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The Effects of Location and Sectoral Components of Growth

Author

Listed:
  • Asep Suryahadi

    (SMERU)

  • Daniel Suryadarma
  • Sudarno Sumarto

Abstract

This study extends the literature on the relationship between economic growth and poverty reduction by differentiating growth and poverty into their sectoral compositions and locations. We find that growth in the rural services sector reduces poverty in all sectors and locations. However, in terms of elasticity of poverty, urban services growth has the largest for all sectors except urban agriculture. We also find that rural agriculture growth strongly reduces poverty in the rural agriculture sector, the largest contributor to poverty in Indonesia. This implies that the most effective way to accelerate poverty reduction is by focusing on rural agriculture and urban services growth. In the long run, however, the focus should be shifted to achieving robust overall growth in the services sector.

Suggested Citation

  • Asep Suryahadi & Daniel Suryadarma & Sudarno Sumarto, 2006. "The Effects of Location and Sectoral Components of Growth," Development Economics Working Papers 22550, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:develo:22550
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    File URL: http://www.eaber.org/node/22550
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    Citations

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    Cited by:

    1. Andy Sumner, 2014. "Who are likely to be the future poor in Indonesia? Evidence on primary school non-completion from six rounds of the Demographic and Health Survey, 1991-2012," Working Papers in Economics and Development Studies (WoPEDS) 201406, Department of Economics, Padjadjaran University, revised May 2014.
    2. Andy Sumner & Peter Edward, 2013. "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers in Economics and Development Studies (WoPEDS) 201310, Department of Economics, Padjadjaran University, revised Jun 2013.
    3. Andy Sumner, 2013. "The Evolution Of Education And Health Poverty During Economic Development:The Case Of Indonesia, 1991–2007," Working Papers in Economics and Development Studies (WoPEDS) 201311, Department of Economics, Padjadjaran University, revised May 2013.
    4. Ali, Safdar & Ahmad, Khalil & Ali, Amjad, 2019. "Does Decomposition of GDP Growth Matter for the Poor? Empirical Evidence from Pakistan," MPRA Paper 95666, University Library of Munich, Germany.
    5. World Bank, "undated". "East Asia and Pacific Update, November 2007," World Bank Publications - Reports 33510, The World Bank Group.
    6. Kadir, Kadir & Amalia, Ratna Rizki, 2016. "Economic growth and poverty reduction: the role of the agricultural sector in rural Indonesia," MPRA Paper 95111, University Library of Munich, Germany.
    7. Emine Tahsin & Furkan Börü, 2020. "Structural Transformation, Income Inequality, and Employment Linkages in Turkey’s Regions," Journal of Economy Culture and Society, Istanbul University, Faculty of Economics, vol. 62(62), pages 91-121, December.
    8. bahri, muhamad, 2020. "The impacts of covid-19 on Indonesian poverty and unemployment," SocArXiv mz849, Center for Open Science.
    9. Emine Tahsin & Furkan Börü, 2020. "Structural Transformation, Income Inequality, and Employment Linkages in Turkey’s Regions," Journal of Economy Culture and Society, Istanbul University, Faculty of Economics, vol. 62(0), pages 91-121, December.

    More about this item

    Keywords

    economic growth; poverty; Urban; rural; Indonesia;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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