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The Elasticity of Poverty with respect to Sectoral Growth in Africa

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  • Nicoletta Berardi
  • Federica Marzo

Abstract

The African continent has grown by more than 4 per cent yearly on average during the past decade. However, the link between this remarkable growth rate and poverty reduction is neither obvious nor simple. This paper focuses on the elasticity of poverty with respect to GDP growth at the sectoral level and takes into account the fact that economic growth may affect poverty directly as well as indirectly through sectoral labor share intensity. It develops a methodology that sheds light on the contribution of sectoral growth to poverty reduction country-by-country in Africa, guiding policy recommendations. As the composition of growth matters at least as much as its overall intensity, it is key to identify the sectors that have the strongest impact on poverty reduction and unleash their potential; if growth happens to concentrate in sectors with scarce pro-poor potential, like commodity-driven growth, redistributive strategies are necessary to compensate the weak effect on poverty.
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  • Nicoletta Berardi & Federica Marzo, 2017. "The Elasticity of Poverty with respect to Sectoral Growth in Africa," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(1), pages 147-168, March.
    • Handle: RePEc:bla:revinw:v:63:y:2017:i:1:p:147-168
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    File URL: http://hdl.handle.net/10.1111/roiw.12203
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    2. Tarlok Singh, 2022. "Economic growth and the state of poverty in India: sectoral and provincial perspectives," Economic Change and Restructuring, Springer, vol. 55(3), pages 1251-1302, August.
    3. Cazzuffi, Chiara & Pereira-López, Mariana & Soloaga, Isidro, 2017. "Local poverty reduction in Chile and Mexico: The role of food manufacturing growth," Food Policy, Elsevier, vol. 68(C), pages 160-185.
    4. Nur Feriyanto & Dityawarman El Aiyubbi & Achmad Nurdany, 2020. "The Impact of Unemployment, Minimum Wage, and Real Gross Regional Domestic Product on Poverty Reduction in Provinces of Indonesia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(10), pages 1088-1099, October.
    5. Duangkamon Chotikapanich & William E. Griffiths & Gholamreza Hajargasht & D. S. Prasada Rao & Charley Xia, 2018. "Inequality and Poverty in Africa: Comparing Panels of Income Distributions from Different Data Sources," Department of Economics - Working Papers Series 2042, The University of Melbourne.
    6. Alaa Mohamd Shoukry & Musarrat Jabeen & Khalid Zaman & Showkat Gani & Alamzeb Aamir, 2018. "A note on poverty, growth, and inequality nexus: evidence from a panel of sub-Saharan African countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2173-2195, September.
    7. Bonacini, Luca, 2020. "Unequal effects of the economic cycle on human capital investment. Evidence from Italian panel data," GLO Discussion Paper Series 733, Global Labor Organization (GLO).
    8. Aleksi Ylönen, 2020. "The Dragon and the Horn: Reflections on China–Africa Strategic Relations," Insight on Africa, , vol. 12(2), pages 145-159, July.
    9. Raymundo M. Campos Vázquez & Luis A. Monroy-Gómez-Franco, 2016. "La relación entre crecimiento económico y pobreza en México," Serie documentos de trabajo del Centro de Estudios Económicos 2016-01, El Colegio de México, Centro de Estudios Económicos.

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    More about this item

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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