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The Effects of Location and Sectoral Components of Growth

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Author Info

  • Asep Suryahadi

    (SMERU)

  • Daniel Suryadarma
  • Sudarno Sumarto

Abstract

This study extends the literature on the relationship between economic growth and poverty reduction by differentiating growth and poverty into their sectoral compositions and locations. We find that growth in the rural services sector reduces poverty in all sectors and locations. However, in terms of elasticity of poverty, urban services growth has the largest for all sectors except urban agriculture. We also find that rural agriculture growth strongly reduces poverty in the rural agriculture sector, the largest contributor to poverty in Indonesia. This implies that the most effective way to accelerate poverty reduction is by focusing on rural agriculture and urban services growth. In the long run, however, the focus should be shifted to achieving robust overall growth in the services sector.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Development Economics Working Papers with number 22550.

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Date of creation: Jan 2006
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Handle: RePEc:eab:develo:22550

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Related research

Keywords: economic growth; poverty; Urban; rural; Indonesia;

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Cited by:
  1. Andy Sumner & Peter Edward, 2013. "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers in Economics and Development Studies (WoPEDS), Department of Economics, Padjadjaran University 201310, Department of Economics, Padjadjaran University, revised Jun 2013.
  2. Andy Sumner, 2014. "Who are likely to be the future poor in Indonesia? Evidence on primary school non-completion from six rounds of the Demographic and Health Survey, 1991-2012," Working Papers in Economics and Development Studies (WoPEDS), Department of Economics, Padjadjaran University 201406, Department of Economics, Padjadjaran University, revised May 2014.
  3. Andy Sumner, 2013. "The Evolution Of Education And Health Poverty During Economic Development:The Case Of Indonesia, 1991–2007," Working Papers in Economics and Development Studies (WoPEDS), Department of Economics, Padjadjaran University 201311, Department of Economics, Padjadjaran University, revised May 2013.

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