Economic Growth, Inequality, and Poverty : Findings from a New Data Set

The author uses new data from 50 developing countries and 101 intervals to examine the impact of economic growth on poverty and inequality. He finds that growth represents an important means for reducing poverty in the developing world. When economic growth is measured by survey mean income (consumption), there is a strong, statistical link between growth and poverty reduction. When economic growth is measured by GDP per capita, the statistical relationship between growth and poverty reduction is still present, albeit not quite as strong. Economic growth reduces poverty because growth has little impact on income inequality. In the data set income inequality rises on average less than 1.0 percent a year. Since income distributions are relatively stable over time, economic growth tends to raise incomes for all members of society, including the poor. When growth is measured by survey mean income (consumption), the elasticity of poverty with respect to growth is -2.59. In other words, on average, a 10 percentage point increase in economic growth (measured by survey mean income) will produce a 25.9 percent decrease in the proportion of people living in poverty ($1 a person a day).

Bibliographic Details

Main Author:	Adams, Richard H., Jr.
Format:	Policy Research Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2003-02
Subjects:	ABSOLUTE POVERTY, ANNUAL RATE, ASSET INEQUALITY, AVERAGE ANNUAL, AVERAGE INCOME, AVERAGE INCOMES, AVERAGE RATE, COUNTRY LEVEL, COUNTRY REGRESSIONS, COVARIANCE MATRIX, CROSS-SECTIONAL DATA, DATA SET, DATA SETS, DEVELOPING COUNTRIES, DEVELOPING WORLD, DEVELOPMENT ECONOMICS, DEVELOPMENT INDICATORS, DEVELOPMENT REPORT, DIFFERENCES IN INCOME, DISTRIBUTION DATA, ECONOMETRIC ANALYSIS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC MANAGEMENT, ECONOMIC REVIEW, ECONOMICS LETTERS, EMPIRICAL FINDINGS, EMPIRICAL STUDIES, ERROR TERM, EXCHANGE RATES, FALLING POVERTY, FIXED EFFECTS, GINI COEFFICIENT, GROSS DOMESTIC PRODUCT, GROWTH ELASTICITY, GROWTH RATE, GROWTH RATES, HEADCOUNT, HEADCOUNT INDEX, HEADCOUNT MEASURE, HEADCOUNT RATIO, HIGH GROWTH, HIGH INEQUALITY, HIGH INEQUALITY COUNTRIES, HIGH-INEQUALITY DEVELOPING COUNTRIES, HOUSEHOLD DATA, HOUSEHOLD EXPENDITURES, HOUSEHOLD SIZE, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, INCOME DISPARITIES, INCOME DISTRIBUTION, INCOME DISTRIBUTION DATA, INCOME DISTRIBUTIONS, INCOME INEQUALITY, INCREASING GROWTH, INCREASING INEQUALITY, INDEPENDENT VARIABLES, INEQUALITY CHANGES, INEQUALITY DATA, INEQUALITY FALLS, INEQUALITY REGRESSIONS, INTERNATIONAL POVERTY LINES, LIVING STANDARDS, LOW INCOME, LOW INCOME COUNTRIES, LOW INEQUALITY, LOW INEQUALITY COUNTRIES, LOW-INCOME COUNTRIES, MEAN CONSUMPTION, MEAN EXPENDITURE, MEAN INCOME, MEAN INCOMES, MEASUREMENT ERROR, MEASURING CHANGES, MEASURING INCOME, MEASURING INCOME INEQUALITY, MIDDLE INCOME, NATIONAL ACCOUNTS, OBSERVED CHANGES, OLD ISSUES, PER CAPITA GROWTH, PER CAPITA INCOME, PERSONAL INCOME, POINT ESTIMATE, POINT ESTIMATES, POLICY DEBATES, POLICY ISSUES, POLICY RESEARCH, POOR PEOPLE, POOR PERSON, POVERTY, POVERTY GAP, POVERTY HEADCOUNT, POVERTY LINE, POVERTY LINES, POVERTY MEASURE, POVERTY MEASURES, POVERTY MONITORING, POVERTY REDUCTION, PURCHASING POWER, PURCHASING POWER PARITY, RAPID GROWTH, REDUCING POVERTY, RURAL POVERTY, SERIES DATA, SIGNIFICANT EFFECT, SQUARED POVERTY GAP, UNDERDEVELOPED COUNTRIES, SURVEYING INSTRUMENTS, CONSUMPTION SURVEYS, STATISTICAL MEASURES, MEAN VALUE THEOREMS,
Online Access:	http://documents.worldbank.org/curated/en/2003/02/2156913/economic-growth-inequality-poverty-findings-new-data-set http://hdl.handle.net/10986/19109
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