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Do poverty traps exist ?

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  • Kraay, Aart
  • McKenzie, David

Abstract

This paper reviews the empirical evidence on the existence of poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor. Poverty traps have captured the interest of many development policy makers, because poverty traps provide a theoretically coherent explanation for persistent poverty. They also suggest that temporary policy interventions may have long-term effects on poverty. However, a review of the reduced-form empirical evidence suggests that truly stagnant incomes of the sort predicted by standard models of poverty traps are in fact quite rare. Moreover, the empirical evidence regarding several canonical mechanisms underlying models of poverty traps is mixed.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6835.

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Date of creation: 01 Apr 2014
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Handle: RePEc:wbk:wbrwps:6835

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Related research

Keywords: Rural Poverty Reduction; Achieving Shared Growth; Economic Theory&Research; Debt Markets; Poverty Reduction Strategies;

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References

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  2. David McKenzie & John Gibson & Steven Stillman, 2010. "How Important Is Selection? Experimental vs. Non-Experimental Measures of the Income Gains from Migration," Journal of the European Economic Association, MIT Press, vol. 8(4), pages 913-945, 06.
  3. Michelle Adato & Michael Carter & Julian May, 2006. "Exploring poverty traps and social exclusion in South Africa using qualitative and quantitative data," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 226-247.
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  7. Antman, Francisca & McKenzie, David J., 2005. "Poverty traps and nonlinear income dynamics with measurement error and individual heterogeneity," Policy Research Working Paper Series 3764, The World Bank.
  8. Quah, Danny T, 1997. " Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," Journal of Economic Growth, Springer, vol. 2(1), pages 27-59, March.
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  12. Robert Lucas & Sari Kerr, 2013. "Intergenerational income immobility in Finland: contrasting roles for parental earnings and family income," Journal of Population Economics, Springer, vol. 26(3), pages 1057-1094, July.
  13. Banerjee, Abhijit & Duflo, Esther & Glennerster, Rachel & Kinnan, Cynthia, 2013. "The miracle of microfinance? Evidence from a randomized evaluation," CEPR Discussion Papers 9437, C.E.P.R. Discussion Papers.
  14. Kraay, Aart & Raddatz, Claudio, 2007. "Poverty traps, aid, and growth," Journal of Development Economics, Elsevier, vol. 82(2), pages 315-347, March.
  15. Lybbert, Travis J. & Barrett, Christopher B. & Desta, Solomon & Coppock, D. Layne, 2002. "Stochastic Wealth Dynamics And Risk Management Among A Poor Population," Working Papers 14736, Cornell University, Department of Applied Economics and Management.
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  1. Y a-t-il des trappes à pauvreté ?
    by ? in D'un champ l'autre on 2014-04-11 23:57:00

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