Determinants of Poverty: A Dynamic Panel Data Analysis with Controls for Income Level and Inequality

Abstract

This paper assesses the relationship between poverty on the one hand and economic growth and income inequality on the other hand by utilising a panel data set of 145 economies spanning the period, 1982 to 2017. The Arellano-Bond GMM estimation technique is employed to address the potential endogeneity problem in the regression exercise. In the course of the assessment, controls are effected for different country characteristics namely, income level and the degree of income inequality. Generally, it is found that economic growth and income inequality have a stronger bearing, negatively and positively respectively, on the incidence of poverty in middleincome than in low-income economies. The two variables also appear to have a larger impact in low-income inequality than in high-income inequality economies.

The impact of microfinance on poverty and income inequality in developing countries

“…We also obtained a result for the impact of income inequality on the level of poverty consistent with existing studies (Cardoso 1992; Ravallion 1997; Van Leeuwen and Földvári 2016; Neaime and Gaysset 2018; Sehrawat and Giri, 2016; Leow and Tan 2019). In other words, more equal distribution of income significantly reduces the level of poverty in developing countries.…”

“…The pattern of income distribution has been a major concern among economists in determining a country's income level and development. Hazlewood (1978), House and Killick (1981), Ravallion (1997), Adams (2004), Fosu (2015), Van Leeuwen and Földvári (2016), Neaime and Gaysset (2018), Sehrawat and Giri (2016), and Leow and Tan (2019) examine the relationship between income inequality and poverty. These studies reveal that an increase in income inequality will lead to a significant increase in the poverty level.…”

Determinan Faktor Sosial Dan Ekonomi Terhadap Penurunan Kemiskinan Di Kabupaten Dan Kota Di Provinsi Jawa Barat

“…Ketimpangan pendapatan tinggi akan identik dengan peningkatan kemiskinan. Studi hipotesis dari Leow & Tan, (2019), ketimpangan pendapatan mempengaruhi positif terhadap angka kemiskinan.…”

“…Peningkatan GDPcap menjadi kunci pengentasan kemiskinan (Abdelhak et al, 2012). Penelitian dari Leow & Tan (2019), bahwa pertumbuhan ekonomi yang diproksikan dengan PDRB perkapita berhubungan negatif terhadap tingkat kemiskinan. Menurut Sakinah & Pudjianto, (2018) Kondisi kemiskinan tidak terlepas dari perkembangan PDRB perkapita di setiap daerah Jawa Barat.…”

The changing fortunes of UK retired households, 1977–2017

“…2. Empirical transnational studies, for example, indicate that income inequality has “a stronger worsening impact on poverty in low-income inequality economies…than in high-income inequality economies” (Leow and Tan, 2019, p. 235). In the UK, despite a period of worsening poverty during the 1980s, poverty levels amongst retirement-age households have subsequently declined, despite sustained levels of income inequality (Francis-Devine et al , 2019, p. 19).…”