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Pathways out of poverty during an economic crisis : an empirical assessment of rural Indonesia

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Author Info
McCulloch, Neil
Weisbrod, Julian
Timmer, C. Peter

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Abstract

Most poor people in developing countries still live in rural areas and are primarily engaged in low productivity farming activities. Thus pathways out of poverty are likely to be strongly connected to productivity increases in the rural economy, whether they are realized in farming, in rural nonfarm enterprises, or by way of rural-urban migration. The authors use cross-sectional data from the Central Statistical Board for 1993 and 2002, as well as a panel data set from the Indonesia Family Life Survey for 1993 and 2000, to show which pathways out of poverty were most successful over this period. The findings suggest that increased engagement of farmers in rural nonfarm enterprises is an important route out of rural poverty, but that most of the rural agricultural poor that exit poverty still do so while remaining rural and agricultural. So changes in agricultural prices, wages, and productivity still play a critical role in moving people out of poverty.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4173.

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Date of creation: 01 Mar 2007
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Handle: RePEc:wbk:wbrwps:4173

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Keywords: Rural Poverty Reduction; Population Policies; Achieving Shared Growth; Economic Theory&Research;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
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.:
  1. Datt, Gaurav & Ravallion, Martin, 1998. "Farm productivity and rural poverty in India," FCND discussion papers 42, International Food Policy Research Institute (IFPRI). [Downloadable!]
  2. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank. [Downloadable!]
  3. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October. [Downloadable!] (restricted)
  4. Nomaan Majid, 2004. "Reaching Millennium Goals: How well does agricultural productivity growth reduce poverty?," Employment strategy papers 2004-12, International Labour Office. [Downloadable!]
  5. Deininger, Klaus & Jin, Songqing & Sur, Mona, 2007. "Sri Lanka's Rural Non-Farm Economy: Removing Constraints to Pro-Poor Growth," World Development, Elsevier, vol. 35(12), pages 2056-2078, December. [Downloadable!] (restricted)
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  6. Delgado, Christopher L. & Hopkins, Jane & Kelly , Valerie & Hazell, P. B. R. & McKenna, Anna A. & Gruhn, Peter & Hojjati, Behjat & Sil, Jayashree & Courbois, Claude, 1998. "Agricultural growth linkages in Sub-Saharan Africa:," Research reports 107, International Food Policy Research Institute (IFPRI). [Downloadable!]
  7. Richard Tiffin & Xavier Irz, 2006. "Is agriculture the engine of growth?," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 79-89, 07. [Downloadable!] (restricted)
  8. Haggblade, Steven & Hazell, P. B. R. & Reardon, Thomas, 2002. "Strategies for stimulating poverty-alleviating growth in the rural nonfarm economy in developing countries:," EPTD discussion papers 92, International Food Policy Research Institute (IFPRI). [Downloadable!]
  9. Hazell, P. B. R. & Roell, Ailsa, 1983. "Rural growth linkages: household expenditure patterns in Malaysia and Nigeria," Research reports 41, International Food Policy Research Institute (IFPRI). [Downloadable!]
  10. Ravallion, Martin & Datt, Gaurav, 2002. "Why has economic growth been more pro-poor in some states of India than others?," Journal of Development Economics, Elsevier, vol. 68(2), pages 381-400, August. [Downloadable!] (restricted)
  11. Ravallion, Martin & Huppi, Monika, 1991. "Measuring Changes in Poverty: A Methodological Case Study of Indonesia during an Adjustment Period," World Bank Economic Review, Oxford University Press, vol. 5(1), pages 57-82, January.
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Cited by:
(explanations, 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.)

  1. Corinna Ahlfeld, . "The scapegoat of heterogeneity - How fragmentation influences political decisionmaking," Departmental Discussion Papers 143, University of Goettingen, Department of Economics. [Downloadable!]
  2. Renate Ohr, . "European Monetary Union at Ten: Had the German Maastricht Critics Been Wrong?," Departmental Discussion Papers 141, University of Goettingen, Department of Economics. [Downloadable!]
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