world bank policy research working paper 2146

World Bank Policy Research Working Papers

This collection is a set of reproducibility packages associated with papers published in the World Bank’s Policy Research Working Paper (PRWP) series. Each package provides the necessary scripts and documentation to reproduce the exact analytical outputs presented in the Working Paper. All packages are verified prior to publication. Details on the reproducibility verification process are available here . Questions about the contents of specific packages should be directed to the authors. General questions should be directed to [email protected].

Growth is Good for the Poor

• Published: September 2002
• Volume 7 , pages 195–225, ( 2002 )

Cite this article

• David Dollar 1 &
• Aart Kraay 1  

14k Accesses

1260 Citations

203 Altmetric

Explore all metrics

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price includes VAT (Russian Federation)

Instant access to the full article PDF.

Rent this article via DeepDyve

Institutional subscriptions

Similar content being viewed by others

Does Household Income Affect children’s Outcomes? A Systematic Review of the Evidence

The Relationship Between Income Inequality and Economic Growth: Are Transmission Channels Effective?

Does financial inclusion reduce poverty and income inequality in developing countries a panel data analysis.

Ali, A. G. A., and I. Elbadawi. (2001). “Growth Could Be Good for the Poor,” Manuscript, Arab Planning Institute and the World Bank.

Aitchinson, J., and J. A. C. Brown. (1966). The Lognormal Distribution . Cambridge: Cambridge University Press.

Google Scholar  

Agenor, P.-R. (1998). “Stabilization Policies, Poverty, and the Labour Market,” Manuscript, International Monetary Fund and the World Bank.

Alesina, A., and D. Rodrik. (1994). “Distributive Politics and Economic Growth,” Quarterly Journal of Economics 109(2), 465–490.

Arellano, M., and O. Bover. (1995). “Another Look at the Instrumental-Variable Estimation of Error-Components Models,” Journal of Econometrics 68, 29–52.

Atkinson, A. B., and A. Brandolini. (1999). “Promise and Pitfalls in the Use of ‘secondary’ Data-Sets: Income Inequality in OECD Countries,” Manuscript. Nuffield College, Oxford and Banca d'Italia: Research Department.

Beck, T., A. Demirguc-Kunt, and Ross Levine. (1999). “A New Database on Financial Development and Structure,” World Bank Policy Research Department Working Paper No. 2146.

Banerjee, A. V., and E. Duflo. (1999). “Inequality and Growth: What Can the Data Say?” Manuscript, MIT.

Barro, R. J. (2000). “Inequality and Growth in a Panel of Countries,” Journal of Economic Growth 5, 5–32.

Barro, R. J., and J.-W. Lee. (2000). “International Data on Educational Attainment: Updates and Implications,” Harvard University Center for International Development Working Paper No. 42.

Bidani, B., and M. Ravallion. (1997). “Decomposing Social Indicators Using Distributional Data,” Journal of Econometrics 77, 125–139.

Bils, M., and P. Klenow. (2000). “Does Schooling Cause Growth?” American Economic Review 90(5), 1160–1183.

Blundell, R., and S. Bond. (1998). “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models,” Journal of Econometrics 87, 115–143.

Chen, S., and M. Ravallion. (1997). “What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?” The World Bank Economic Review 11(2), 357–382.

Chen, S., and M. Ravallion. (2000). “How Did the World's Poorest Fare in the 1990s?” Manuscript, the World Bank. Data and paper available at http, //www.worldbank.org/research/povmonitor/.

Datt, G., and M. Ravallion. (1999). “When is Growth Pro-Poor?” Manuscript, The World Bank.

Deininger, K., and L. Squire. (1996). “A New Data Set Measuring Income Inequality,” The World Bank Economic Review 10(3), 565–591.

Easterly, W. (1999). “Life During Growth,” Journal of Economic Growth 4, 239–276.

Easterly, W. (2001). “The Middle-Class Consensus and Economic Development,” Journal of Economic Growth 6, 317–335.

Easterly, W., and S. Fischer. (2000). “Inflation and the Poor,” World Bank Policy Research Department Working Paper No. 2335.

