUCTION GROWTH REAL WAGE REAL WAGES RELATIVE PRICES RESPECT RURAL AREAS SECTOR MODEL SECTORAL COMPOSITION SECTORAL GROWTH RATES SERVICE SECTORS SHARE OF LABOR SQUARED POVERTY GAP TECHNOLOGICAL PROGRESS TOTAL EMPLOYMENT TOTAL OUTPUT UNEQUAL COUNTRIES UNSKILLED LABOR UNSKILLED WORKERS URBANIZATION UTILITY FUNCTION WAGE INCREASE WAGE EQUALIZATION WAGE GAINS WAGE GROWTH WAGE RATE WORKER WORKERS Loayza, Norman V. Raddatz, Claudio The Composition of Growth Matters for Poverty Alleviation |
| description |
This paper contributes to explain the cross-country heterogeneity of the poverty response to changes in economic growth. It does so by focusing on the structure of output growth. The paper presents a two-sector theoretical model that clarifies the mechanism through which the sectoral composition of growth and associated labor intensity can affect workers' wages and, thus, poverty alleviation. Then it presents cross-country empirical evidence that analyzes first, the differential poverty-reducing impact of sectoral growth at various levels of disaggregation, and the role of unskilled labor intensity in such differential impact. The paper finds evidence that not only the size of economic growth but also its composition matters for poverty alleviation, with the largest contributions from labor-intensive sectors (such as agriculture, construction, and manufacturing). The results are robust to the influence of outliers, alternative explanations, and various poverty measures. |
| topic_facet |
ABUSE AGGREGATE GROWTH AGGREGATE OUTPUT AGRICULTURAL GROWTH CHANGES IN POVERTY COBB-DOUGLAS PRODUCTION FUNCTION CONSIDERABLE DISPERSION CONSTANT RETURNS COUNTRY SPECIFIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DISTRIBUTION DATA ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC GROWTH ELASTICITY OF SUBSTITUTION EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL SECTION EMPLOYMENT ESTIMATION RESULTS EXCHANGE RATE EXPLANATORY VARIABLES FIXED EFFECTS GINI COEFFICIENT GROWTH ^ RATE GROWTH EFFECT GROWTH ELASTICITY GROWTH PATH GROWTH RATE GROWTH RATES GROWTH RELATIONSHIP HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL IMPACT ON POVERTY REDUCTION INCIDENCE OF POVERTY INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIAL SECTOR INTERMEDIATE GOODS LABOR INTENSITIES LABOR INTENSITY LABOR MARKET LABOR MARKETS LABOR MOBILITY LABOR REALLOCATION LABOR SHARE LABOR-INTENSIVE GROWTH LEVEL OF TECHNOLOGY LITERACY RATES MEAN INCOME MEAN INCOME GROWTH MORTALITY NATIONAL ACCOUNTS 0 HYPOTHESIS OUTPUT GROWTH POLICY CIRCLES POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR COUNTRIES POOR HOUSEHOLDS POOR INDIVIDUALS POVERTY ALLEVIATION POVERTY CHANGE POVERTY CHANGES POVERTY DATA POVERTY GAP POVERTY LEVEL POVERTY LINE POVERTY MEASURE POVERTY MEASURES POVERTY REDUCING POVERTY REDUCTION PRO POOR PRODUCTION FUNCTION PRODUCTION GROWTH REAL WAGE REAL WAGES RELATIVE PRICES RESPECT RURAL AREAS SECTOR MODEL SECTORAL COMPOSITION SECTORAL GROWTH RATES SERVICE SECTORS SHARE OF LABOR SQUARED POVERTY GAP TECHNOLOGICAL PROGRESS TOTAL EMPLOYMENT TOTAL OUTPUT UNEQUAL COUNTRIES UNSKILLED LABOR UNSKILLED WORKERS URBANIZATION UTILITY FUNCTION WAGE INCREASE WAGE EQUALIZATION WAGE GAINS WAGE GROWTH WAGE RATE WORKER WORKERS |
| author |
Loayza, Norman V. Raddatz, Claudio |
| author_facet |
Loayza, Norman V. Raddatz, Claudio |
| author_sort |
Loayza, Norman V. |
| title |
The Composition of Growth Matters for Poverty Alleviation |
| title_short |
The Composition of Growth Matters for Poverty Alleviation |
| title_full |
The Composition of Growth Matters for Poverty Alleviation |
| title_fullStr |
The Composition of Growth Matters for Poverty Alleviation |
| title_full_unstemmed |
The Composition of Growth Matters for Poverty Alleviation |
| title_sort |
composition of growth matters for poverty alleviation |
| publisher |
World Bank, Washington, DC |
| publishDate |
2006-12 |
| url |
http://documents.worldbank.org/curated/en/2006/12/7245823/composition-growth-matters-poverty-alleviation https://hdl.handle.net/10986/8857 |
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| _version_ |
1807158128450469888 |