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Growth, Poverty, And Inequality In Latin America: A Causal Analysis, 1970–94

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  • Alain de Janvry
  • Elisabeth Sadoulet

Abstract

Taking advantage of consistent poverty and income inequality data for 12 Latin American countries between 1970 and 1994, we analyze the determinants of changes in the incidence of urban and rural poverty and in Gini coefficients over spells of years, stressing in particular the role of aggregate income growth. We find that income growth reduces urban and rural poverty but not inequality. We also find that income growth is more effective in reducing urban poverty if the levels of inequality and poverty are lower, and the levels of secondary education higher. We show that there is an asymmetry in the impact of growth on poverty and inequality, with recession having strong negative effects on both poverty and inequality. Since growth does not reduce inequality, economic cycles create ratchet effects on the level of inequality. However, post‐structural adjustment growth is quite effective at reducing poverty, particularly if inequality is low.

Suggested Citation

  • Alain de Janvry & Elisabeth Sadoulet, 2000. "Growth, Poverty, And Inequality In Latin America: A Causal Analysis, 1970–94," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 267-287, September.
    • Handle: RePEc:bla:revinw:v:46:y:2000:i:3:p:267-287
    DOI: 10.1111/j.1475-4991.2000.tb00843.x
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    Cited by:

    1. Patrick Guillaumont, 2010. "Assessing the Economic Vulnerability of Small Island Developing States and Least Developed Countries," Post-Print hal-00594797, HAL.
    2. Gustavo Canavire‐Bacarreza & Michael Jetter & Marcos Robles, 2018. "When Does Economic Growth Reduce Poverty and Strengthen the Middle Class? A State‐Level, Sector‐Specific Analysis of Peru," Southern Economic Journal, John Wiley & Sons, vol. 84(4), pages 1067-1087, April.
    3. Catherine KORACHAIS & Patrick GUILLAUMONT, 2008. "When unstable, growth is less pro poor," Working Papers 200827, CERDI.
    4. Aiyemo, Babatunde, 2020. "Recessions and the vulnerable," World Development, Elsevier, vol. 132(C).
    5. Mohamed El Hedi Arouri & Nguyen Viet Cuong, 2018. "On the Impact of Household Asset level and Inequality on Inter-governorate Migration: Evidence from Egypt," Working Papers 1182, Economic Research Forum, revised 12 Apr 2018.
    6. Ramos Carvajal, Carmen & Alvargonzález Rodríguez, Mercedes & Moreno Cuartas, Blanca, 2018. "Determinants of income inequality reduction in the Latin American countries," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    7. Manuel Fernández & Gabriela Serrano, 2022. "New Perspectives on Inequality in Latin America," Documentos CEDE 20295, Universidad de los Andes, Facultad de Economía, CEDE.
    8. Ademola Obafemi YOUNG, 2019. "Why Has Growth Not Trickled Down to the Poor? A Study of Nigeria," Review of European Studies, Canadian Center of Science and Education, vol. 11(1), pages 156-156, December.
    9. Enisan Akinlo, Anthony, 2021. "Dynamic Linkages Between Government-Interventionists’ Policies, Growth, Inequality And Poverty In Nigeria," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 8(2), pages 45-64, June.
    10. Paudel, Jayash, 2021. "Why Are People Energy Poor? Evidence From Ethnic Fractionalization," Energy Economics, Elsevier, vol. 102(C).
    11. Francisco Haces-Fernandez, 2022. "Assessment of the Financial Benefits from Wind Farms in US Rural Locations," JRFM, MDPI, vol. 15(10), pages 1-23, September.
    12. Manoel Bittencourt, 2014. "Economic Growth and Inequality: Evidence from the Young Democracies of South America," International Symposia in Economic Theory and Econometrics, in: Macroeconomic Analysis and International Finance, volume 23, pages 37-58, Emerald Group Publishing Limited.
    13. Sonora, Robert, 2019. "Income Inequality, Poverty, and the Rule of Law: Latin America vs the Rest of the World1," MPRA Paper 91512, University Library of Munich, Germany.
    14. Susana HERRERO-OLARTE & Mateo LOAIZA, 2021. "Structural Or Conjunctural Changes To Reduce Poverty In Ecuador?," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 21(2), pages 19-36.
    15. Amponsah, Mary & Agbola, Frank W. & Mahmood, Amir, 2023. "The relationship between poverty, income inequality and inclusive growth in Sub-Saharan Africa," Economic Modelling, Elsevier, vol. 126(C).
    16. Mohamed Arouri & Nguyen Viet Cuong, 2020. "Wealth inequality and inter-governorate migration: Evidence from Egypt," Progress in Development Studies, , vol. 20(2), pages 119-139, April.
    17. Sara Mota Cardoso & Aurora A. C. Teixeira, 2020. "The Focus on Poverty in the Most Influential Journals in Economics: A Bibliometric Analysis of the “Blue Ribbon” Journals," Poverty & Public Policy, John Wiley & Sons, vol. 12(1), pages 10-42, March.
    18. Bonacini, Luca, 2020. "Unequal effects of the economic cycle on human capital investment. Evidence from Italian panel data," GLO Discussion Paper Series 733, Global Labor Organization (GLO).
    19. Pedro Fandiño, 2022. "The role of social conventions on wage inequality: the Brazilian trajectory and the missed “Great Leveling”," Review of Evolutionary Political Economy, Springer, vol. 3(2), pages 435-455, July.

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