Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality

This paper re-examines the roles of changes in income and inequality in poverty reduction. The study provides estimates of the relative effects of inequality reduction versus growth promotion in reducing poverty for countries with different levels...

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Main Authors:	Olinto, Pedro, Lara Ibarra, Gabriel, Saavedra-Chanduvi, Jaime
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ABSOLUTE TERMS ABSOLUTE VALUE AVERAGE INCOME AVERAGE INCOMES CHANGES IN POVERTY COUNTRY CHARACTERISTICS COUNTRY EFFECTS COUNTRY SPECIFIC COUNTRY-SPECIFIC EFFECTS DATA AVAILABILITY DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT REPORT DROP IN POVERTY ECONOMETRIC MODEL ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL ESTIMATES EMPIRICAL MODEL EMPLOYMENT EQUATIONS ENDOGENOUS VARIABLES EXPLANATORY POWER FIXED EFFECTS FIXED EFFECTS ESTIMATION GINI COEFFICIENT GINI INDEX GROSS INCOME GROWTH ELASTICITY GROWTH PRO-POOR GROWTH RATE GROWTH THEORY HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD SURVEYS IMPACT ON POVERTY REDUCTION INCOME DISTRIBUTION INCOME ELASTICITY INCOME GROWTH INCOME INEQUALITY INCOME SHARE INCREASED INEQUALITY INCREASING FUNCTION INCREASING GROWTH INEQUALITY CHANGES INEQUALITY ELASTICITIES INEQUALITY ELASTICITY INEQUALITY MEASURES INEQUALITY REDUCTION LAGGED DEPENDENT LAGGED VALUES LINEAR MODEL LOG NORMAL LOG-NORMALITY ASSUMPTION LOW POVERTY RATES MACROECONOMIC PERFORMANCE MARGINAL COST MARGINAL COSTS MARKET ECONOMIES MEAN INCOME MEDIAN POVERTY NATURAL RESOURCES NEGATIVE EFFECT NEGATIVE RELATIONSHIP NET INCOME 0 HYPOTHESIS OBSERVED POVERTY REDUCTION OBSERVED VALUE POLICY DESIGN POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY RESEARCH POVERTY CHANGES POVERTY DECLINES POVERTY GAP POVERTY GROWTH POVERTY LEVELS POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY RATE POVERTY RATES POVERTY REDUCTION POWER PARITY PRO-POOR GROWTH RANDOM EFFECTS REAL INCOME REDUCING INEQUALITY REDUCING POVERTY RELATIVE IMPORTANCE RISING INEQUALITY RURAL AREAS SIGNIFICANT EFFECT SIGNIFICANT NEGATIVE STANDARD DEVIATION TRANSITION COUNTRIES
Online Access:	http://documents.worldbank.org/curated/en/2014/05/19457702/accelerating-poverty-reduction-less-poor-world-roles-growth-inequality http://hdl.handle.net/10986/18347

