Growth, Poverty, and Inequality: A Regional Panel

41 Pages Posted: 20 Apr 2016

Date Written: March 1999

Abstract

Empirical work in Bangladesh shows that growth reduces poverty in both urban and rural areas - and is associated with rising inequality only in urban areas. It appears that promoting growth in rural areas rather than urban areas would reduce poverty more. Most empirical work on how growth affects poverty and inequality has been based on international panel data sets.

Panels can also be used within a country, if the analysis is carried out at the regional level. Wodon does this for Bangladesh, where regional panel estimates indicate that growth reduces poverty in both urban and rural areas. Growth is associated with rising inequality only in urban areas. Simulations based on these estimates indicate how much poverty reduction could increase in the next 10 years if growth were promoted in rural areas rather than urban areas.

This paper - a product of the Poverty Reduction and Economic Management Sector Unit, South Asia Region - was written as part of background work for the Bangladesh poverty assessment.

Keywords: growth, poverty, inequality, Bangladesh, panel data

JEL Classification: I32, D63, O40

Suggested Citation

Wodon, Quentin T., Growth, Poverty, and Inequality: A Regional Panel (March 1999). Available at SSRN: https://ssrn.com/abstract=620586

Quentin T. Wodon (Contact Author)

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States
202-473-1446 (Phone)
202-522-0054 (Fax)