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The impact of past growth on poverty in Chinese provinces

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  • Chambers, Dustin
  • Wu, Ying
  • Yao, Hong

Abstract

The impact of prior economic growth on current poverty rates within provincial-level China is examined using panel data and semiparametric techniques. Results reveal that prior short-run growth raises poverty levels; prior long-run growth increases poverty in slow-growing provinces, while reducing poverty in faster growing provinces. Additionally, there is an inverted U-shaped relationship between poverty and income; i.e. at lower income levels, the poverty rate increases with income, while the opposite holds at higher income levels. However, higher savings rates or higher income inequality makes this tradeoff less favorable. Interestingly, many traditional poverty explanatory variables lack explanatory power after taking into account the impact of prior growth.

Suggested Citation

  • Chambers, Dustin & Wu, Ying & Yao, Hong, 2008. "The impact of past growth on poverty in Chinese provinces," Journal of Asian Economics, Elsevier, vol. 19(4), pages 348-357, August.
  • Handle: RePEc:eee:asieco:v:19:y:2008:i:4:p:348-357
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    References listed on IDEAS

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    1. Pagan,Adrian & Ullah,Aman, 1999. "Nonparametric Econometrics," Cambridge Books, Cambridge University Press, number 9780521355643, December.
    2. Dhongde, Shatakshee, 2004. "Decomposing Spatial Differences in Poverty in India," WIDER Working Paper Series 053, World Institute for Development Economic Research (UNU-WIDER).
    3. Neutel, Marcel & Heshmati, Almas, 2006. "Globalisation, Inequality and Poverty Relationships: A Cross Country Evidence," IZA Discussion Papers 2223, Institute for the Study of Labor (IZA).
    4. Chambers, Dustin, 2007. "Trading places: Does past growth impact inequality?," Journal of Development Economics, Elsevier, pages 257-266.
    5. Fan, Yanqin & Ullah, Aman, 1999. "Asymptotic Normality of a Combined Regression Estimator," Journal of Multivariate Analysis, Elsevier, vol. 71(2), pages 191-240, November.
    6. Li, Bingqin & Piachaud, David, 2004. "Poverty and inequality and social policy in China," LSE Research Online Documents on Economics 6303, London School of Economics and Political Science, LSE Library.
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    Cited by:

    1. Cielito F. Habito, 2010. "Patterns of Inclusive Growth in Developing Asia: Insights from an Enhanced Growth-Poverty Elasticity Analysis," Working Papers id:3076, eSocialSciences.

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