Unemployment - poverty trade-offs

Pierre-Richard Agénor ()

No 3297, Policy Research Working Paper Series from The World Bank

Abstract: The author examines the potential trade-offs that may arise between poverty alleviation and unemployment reduction. He discusses various analytical arguments that may provide a rationale for their existence, and uses three alternative methodologies to assess their relevance: a vector autoregression framework (which is applied to Brazil and Chile), cross-country regressions, and simulations with a structural macro model linked to a household survey. Impulse response functions to output and wage shocks indicate no short-run tradeoff. between unemployment and poverty. By contrast, regression results, which control for a variety of determinants of poverty rates across countries, suggest that such a trade-off may indeed exist. Simulations with the structural model show that labor market reforms may induce both short- and long-run trade-offs between the composition of unemployment and the incidence of poverty among household groups.

Keywords: Public Health Promotion; Health Monitoring&Evaluation; Economic Theory&Research; Environmental Economics&Policies; Labor Policies; Environmental Economics&Policies; Health Monitoring&Evaluation; Economic Theory&Research; Achieving Shared Growth; Poverty Assessment (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp and nep-dev
Date: 2004-05-01
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