Easterly, W., and S. T. Rebelo. (1993). “Fiscal Policy and Economic Growth: An Empirical Investigation,” Journal of Monetary Economics 32(3), 417–458.

Edwards, S. (1997). “Trade Policy, Growth, and Income Distribution,” American Economic Review 87(2), 205–210.

Filmer, D., and L. Pritchett. (1997). “Child Mortality and Public Spending on Health: How Much Does Money Matter?” Policy Research Working Paper No. 1864, The World Bank.

Fischer, S. (1993). “The Role of Macroeconomic Factors in Growth,” Journal of Monetary Economics 32(3), 485–512.

Forbes, K. J. (2000). “A Reassessment of the Relationship between Inequality and Growth,” American Economic Review 90(4), 869–897.

Foster, J., and M. Székely. (2001). “Is Economic Growth Good for the Poor? Tracking Low Incomes Using General Means,” Interamerican Development Bank Research Department Working Paper No. 453.

Frankel, J. A., and D. Romer. (1999). “Does Trade Cause Growth?” The American Economic Review (June), 379–399.

Gallup, J. L., S. Radelet, and A. Warner. (1998). “Economic Growth and the Income of the Poor,” Manuscript, Harvard Institute for International Development.

Galor, O., and J. Zeira. (1993). “Income Distribution and Macroeconomics,” Review of Economic Studies 60(1), 35–52.

Galor, O., and O. Moav. (2001). “From Physical to Human Capital Accumulation: Inequality and the Process of Development,” Brown University Working Paper 99–27.

Gouyette, C., and P. Pestieau. (1999). “Efficiency of the Welfare State,” Kyklos 52, 537–553.

Johnston, N, S. Kotz, and N. Balakrishnan. (1994). Continuous Univariate Distributions 2 edn, Vol. 2, New York: Wiley.

Kaufmann, D., A. Kraay, and P. Zoido-Lobatón. (1999). “Governance Matters,” World Bank Policy Research Department Working Paper No. 2196.

Knack, S., and P. Keefer. (1995). “Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Measures,” Economics and Politics 7(3), 207–227.

Kraay, A., and M. Ravallion. (2001). “Measurement Error, Aggregate Growth, and the Distribution-Corrected Mean: A Comment on Foster-Székely,” Manuscript, The World Bank.

Kuznets, S. (1955). “Economic Growth and Income Inequality,” The American Economic Review 45(1), 1–28.

Leamer, E., H. Maul, S. Rodriguez, and P. Schott. (1999). “Does Natural Resource Abundance Increase Latin American Income Inequality?” Journal of Development Economics 59, 3–42.

Levine, R., N. Loayza, and T. Beck. (2000). “Financial Intermediation and Growth: Causality and Causes,” Journal of Monetary Economics 46, 31–77.

Li, H., and H. Zou. (1998). “Income Inequality is not Harmful for Growth: Theory and Evidence,” Review of Development Economics 2(3), 318–334.

Li, H., L. Squire, and H. Zou. (1998). “Explaining International and Intertemporal Variations in Income Inequality,” The Economic Journal 108, 26–43.

Lundberg, M., and L. Squire. (2000). “The Simultaneous Evolution of Growth and Inequality,” Manuscript, The World Bank.

Perotti, R. (1996). “Growth, Income Distribution and Democracy: What the Data Say,” Journal of Economic Growth 1, 149–187.

Persson, T., and G. Tabellini. (1994). “Is Inequality Harmful for Growth?” American Economic Review 84(3), 600–621.

Ravallion, M. (1997). “Can High-Inequality Countries Escape Absolute Poverty?” Economics Letters 56(1), 51–57.

Ravallion, M. (2001a). “Measuring Aggregate Welfare in Developing Countries: How Well do National Accounts and Surveys Agree?” World Bank Policy Research Department Working Paper No. 2665.

Ravallion, M. (2001b). “Growth, Inequality, and Poverty: Looking Beyond Averages,” World Development 29(11), 1803–1815.

Rodriguez, F., and D. Rodrik. (2000). “Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence,” In B. Bernanke, and K. Rogoff (eds), Macroeconomics Annual 2000 , MIT Press for NBER.

