IDEAS home Printed from https://ideas.repec.org/a/spr/soinre/v141y2019i2d10.1007_s11205-018-1858-7.html
   My bibliography  Save this article

Economic Growth, Inequality and Poverty in the EU

Author

Listed:
  • Anton Michálek

    (Institute of Geography of the Slovak Academy of Sciences)

  • Ján Výbošťok

    (Institute of Geography of the Slovak Academy of Sciences)

Abstract

A country’s poverty rate is influenced by numerous factors, including economic growth and the distribution of its effects. This article aims to classify European Union (EU) member states in terms of their ability to handle the economic challenges of the past decade. A country’s ability to negotiate global challenges in conjunction with their respective social and economic growth, as well as that of the EU, represents a key classification attribute. In this article, classification is based on an analysis of changes in economic growth, inequality and poverty across all 28 EU member states. The classification emerges from monitoring trends in economic growth and inequality, and their interconnections with poverty across the different countries. In order to analyse these interactions, this investigates uses the Bourguignon model (Poverty-Growth-Inequality Triangle–PGI) and the Growth Incidence Curve. The article reveals that economic growth is connected with a decrease in poverty. However, as inequalities in income increase, poverty also increases. Nevertheless, rates of development differ across countries. Four broad categories of country sharing similar attributes are defined, and an additional, special category assigned to Greece owing to its distinctive attributes. These partial classifications facilitated the complex classification of the EU member states, by which different development tendencies across the countries in the period 2005–2015 might be deciphered. By analysing the relationships between gross domestic product, income distribution and poverty rates, and by developing a system by which to classify countries, essential information regarding individual countries’ economic and social development is revealed, with implications for their distinctive challenges in reducing inequality and poverty. The article also highlights considerable diversity in countries’ relative abilities to handle a range of unfavourable global trends, such as the recent global financial crisis. In general, countries with strong economies are better able to weather challenges such as inequality and poverty during a period of crisis.

