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GROWTH, INEQUALITY, AND POVERTY: A CAUTIONARY NOTE
Author(s) -
Smolensky Eugene,
Plotnick Robert,
Evenhouse Eirik,
Reilly Siobhan
Publication year - 1994
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1994.tb00060.x
Subject(s) - poverty , economics , inequality , poverty rate , economic inequality , development economics , income inequality metrics , demographic economics , economic growth , mathematics , mathematical analysis
Economic growth had less impact on poverty rates in the 1980s than in the 1960s. Could this be explained by Locke Anderson's observation that the higher median income, the greater the amount of growth needed to achieve a percentage point fall in the poverty rate? No, higher poverty rates are due instead to the rise in income inequality. With higher inequality, however, trickle down could be as effective in the 1990s as it was in the late 1960s. More generally, assessments of anti‐poverty policy must recognize that inequality is as vital to changes in the poverty rate as growth in mean income.