Skip to Main Navigation

Accelerating poverty reduction in a less poor world : the roles of growth and inequality (English)

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.


  • Author

    Lara Ibarra,Gabriel, Olinto,Pedro, Saavedra Chanduvi,Jaime

  • Document Date


  • Document Type

    Policy Research Working Paper

  • Report Number


  • Volume No


  • Total Volume(s)


  • Country


  • Region

    The World Region,

  • Disclosure Date


  • Disclosure Status


  • Doc Name

    Accelerating poverty reduction in a less poor world : the roles of growth and inequality

  • Keywords

    growth in income per capita;Growth Elasticity of Poverty;impact on poverty reduction;policy for poverty reduction;poverty does;average monthly income;time lag;inequality and growth;observed poverty reduction;information on poverty;Poverty & Inequality;drop in poverty;cambridge university press;effect inequality;median poverty line;international comparison program;high poverty line;measure of poverty;living in poverty;natural resource availability;estimation of equation;headcount rate;income growth;inequality elasticity;negative relationship;poverty decline;disturbance term;inequality reduction;Poverty measures;income elasticity;horizontal axis;inequality on growth;reducing inequality;survey data;estimated elasticity;empirical estimate;standard deviation;0 hypothesis;graphical representation;headcount poverty;summary statistic;data availability;estimation method;social inclusion;dynamic model;endogenous regressor;agricultural economist;empirical estimation;poverty gap;observed value;relative magnitude;development policy;linear projection;poverty standard;transition country;transition countries;global population;upward mobility;unobserved characteristic;poverty trend;empirical study;open access;abject poverty;headcount index;increased inequality;standard error;random sample;panel data;poverty growth;explanatory power;poverty affect;measure of use;initial value;linear approximation;targeted intervention;richer countries;inequality change;econometric model;fixed effect;Public Services;rural area;sectoral growth;simulation model;nonlinear effect;poverty change;income inequality;lagged value;empirical model;consumption measure;gross income;rising inequality;generating growth;reduction measure;instrumental variable;lagged dependent;level of change;increasing function;income share;log normal;increasing growth;unbalanced panel;Command economy;conservative approach;household survey;arbitrary choice;endogenous variable;negative effect;higher inequality;log-normality assumption;



Official version of document (may contain signatures, etc)

  • Official PDF
  • TXT*
  • Total Downloads** :
  • Download Stats
  • *The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.


Lara Ibarra,Gabriel Olinto,Pedro Saavedra Chanduvi,Jaime

Accelerating poverty reduction in a less poor world : the roles of growth and inequality (English). Policy Research working paper ; no. WPS 6855 Washington, D.C. : World Bank Group.