IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwwuw/wuwp213.html
   My bibliography  Save this paper

There is poverty convergence

Author

Listed:
  • Jesus Crespo Cuaresma

    () (Department of Economics, Vienna University of Economics and Business)

  • Stephan Klasen

    () (University of Göttingen)

  • Konstantin M. Wacker

    () (University of Mainz)

Abstract

Martin Ravallion ("Why Don't We See Poverty Convergence?" American Economic Review, 102(1): 504-23; 2012) presents evidence against the existence of convergence in global poverty rates despite convergence in household mean income levels and the close linkage between income growth and poverty reduction. We show that this finding is driven by a specification that demands more than simple convergence in poverty headcount rates and assumes a growth elasticity of poverty reduction, which is well-known to accelerate with low initial poverty levels. If we motivate the poverty convergence equation using an arguably superior growth semi-elasticity of poverty reduction, we find highly significant and robust evidence of convergence in absolute poverty headcount ratios and poverty gaps. Relatedly, we show that the results in Ravallion (2012) are driven by the special income growth and poverty dynamics in Central and Eastern European transition economies that started with low initial poverty rates and thus observed a high elasticity of poverty reduction. Once we control for their abnormal poverty dynamics, we again find robust evidence of global convergence in poverty, even in the original specification by Ravallion (2012).

Suggested Citation

  • Jesus Crespo Cuaresma & Stephan Klasen & Konstantin M. Wacker, 2016. "There is poverty convergence," Department of Economics Working Papers wuwp213, Vienna University of Economics and Business, Department of Economics.
  • Handle: RePEc:wiw:wiwwuw:wuwp213
    Note: PDF Document
    as

    Download full text from publisher

    File URL: http://epub.wu.ac.at/4807/1/wp213.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Carola Grün & Stephan Klasen, 2001. "Growth, income distribution and well‐being in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(2), pages 359-394, July.
    2. Martin Ravallion, 2012. "Why Don't We See Poverty Convergence?," American Economic Review, American Economic Association, vol. 102(1), pages 504-523, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ouyang, Yusi & Shimeles, Abebe & Thorbecke, Erik, 2019. "Revisiting cross-country poverty convergence in the developing world with a special focus on Sub-Saharan Africa," World Development, Elsevier, vol. 117(C), pages 13-28.
    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. Asadullah, M. Niaz & Savoia, Antonio, 2018. "Poverty reduction during 1990–2013: Did millennium development goals adoption and state capacity matter?," World Development, Elsevier, vol. 105(C), pages 70-82.

    More about this item

    Keywords

    poverty convergence; economic growth; poverty trap; transition economies;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwwuw:wuwp213. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics). General contact details of provider: http://www.wu.ac.at/economics/en .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.