Growth is Good for the Poor

Abstract

Average incomes of the poorest quintile rise proportionately with average incomes in a sample of 92 countries spanning the last four decades. This is because the share of income of the poorest quintile does not vary systematically with average income. It also does not vary with many of the policies and institutions that explain growth rates of average incomes, nor does it vary with measures of policies intended to benefit the poorest in society. This evidence emphasizes the importance of economic growth for poverty reduction.

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Dollar, D., Kraay, A. Growth is Good for the Poor. Journal of Economic Growth 7, 195–225 (2002). https://doi.org/10.1023/A:1020139631000

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  • income inequality
  • poverty
  • growth