id	okr-10986-18347
recordtype	oai_dc
spelling	okr-10986-183472021-04-23T14:03:44Z Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality Olinto, Pedro Lara Ibarra, Gabriel Saavedra-Chanduvi, Jaime ABSOLUTE TERMS ABSOLUTE VALUE AVERAGE INCOME AVERAGE INCOMES CHANGES IN POVERTY COUNTRY CHARACTERISTICS COUNTRY EFFECTS COUNTRY SPECIFIC COUNTRY-SPECIFIC EFFECTS DATA AVAILABILITY DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT REPORT DROP IN POVERTY ECONOMETRIC MODEL ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL ESTIMATES EMPIRICAL MODEL EMPLOYMENT EQUATIONS ENDOGENOUS VARIABLES EXPLANATORY POWER FIXED EFFECTS FIXED EFFECTS ESTIMATION GINI COEFFICIENT GINI INDEX GROSS INCOME GROWTH ELASTICITY GROWTH PRO-POOR GROWTH RATE GROWTH THEORY HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD SURVEYS IMPACT ON POVERTY REDUCTION INCOME DISTRIBUTION INCOME ELASTICITY INCOME GROWTH INCOME INEQUALITY INCOME SHARE INCREASED INEQUALITY INCREASING FUNCTION INCREASING GROWTH INEQUALITY CHANGES INEQUALITY ELASTICITIES INEQUALITY ELASTICITY INEQUALITY MEASURES INEQUALITY REDUCTION LAGGED DEPENDENT LAGGED VALUES LINEAR MODEL LOG NORMAL LOG-NORMALITY ASSUMPTION LOW POVERTY RATES MACROECONOMIC PERFORMANCE MARGINAL COST MARGINAL COSTS MARKET ECONOMIES MEAN INCOME MEDIAN POVERTY NATURAL RESOURCES NEGATIVE EFFECT NEGATIVE RELATIONSHIP NET INCOME 0 HYPOTHESIS OBSERVED POVERTY REDUCTION OBSERVED VALUE POLICY DESIGN POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY RESEARCH POVERTY CHANGES POVERTY DECLINES POVERTY GAP POVERTY GROWTH POVERTY LEVELS POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY RATE POVERTY RATES POVERTY REDUCTION POWER PARITY PRO-POOR GROWTH RANDOM EFFECTS REAL INCOME REDUCING INEQUALITY REDUCING POVERTY RELATIVE IMPORTANCE RISING INEQUALITY RURAL AREAS SIGNIFICANT EFFECT SIGNIFICANT NEGATIVE STANDARD DEVIATION TRANSITION COUNTRIES This paper re-examines the roles of changes in income and inequality in poverty reduction. The study provides estimates of the relative effects of inequality reduction versus growth promotion in reducing poverty for countries with different levels of initial poverty. The analysis uses country panel-data for 1980-2010. The results indicate that, as countries become less poor, inequality-reducing policies are likely to become relatively more effective for poverty reduction than growth-promoting policies. The results indicate that the growth elasticity of poverty reduction either increases or remains constant with the level of initial poverty. Nevertheless, the results also strongly indicate that, as poverty declines, the inequality elasticity of poverty reduction increases faster. Therefore, if the marginal cost of reducing inequality relative to the marginal cost of increasing growth does not increase with lower poverty levels, to accelerate poverty reduction, greater emphasis should be given to equity rather than growth as countries attain higher levels of development. 2014-05-15T16:12:58Z 2014-05-15T16:12:58Z 2014-05 http://documents.worldbank.org/curated/en/2014/05/19457702/accelerating-poverty-reduction-less-poor-world-roles-growth-inequality http://hdl.handle.net/10986/18347 English en_US Policy Research Working Paper;No. 6855 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ABSOLUTE TERMS ABSOLUTE VALUE AVERAGE INCOME AVERAGE INCOMES CHANGES IN POVERTY COUNTRY CHARACTERISTICS COUNTRY EFFECTS COUNTRY SPECIFIC COUNTRY-SPECIFIC EFFECTS DATA AVAILABILITY DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT REPORT DROP IN POVERTY ECONOMETRIC MODEL ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL ESTIMATES EMPIRICAL MODEL EMPLOYMENT EQUATIONS ENDOGENOUS VARIABLES EXPLANATORY POWER FIXED EFFECTS FIXED EFFECTS ESTIMATION GINI COEFFICIENT GINI INDEX GROSS INCOME GROWTH ELASTICITY GROWTH PRO-POOR GROWTH RATE GROWTH THEORY HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD SURVEYS IMPACT ON POVERTY REDUCTION INCOME DISTRIBUTION INCOME ELASTICITY INCOME GROWTH INCOME INEQUALITY INCOME SHARE INCREASED INEQUALITY INCREASING FUNCTION INCREASING GROWTH INEQUALITY CHANGES INEQUALITY ELASTICITIES INEQUALITY ELASTICITY INEQUALITY MEASURES INEQUALITY REDUCTION LAGGED DEPENDENT LAGGED VALUES LINEAR MODEL LOG NORMAL LOG-NORMALITY ASSUMPTION LOW POVERTY RATES MACROECONOMIC PERFORMANCE MARGINAL COST MARGINAL COSTS MARKET ECONOMIES MEAN INCOME MEDIAN POVERTY NATURAL RESOURCES NEGATIVE EFFECT NEGATIVE RELATIONSHIP NET INCOME 0 HYPOTHESIS OBSERVED POVERTY REDUCTION OBSERVED VALUE POLICY DESIGN POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY RESEARCH POVERTY CHANGES POVERTY DECLINES POVERTY GAP POVERTY GROWTH POVERTY LEVELS POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY RATE POVERTY RATES POVERTY REDUCTION POWER PARITY PRO-POOR GROWTH RANDOM EFFECTS REAL INCOME REDUCING INEQUALITY REDUCING POVERTY RELATIVE IMPORTANCE RISING INEQUALITY RURAL AREAS SIGNIFICANT EFFECT SIGNIFICANT NEGATIVE STANDARD DEVIATION TRANSITION COUNTRIES
