Growth, Structural Change, and Poverty Reduction: Evidence from India
AbstractWe examine the relationship between growth in labor productivity and poverty reduction through the lens of changes in the structure of output and employment. Combining state-level data from India on poverty with state-level data on output and employment for 11 production sectors over 1987–2009, we find that the movement of workers from lower to higher productivity sector is an important channel through which increases in aggregate productivity translate into poverty reduction. We also find that the importance of this channel of productivity growth, termed structural change by recent literature, varies across states. Exploratory analysis reveals that indicators of financial development, business regulations that promote competition and flexible labor regulations are associated with larger reallocations of labor from lower to higher productivity sectors. Overall, our findings are consistent with the view that a better investment climate is not only good for business, it is also an important means for making growth more pro-poor in a labor abundant country.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 55247.
Date of creation: Apr 2014
Date of revision:
Labour productivity; Structural change; Poverty reduction;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rodrik, Dani & Subramanian, Arvind, 2004.
"From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition,"
Working Paper Series
rwp04-013, Harvard University, John F. Kennedy School of Government.
- Dani Rodrik & Arvind Subramanian, 2005. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 193-228, September.
- Dani Rodrik & Arvind Subramanian, 2004. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," NBER Working Papers 10376, National Bureau of Economic Research, Inc.
- Rodrik, Dani & Subramanian, Arvind, 2004. "From 'Hindu Growth' to Productivity Surge: The Mystery of the Indian Growth Transition," CEPR Discussion Papers 4371, C.E.P.R. Discussion Papers.
- Cain, J. Salcedo & Hasan, Rana & Magsombol, Rhoda & Tandon, Ajay, 2010. "Accounting for Inequality in India: Evidence from Household Expenditures," World Development, Elsevier, vol. 38(3), pages 282-297, March.
- Barry Bosworth & Susan M. Collins & Arvind Virmani, 2006.
"Sources of Growth in the Indian Economy,"
India Policy Forum,
Global Economy and Development Program, The Brookings Institution, vol. 3(1), pages 1-69.
- Rana Hasan & M.G. Quibria & Yangseon Kim, 2003. "Poverty and Economic Freedom: Evidence from Cross-Country Data," Economics Study Area Working Papers 60, East-West Center, Economics Study Area.
- Datt, Gaurav & Ravallion, Martin, 1998.
"Farm productivity and rural poverty in India,"
FCND discussion papers
42, International Food Policy Research Institute (IFPRI).
- Datt, Gaurav & Ravallion, Martin, 2009.
"Has India's economic growth become more pro-poor in the wake of economic reforms ?,"
Policy Research Working Paper Series
5103, The World Bank.
- Gaurav Datt & Martin Ravallion, 2011. "Has India's Economic Growth Become More Pro-Poor in the Wake of Economic Reforms?," World Bank Economic Review, World Bank Group, vol. 25(2), pages 157-189, February.
- Panagariya, Arvind, 2008.
"India: The Emerging Giant,"
Oxford University Press, number 9780195315035, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.