EconPapers    
Economics at your fingertips  
 

The Effect of Microenterprises on Poverty: A Cross-county Analysis on US Urban Poverty

J. G. Sri Ranjith
Additional contact information
J. G. Sri Ranjith: Department of Economics and Statistics, University of Peradeniya, Peradeniya (20400), Sri Lanka

International Journal of Economics and Empirical Research (IJEER), 2015, vol. 3, issue 3, 128-150

Abstract: Purpose: This paper empirically tests the effectiveness of microenterprises among other factors as an economic development strategy/tool for the alleviation of poverty in the urban counties of US. Methodology: The conceptual framework is based on a poverty estimation model for the U.S.constructed by Levernier et al.(2000). This model is expanded by adding two microenterprise variables; non-employers and establishments with 1-4 employees, as determinants of the U.S.urban poverty rate at the county level. These two variables are considered for testing their hypothesized negative association with poverty rate across urban counties. Findings: The estimation results show that non-employer microenterprise is less effective in reducing poverty in all of the spatial dimensions except for suburban counties. However, microenterprise with 1-4 employees is clearly an effective option in reducing urban poverty. It is also found that spatial dependency bias is present and therefore corrected. Because of positive association of non-employers with the poverty rate, a separate model is constructed for non-employers to measure its effect on income inequality. The results show non-employers are positively related to income inequality as well. Recommendations: Nevertheless, this result does not necessarily indicate non-employers perform unsatisfactorily and nor does it mean to discourage them.

Keywords: Poverty; Microenterprises (search for similar items in EconPapers)
JEL-codes: P46 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://tesdo.org/shared/upload/pdf/papers/IJEER,%203_3_,%20128-150%20.pdf (application/pdf)
http://tesdo.org/journal_detail.php?paper_id=142&expand_year=2015 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ijr:journl:v:3:y:2015:i:3:p:128-150

Access Statistics for this article

International Journal of Economics and Empirical Research (IJEER) is currently edited by Dr. Muhammad Shahbaz (PhD Applied Economics)

More articles in International Journal of Economics and Empirical Research (IJEER) from The Economics and Social Development Organization (TESDO) Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Muhammad Shahbaz (PhD Applied Economics) ().

 
Page updated 2019-12-11
Handle: RePEc:ijr:journl:v:3:y:2015:i:3:p:128-150