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American Economic Review: Vol. 102 No. 1 (February 2012)

AER Volume. 102, Issue 1 | Previous ArticleNext Article

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Why Don't We See Poverty Convergence?

Article Citation

Ravallion, Martin. 2012. "Why Don't We See Poverty Convergence?." American Economic Review, 102(1): 504-23.

DOI: 10.1257/aer.102.1.504

Abstract

Average living standards are converging among developing countries and faster growing economies see more progress against poverty. Yet we do not find poverty convergence; countries starting with higher poverty rates do not see higher proportionate rates of poverty reduction. The paper tries to explain why. Analysis of a new dataset suggests that, at given mean consumption, high initial poverty has an adverse effect on consumption growth and also makes growth less poverty-reducing. Thus, for many poor countries, the growth advantage of starting out with a low mean is lost due to a high incidence of poverty. (JEL D63, I31, I32, O15)

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Authors

Ravallion, Martin (World Bank)

JEL Classifications

D63: Equity, Justice, Inequality, and Other Normative Criteria and Measurement
I31: General Welfare
I32: Measurement and Analysis of Poverty
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration