Growth Still is Good for the Poor

35 Pages Posted: 20 Apr 2016

See all articles by David Dollar

David Dollar

World Bank - Development Economics Group (DEC)

Tatjana Kleineberg

Yale University

Aart Kraay

World Bank - Development Research Group (DECRG)

Date Written: August 1, 2013

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.

Keywords: Achieving Shared Growth, Inequality, Emerging Markets, Economic Theory & Research, Economic Growth

Suggested Citation

Dollar, David and Kleineberg, Tatjana and Kraay, Aart, Growth Still is Good for the Poor (August 1, 2013). World Bank Policy Research Working Paper No. 6568. Available at SSRN: https://ssrn.com/abstract=2309849

David Dollar (Contact Author)

World Bank - Development Economics Group (DEC) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Tatjana Kleineberg

Yale University

New Haven, CT 06520
United States

Aart Kraay

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-5756 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/akraay

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