spellingShingle	ABSOLUTE TERMS ABSOLUTE VALUE AVERAGE INCOME AVERAGE INCOMES CHANGES IN POVERTY COUNTRY CHARACTERISTICS COUNTRY EFFECTS COUNTRY SPECIFIC COUNTRY-SPECIFIC EFFECTS DATA AVAILABILITY DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT REPORT DROP IN POVERTY ECONOMETRIC MODEL ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL ESTIMATES EMPIRICAL MODEL EMPLOYMENT EQUATIONS ENDOGENOUS VARIABLES EXPLANATORY POWER FIXED EFFECTS FIXED EFFECTS ESTIMATION GINI COEFFICIENT GINI INDEX GROSS INCOME GROWTH ELASTICITY GROWTH PRO-POOR GROWTH RATE GROWTH THEORY HEADCOUNT POVERTY HIGHER INEQUALITY HOUSEHOLD SURVEYS IMPACT ON POVERTY REDUCTION INCOME DISTRIBUTION INCOME ELASTICITY INCOME GROWTH INCOME INEQUALITY INCOME SHARE INCREASED INEQUALITY INCREASING FUNCTION INCREASING GROWTH INEQUALITY CHANGES INEQUALITY ELASTICITIES INEQUALITY ELASTICITY INEQUALITY MEASURES INEQUALITY REDUCTION LAGGED DEPENDENT LAGGED VALUES LINEAR MODEL LOG NORMAL LOG-NORMALITY ASSUMPTION LOW POVERTY RATES MACROECONOMIC PERFORMANCE MARGINAL COST MARGINAL COSTS MARKET ECONOMIES MEAN INCOME MEDIAN POVERTY NATURAL RESOURCES NEGATIVE EFFECT NEGATIVE RELATIONSHIP NET INCOME 0 HYPOTHESIS OBSERVED POVERTY REDUCTION OBSERVED VALUE POLICY DESIGN POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY RESEARCH POVERTY CHANGES POVERTY DECLINES POVERTY GAP POVERTY GROWTH POVERTY LEVELS POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY RATE POVERTY RATES POVERTY REDUCTION POWER PARITY PRO-POOR GROWTH RANDOM EFFECTS REAL INCOME REDUCING INEQUALITY REDUCING POVERTY RELATIVE IMPORTANCE RISING INEQUALITY RURAL AREAS SIGNIFICANT EFFECT SIGNIFICANT NEGATIVE STANDARD DEVIATION TRANSITION COUNTRIES Olinto, Pedro Lara Ibarra, Gabriel Saavedra-Chanduvi, Jaime Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality
relation	Policy Research Working Paper;No. 6855
description	This paper re-examines the roles of changes in income and inequality in poverty reduction. The study provides estimates of the relative effects of inequality reduction versus growth promotion in reducing poverty for countries with different levels of initial poverty. The analysis uses country panel-data for 1980-2010. The results indicate that, as countries become less poor, inequality-reducing policies are likely to become relatively more effective for poverty reduction than growth-promoting policies. The results indicate that the growth elasticity of poverty reduction either increases or remains constant with the level of initial poverty. Nevertheless, the results also strongly indicate that, as poverty declines, the inequality elasticity of poverty reduction increases faster. Therefore, if the marginal cost of reducing inequality relative to the marginal cost of increasing growth does not increase with lower poverty levels, to accelerate poverty reduction, greater emphasis should be given to equity rather than growth as countries attain higher levels of development.
format	Publications & Research :: Policy Research Working Paper
author	Olinto, Pedro Lara Ibarra, Gabriel Saavedra-Chanduvi, Jaime
author_facet	Olinto, Pedro Lara Ibarra, Gabriel Saavedra-Chanduvi, Jaime
author_sort	Olinto, Pedro
title	Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality
title_short	Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality
title_full	Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality
title_fullStr	Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality
title_full_unstemmed	Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality
title_sort	accelerating poverty reduction in a less poor world : the roles of growth and inequality
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2014/05/19457702/accelerating-poverty-reduction-less-poor-world-roles-growth-inequality http://hdl.handle.net/10986/18347
_version_	1764440681702490112

Accelerating Poverty Reduction in a Less Poor World : The Roles of Growth and Inequality

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