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Growth and Chronic Poverty: Evidence from Rural Communities in Ethiopia

  • Stefan Dercon
  • John Hoddinott
  • Tassew Woldehanna

What keeps some people persistently poor, even in the context of relative high growth? In this article, we explore this question using a 15-year longitudinal data set from Ethiopia. We compare the findings of an empirical growth model with those derived from a model of the determinants of chronic poverty. We ask whether the chronically poor are simply not benefiting in the same way from the same factors that allowed others to escape poverty, or whether there are latent factors that leave them behind? We find that this chronic poverty is associated with several initial characteristics: lack of physical assets, education and ‘remoteness’ in terms of distance to towns or poor roads. The chronically poor appear to benefit from some of the drivers of growth, such as better roads or extension services, in much the same way that the non-chronically poor benefit. However, they appear to have lower growth in this period, related to time-invariant characteristics, and this suggests that they face a considerable growth and standard of living handicap.

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File URL: http://hdl.handle.net/10.1080/00220388.2011.625410
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Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

Volume (Year): 48 (2012)
Issue (Month): 2 (February)
Pages: 238-253

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Handle: RePEc:taf:jdevst:v:48:y:2012:i:2:p:238-253
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  1. Angus Deaton & Salman Zaidi, 1999. "Guidelines for Constructing Consumption Aggregates For Welfare Analysis," Working Papers 217, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  2. Stefan Dercon, 2007. "The impact of roads and agricultural extension on consumption growth and poverty in fifteen Ethiopian villages," Economics Series Working Papers WPS/2007-01, University of Oxford, Department of Economics.
  3. Stefan Dercon, 2004. "Growth and Shocks: evidence from rural Ethiopia," Development and Comp Systems 0409036, EconWPA.
  4. James E. Foster, 2007. "A Class of Chronic Poverty Measures," Vanderbilt University Department of Economics Working Papers 0701, Vanderbilt University Department of Economics.
  5. Stefan Dercon & Cesar Calvo, 2007. "Vulnerability to Poverty," Economics Series Working Papers WPS/2007-03, University of Oxford, Department of Economics.
  6. 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.
  7. Andreou, Elena & Ghysels, Eric & Kourtellos, Andros, 2010. "Regression models with mixed sampling frequencies," Journal of Econometrics, Elsevier, vol. 158(2), pages 246-261, October.
  8. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
  9. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 1-24.
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