Sachs, J. D., and A. Warner. (1995). “Economic Reform and the Process of Global Integration,” Brookings Papers on Economic Activity (1), 1–118.

Spilimbergo, A., J. L. Londono, and M. Szekely. (1999). “Income Distribution, Factor Endowments, and Trade Openness,” Journal of Development Economics 59, 77–101.

Summers, R., and A. Heston. (1991). “The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–88,” Quarterly Journal of Economics 106(2), 327–368.

United Nations University—World Institute for Development Economics Research (2000). World Income Inequality Database. Available online at http://www.wider.unu.edu/wiid/wiid.htm.

Download references

Author information

Authors and affiliations.

Development Research Group, The World Bank, USA

David Dollar & Aart Kraay

You can also search for this author in PubMed   Google Scholar

Rights and permissions

Reprints and permissions

About this article

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

Download citation

Issue Date : September 2002

DOI : https://doi.org/10.1023/A:1020139631000

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• income inequality
• Find a journal
• Publish with us
• Track your research

Policy Research Working Paper series publication roundup for November 16 - 30

Marcelo buitron, policy research working paper team.

This blog is a biweekly feature highlighting recent working papers from around the World Bank Group that were published in the  World Bank’s Policy Research Working Paper Series . This entry introduces four papers published from November 16 to November 30 on various topics, including wage incentives, loan flexibilization and women empowerment.  

The first two papers we introduce conduct fascinating experiments Latin America. In Can Temporary Wage Incentives Increase Formal Employment? Experimental Evidence from Mexico , Eliana Carranza and coauthors experimentally test whether a six-months wage incentive can increase formal employment among secondary school graduates.  In Give Me a Pass : Flexible Credit for Entrepreneurs in Colombia , Xavier Giné and coauthors test the impact that loan flexibility has on revenue, profits and loan defaults.  

Can Temporary Wage Incentives Increase Formal Employment? Experimental Evidence from Mexico tests whether a six-month temporary wage incentive can encourage Mexican secondary school graduates to obtain and stay in formal employment. Combining survey and high-frequency social security data, the paper shows that the incentive increases formal employment among vocational school graduates by 4.2 percentage points driven by a 5 percentage point increase in permanent formal jobs. Figure 1 below shows how treatment effects evolve over time. Among vocational school graduates, large and statistically significant increases in formal employment appear starting in October 2019, approximately four months after students graduate, and are maintained through the beginning of 2020. 

Figure 1: Employment impacts of wage bonus treatment, by school type 

Microcredits have been criticized by their rigidity, specifically the fixed and frequent installments. In Give Me a Pass : Flexible Credit for Entrepreneurs in Colombia the coauthors partnered with a Colombian lender that offered first-time borrowers a flexible loan that permitted delaying up to three monthly repayments. The study finds null effects for revenue and profits but increases in loan defaults. This evidence aligns with established microlender practice of offering rigid contracts to first-time borrowers.  

The next two papers we introduce examine women empowerment in Sub-Saharan Africa. In The Effects of Childcare on Women and Children: Evidence from a Randomized Evaluation in Burkina Faso , Estelle Koussoubé and coauthors study whether providing affordable childcare improves women’s economic empowerment and child development. In Women Empowerment for Poverty and Inequality Reduction in Sudan , Eiman Osman and coauthors examine how gender equality has evolved in Sudan during the last decade.  

Using data from a sample of 1,990 women participating in a public works program in Burkina Faso, The Effects of Childcare on Women and Children: Evidence from a Randomized Evaluation in Burkina Faso studies whether providing affordable childcare improves women’s economic empowerment and child development. Of 36 urban work sites, 18 were randomly selected to receive community-based childcare centers. One in four women who were offered the centers used them, tripling childcare center usage for children aged 0 to 6 years. Women’s employment and financial outcomes improved. Additionally, child development scores increased. However, the analysis finds no significant effects on women’s decision-making autonomy, gender attitudes, or intrahousehold dynamics.  

