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

  • McCulloch, Neil
  • Weisbrod, Julian
  • Timmer, C. Peter

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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  1. Jin, Songqing & Deininger, Klaus W. & Sur, Mona, 2005. "Sri Lanka's Rural Non-farm Economy: Removing Constraints to Pro-poor Growth," 2005 Annual meeting, July 24-27, Providence, RI 19280, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. 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.
  3. 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.
  4. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 26(1), October.
  5. Ravallion, Martin & Huppi, Monika, 1991. "Measuring Changes in Poverty: A Methodological Case Study of Indonesia during an Adjustment Period," World Bank Economic Review, World Bank Group, vol. 5(1), pages 57-82, January.
  6. Datt, Gaurav & Ravallion, Martin, 1998. "Farm productivity and rural poverty in India," FCND discussion papers 42, International Food Policy Research Institute (IFPRI).
  7. 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).
  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).
  9. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
  10. 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).
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