Suggested Citation

  • Anton Michálek & Ján Výbošťok, 2019. "Economic Growth, Inequality and Poverty in the EU," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(2), pages 611-630, January.
    • Handle: RePEc:spr:soinre:v:141:y:2019:i:2:d:10.1007_s11205-018-1858-7
    DOI: 10.1007/s11205-018-1858-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11205-018-1858-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11205-018-1858-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Funke, Michael & Strulik, Holger, 1999. "Regional growth in West Germany: convergence or divergence?," Economic Modelling, Elsevier, vol. 16(4), pages 489-502, December.
    2. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    3. Adams, Richard Jr., 2004. "Economic Growth, Inequality and Poverty: Estimating the Growth Elasticity of Poverty," World Development, Elsevier, vol. 32(12), pages 1989-2014, December.
    4. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    5. Muhammad Khan & Muhammad Khan & Khalid Zaman & Umar Hassan & Sobia Umar, 2014. "Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2631-2646, September.
    6. Francisco Azpitarte, 2014. "Was Pro-Poor Economic Growth in Australia for the Income-Poor? And for the Multidimensionally-Poor?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 871-905, July.
    7. Mr. Garbis Iradian, 2005. "Inequality, Poverty, and Growth: Cross-Country Evidence," IMF Working Papers 2005/028, International Monetary Fund.
    8. Edinaldo Tebaldi & Jongsung Kim, 2015. "Is Income Growth in the United States Pro-Poor? A State-Level Analysis," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 41(2), pages 251-272, March.
    9. Francois Bourguignon, 2004. "The Poverty-growth-inequality triangle," Indian Council for Research on International Economic Relations, New Delhi Working Papers 125, Indian Council for Research on International Economic Relations, New Delhi, India.
    10. Sebastian Leitner & Robert Stehrer, 2014. "Drivers of Inequality and Poverty in the CEE and other EU Member States," wiiw Research Reports 398, The Vienna Institute for International Economic Studies, wiiw.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aadil Hameed Shah & Atta Ullah Khan & Liurong Pan & Asad Amin & Abbas Ali Chandio, 2022. "Reflections of Pro-Poor Growth across Agro-Climatic Zones for Farming and Non-Farming Communities: Evidence from Punjab, Pakistan," IJERPH, MDPI, vol. 19(9), pages 1-16, May.
    2. Dörffel, Christoph & Freytag, Andreas, 2023. "The poverty effect of democratization," World Development, Elsevier, vol. 165(C).
    3. Daniele Malerba, 2018. "How to reduce poverty and address climate change? An empirical cross-country analysis and the roles of economic growth and inequality," Global Development Institute Working Paper Series 322018, GDI, The University of Manchester.
    4. Khalid Zaman & Sadaf Shamsuddin, 2018. "Linear and Non-linear Relationships Between Growth, Inequality, and Poverty in a Panel of Latin America and the Caribbean Countries: A New Evidence of Pro-poor Growth," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(2), pages 595-619, April.
    5. Amponsah, Mary & Agbola, Frank W. & Mahmood, Amir, 2023. "The relationship between poverty, income inequality and inclusive growth in Sub-Saharan Africa," Economic Modelling, Elsevier, vol. 126(C).
    6. Desire Avom & Fabrizio Carmignani & Abdour Chowdhury, "undated". "Four Scenarios of Poverty Reduction and the Role of Economic Policy," MRG Discussion Paper Series 3109, School of Economics, University of Queensland, Australia.
    7. Ferreira , Francisco H. G., 2010. "Distributions in motion: economic growth, inequality, and poverty dynamics," Policy Research Working Paper Series 5424, The World Bank.
    8. -, 2015. "La economía del cambio climático en América Latina y el Caribe: paradojas y desafíos del desarrollo sostenible," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37310 edited by Cepal, May.
    9. Ismael Ahamdanech & Carmelo García-Pérez & Mercedes Prieto-Alaiz, 2020. "A Stochastic Dominance Approach to Evaluating Pro-Poor Growth—An Application to the Spanish Case," Sustainability, MDPI, vol. 12(5), pages 1-16, February.
    10. Isabel Günther & Mohamed Ali Marouani & Marc Raffinot, 2006. "La croissance est-elle pro-pauvres au Mali ?," Working Papers DT/2006/15, DIAL (Développement, Institutions et Mondialisation).
    11. Vincenzo Lombardo, 2011. "Growth and Inequality Effects on Poverty Reduction in Italy," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 241-280.
    12. Bluhm, Richard & de Crombrugghe, Denis & Szirmai, Adam, 2018. "Poverty accounting," European Economic Review, Elsevier, vol. 104(C), pages 237-255.
    13. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "Quality of Growth Empirics: Comparative gaps, benchmarking and policy syndromes," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 861-882.
    14. Klump, Rainer & Prüfer, Patricia, 2005. "How to prioritise policies for poverty reduction: Applying Bayesian Model Averaging to Vietnam," Proceedings of the German Development Economics Conference, Kiel 2005 27, Verein für Socialpolitik, Research Committee Development Economics.
    15. Francisco J. Beltran Tapia & Julio Martinez-Galarrage, 2015. "Inequality and poverty in a developing economy: Evidence from regional data (Spain, 1860-1930)," Working Papers 0078, European Historical Economics Society (EHES).
    16. Ali Hashemi, 2016. "Measuring Pro-Poor Growth in Egypt, Jordan, and Palestine," Working Papers 1008, Economic Research Forum, revised Jun 2016.
    17. Kouadio, Hugues Kouassi & Gakpa, Lewis-Landry, 2022. "Do economic growth and institutional quality reduce poverty and inequality in West Africa?," Journal of Policy Modeling, Elsevier, vol. 44(1), pages 41-63.
    18. Muhammad Khan & Muhammad Khan & Khalid Zaman & Umar Hassan & Sobia Umar, 2014. "Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2631-2646, September.
    19. Hichem AYAD, 2016. "Poverty, Inequality And Economic Growth In Algeria: An Ardl Approach," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 5(1), pages 1-20, JULY.
    20. Sirilius Seran, 2019. "Social Economic Status to the Number of Life Expectancy," International Journal of Economics and Financial Issues, Econjournals, vol. 9(4), pages 166-171.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:soinre:v:141:y:2019:i:2:d:10.1007_s11205-018-1858-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.