Did Growth Become Less Pro-Poor in the 1990s?

12 Pages Posted: 20 Apr 2016

See all articles by Humberto Lopez

Humberto Lopez

World Bank - Research Department

Date Written: June 1, 2006


The author analyzes the stability of the empirical relationship between growth and changes in inequality over time. He concludes that while during the 1970s and 1980s the growth process was not accompanied by increases in inequality, during the 1990s a positive and significant correlation appears in the data. For this decade, he estimates that a 1 percent growth rate would be associated with an increase in the gini coefficient of between .3 to .5 percent. This positive correlation is hidden when one estimates the model without allowing for changes in the relationship over the different decades. The finding is robust to a number of departures from the basic specification including: (1) the use of alternative specifications to isolate decadal shifts; (2) the use of robust estimation techniques that address the potential influence of outliers; (3) restricting the sample to a balanced panel for the 1980s and 1990s to control for changes in the composition of the sample related to the unbalanced nature of the panel; and (4) considering the possibility of fixed effects in the data. The author also explores the impact of this structural change in the rate of poverty reduction and concludes that it is far from negligible.

Suggested Citation

Lopez, Humberto, Did Growth Become Less Pro-Poor in the 1990s? (June 1, 2006). World Bank Policy Research Working Paper No. 3931. Available at SSRN: https://ssrn.com/abstract=917502

Humberto Lopez (Contact Author)

World Bank - Research Department ( email )

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

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