Macroeconomic Adjustment and the Poor : Analytical Issues and Cross-Country Evidence
The author studies the links between macroeconomic adjustment and poverty. First, he summarizes some of the recent evidence on poverty in the developing world. Second, he reviews the various channels through which macroeconomic policies affect the poor. Third, the author emphasizes the role of the labor market. He develops an analytical framework that captures some of the main features of the urban labor market in developing countries and studies the effects of fiscal adjustment on wages, employment, and poverty. Fourth, he presents cross-country regressions linking various macroeconomic and structural variables to poverty. The author finds that output growth and real exchange rate depreciations tend to lower poverty, while illiteracy, income inequality, and macroeconomic volatility tend to increase poverty. In addition, the impact of growth on poverty appears to be asymmetric, and to result from a significant relationship between episodes of increasing poverty and negative growth rates.
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| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2002-02
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| Subjects: | EMPLOYMENT, EXCHANGE RATES, GROWTH RATES, ILLITERACY, INCOME INEQUALITY, LABOR MARKET, MACROECONOMIC VOLATILITY, OUTPUT GROWTH, POVERTY, WAGES, |
| Online Access: | http://documents.worldbank.org/curated/en/2002/02/1723034/macroeconomic-adjustment-poor-analytical-issues-cross-country-evidence https://hdl.handle.net/10986/14856 |
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| Summary: | The author studies the links between
macroeconomic adjustment and poverty. First, he summarizes
some of the recent evidence on poverty in the developing
world. Second, he reviews the various channels through which
macroeconomic policies affect the poor. Third, the author
emphasizes the role of the labor market. He develops an
analytical framework that captures some of the main features
of the urban labor market in developing countries and
studies the effects of fiscal adjustment on wages,
employment, and poverty. Fourth, he presents cross-country
regressions linking various macroeconomic and structural
variables to poverty. The author finds that output growth
and real exchange rate depreciations tend to lower poverty,
while illiteracy, income inequality, and macroeconomic
volatility tend to increase poverty. In addition, the impact
of growth on poverty appears to be asymmetric, and to result
from a significant relationship between episodes of
increasing poverty and negative growth rates. |
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