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Growth still is good for the poor

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  • Dollar, David
  • Kleineberg, Tatjana
  • Kraay, Aart

Abstract

Incomes in the poorest two quintiles on average increase at the same rate as overall average incomes. This is because, in a global dataset spanning 118 countries over the past four decades, changes in the share of income of the poorest quintiles are generally small and uncorrelated with changes in average income. The variation in changes in quintile shares is also small relative to the variation in growth in average incomes, implying that the latter accounts for most of the variation in income growth in the poorest quintiles. These findings hold across most regions and time periods and when conditioning on a variety of country-level factors that may matter for growth and inequality changes. This evidence confirms the central importance of economic growth for poverty reduction and illustrates the difficulty of identifying specific macroeconomic policies that are significantly associated with the relative growth rates of those in the poorest quintiles.

Suggested Citation

  • Dollar, David & Kleineberg, Tatjana & Kraay, Aart, 2013. "Growth still is good for the poor," Policy Research Working Paper Series 6568, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6568
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Aura-t-on éliminé l’extrême pauvreté dans le monde en 2030 ?
      by ? in D'un champ l'autre on 2014-01-15 00:58:00
    2. Comment réduire la pauvreté dans un monde plus riche ?
      by ? in D'un champ l'autre on 2014-05-09 04:34:00
    3. Changement climatique et pauvreté
      by ? in D'un champ l'autre on 2014-12-05 03:39:00

    Citations

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    Cited by:

    1. Jonathan D. Ostry & Andrew Berg & Charalambos G. Tsangarides, 2014. "Redistribución, desigualdad y crecimiento," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 16(30), pages 53-81, January-J.
    2. Richard Bluhm & Denis de Crombrugghe & Adam Szirmai, 2016. "Poverty Accounting. A fractional response approach to poverty decomposition," Working Papers 413, ECINEQ, Society for the Study of Economic Inequality.
    3. cyrine hannafi & Christophe Muller, 2016. "The Poverty-Economic Growth-Health Triangle," EcoMod2016 9587, EcoMod.
    4. Tomas Hellebrandt & Paolo Mauro, 2015. "The Future of Worldwide Income Distribution," LIS Working papers 635, LIS Cross-National Data Center in Luxembourg.
    5. World Bank & International Finance Corporation, 2013. "Doing Business 2014 : Understanding Regulations for Small and Medium-Size Enterprises," World Bank Publications, The World Bank, number 16204, April.
    6. World Bank, 2014. "Prosperity for All / Ending Extreme Poverty : A Note for the World Bank Group Spring Meetings 2014," World Bank Publications, The World Bank, number 17701, April.
    7. Selomane, Odirilwe & Reyers, Belinda & Biggs, Reinette & Tallis, Heather & Polasky, Stephen, 2015. "Towards integrated social–ecological sustainability indicators: Exploring the contribution and gaps in existing global data," Ecological Economics, Elsevier, vol. 118(C), pages 140-146.
    8. Magombeyi, Mercy Tsitsi & Odhiambo, Nicholas Mbaya, 2017. "Dynamic impact of FDI inflows on poverty reduction:Empirical evidence from South Africa," Working Papers 22006, University of South Africa, Department of Economics.
    9. Kelbore, Zerihun Getachew, 2015. "Trade Openness, Structural Transformation, and Poverty Reduction: Empirical Evidence from Africa," MPRA Paper 65537, University Library of Munich, Germany, revised 04 Jul 2015.
    10. repec:eee:wdevel:v:95:y:2017:i:c:p:177-195 is not listed on IDEAS
    11. Asongu, Simplice A. & Odhiambo, Nicholas M., 2017. "Mobile banking usage, quality of growth, inequality and poverty in developing countries," Working Papers 23396, University of South Africa, Department of Economics.
    12. Ligon, Ethan & Sadoulet, Elisabeth, 2017. "Estimating the Relative Benefits of Agricultural Growth on the Distribution of Expenditures," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt3zh92962, Department of Agricultural & Resource Economics, UC Berkeley.
    13. Zorobabel Bicaba & Zuzana Brixiova & Mthuli Ncube, 2016. "Eliminating Extreme Poverty in Africa: Trends, Policies and the Role of International Organizations," SALDRU Working Papers 170, Southern Africa Labour and Development Research Unit, University of Cape Town.
    14. Katsushi S. Imai, 2017. "Roles of Agricultural Transformation in Achieving Sustainable Development Goals on Poverty, Hunger, Productivity, and Inequality," Discussion Paper Series DP2017-26, Research Institute for Economics & Business Administration, Kobe University.
    15. Amrita Saha & Tommaso Ciarli, 2018. "Innovation, Structural Change, and Inclusion. A Cross Country PVAR Analysis," SPRU Working Paper Series 2018-01, SPRU - Science and Technology Policy Research, University of Sussex.
    16. Blanchard, Emily & Willmann, Gerald, 2016. "Trade, education, and the shrinking middle class," Journal of International Economics, Elsevier, vol. 99(C), pages 263-278.
    17. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "Quality of Growth Empirics: Comparative gaps, benchmarking and policy syndromes," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 861-882.
    18. Raymundo M. Campos Vázquez & Luis A. Monroy-Gómez-Franco, 2016. "La relación entre crecimiento económico y pobreza en México," Serie documentos de trabajo del Centro de Estudios Económicos 2016-01, El Colegio de México, Centro de Estudios Económicos.
    19. Rubin, Amir & Segal, Dan, 2015. "The effects of economic growth on income inequality in the US," Journal of Macroeconomics, Elsevier, vol. 45(C), pages 258-273.
    20. Almanzar, Miguel & Torero, Maximo, 2017. "Distributional Effects of Growth and Public Expenditures in Africa: Estimates for Tanzania and Rwanda," World Development, Elsevier, vol. 95(C), pages 177-195.

    More about this item

    Keywords

    Achieving Shared Growth; Inequality; Emerging Markets; Economic Theory&Research; Economic Growth;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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