Women Empowerment for Poverty and Inequality Reduction in Sudan analyses the evolution of gender equality in Sudan during the last decade by taking a look at different dimensions. These dimensions include the accumulation of endowment in all its forms (human capital, education and health, and physical capital), access to economic opportunities, access to services (water, sanitation, and electricity), and voice/representation to make decision at all levels. The paper finds that Sudanese women are poorer than Sudanese men during key productive and reproductive years and appear to suffer greater poverty-related impacts of childcare and divorce. Figure 2 b) below shows how women in Sudan between the age of 25 and 39 are significantly poorer than men, a core period for their productivity and reproductivity.  The paper also finds that when it comes to education, gender gaps are shrinking as the proportion of girls attending primary school and the proportion of boys attending secondary school both continue to increase.  

Figure 2: Male and female poverty rates by location, age groups, and marital status 

The following are other interesting papers published in the second half of November. Please make sure to read them as well.  

• Shocks and Household Welfare in Sudan   
• A Proxy Means Test for Targeted Social Protection Programs in Sudan   
• Towards a More Inclusive Economy : Understanding the Barriers Sudanese Women and Youth Face in Accessing Employment Opportunities   
• Reversing the Trend of Stunting in Sudan : Opportunities for Human Capital Development through Multisectoral Approaches   
• Agricultural Productivity and Poverty in Rural Sudan   
• Interviewer Design Effects in Household Surveys : Evidence from Sudan   
• Wave Reduction by Mangroves during Cyclones in Bangladesh : Implementing Nature-Based Solutions for Coastal Resilience   
• Legacies of Conflict : Experiences, Self-efficacy and the Formation of Conditional Trust   
• Scarcity Nationalism during COVID-19 : Identifying the Impact on Trade Costs   
• Pollution and Labor Productivity : Evidence from Chilean Cities   
• Deconstructing the Missing Middle : Informality and Growth of Firms in Sub-Saharan Africa   
• An Exploration of Climate-Related Financial Risks for Credit Guarantee Schemes in Europe   
• Competitiveness
• Jobs & Development
• Social Protection
• Burkina Faso
• The World Region
• Policy Research Working Paper

Operations Officer

Join the Conversation

• Share on mail
• comments added

Structural Reforms Needed to Sustain Growth Momentum - World Bank Report

Economic activity picked up in China in early 2024, buoyed by stronger exports. Meanwhile, growth in domestic demand moderated. Manufacturing and infrastructure investment and consumer spending on services remained robust, while the property market correction continued, the World Bank said in Growing Beyond Property: Cyclical Lifts and Structural Challenges , the latest China Economic Update released today.

GDP growth is projected at 4.8 percent in 2024, an upward revision of 0.3 percentage points from the December 2023 forecast. The revision reflects stronger-than-expected exports and the impact of policy measures to support the property market and higher fiscal spending.

Risks to the growth outlook are broadly balanced. On the upside, earlier stabilization in the property sector and higher-than-expected fiscal spending could lift growth above the current forecast. Substantial progress on structural reforms, including of the enabling environment for the private sector, could boost short-term confidence and long-run productivity growth. Downside risks include a delay in the property market recovery beyond 2024, persistent deflationary pressures, slower-than-expected global growth, and increased trade tensions.

“Structural reforms could help China both sustain growth momentum in the short term and pursue long-term objectives, ” said Mara Warwick, World Bank Country Director for China, Mongolia, and Korea. “ Policies to accelerate the transition to carbon neutrality could boost demand for green technologies, while debt resolution and exit of unviable firms in the property and other sectors would reduce imbalances and free resources that can be used by more productive businesses. ”

The report also explores the impact of an aging population on growth and inequality in China. China’s rapidly aging population will have wide-ranging economic impacts, but with the right policies the demographic transition is manageable. “The economic challenges from an aging population can be overcome with policies that increase labor force participation and extend productive working lives.,” said Elitza Mileva, World Bank Lead Economist for China. “Affordable childcare, better work-life balance, elimination of gender bias in hiring, a higher retirement age, skills upgrading, and lifelong learning are measures that could expand China’s workforce and make it more productive.”

Download the Report :  Growing Beyond Property: Cyclical Lifts and Structural Challenges

Video:  China Economic Update – June 2024

Website :  World Bank in China

This site uses cookies to optimize functionality and give you the best possible experience. If you continue to navigate this website beyond this page, cookies will be placed on your browser. To learn more about cookies, click here .