Can sustainable poverty reduction be achieved with little or no economic growth? The case of Jamaica

Denis Medvedev, Zafer Mustafaoglu, Andresa Lagerborg () and Michiel Paris

Review of Economics and Institutions, 2013, vol. 4, issue 1

Abstract: Can poverty decline with little growth in real GDP? This paper examines the case of Jamaica, where the poverty headcount halved between 2003 and 2007 despite real per capita GDP growth of just 1.1 percent per year, by analyzing the factors contributing to the observed reduction in poverty using household and labor force surveys. It sets out by providing a sectoral, demographic, and spatial picture of the evolution of poverty and finds that poverty reduction has been broad based, benefitting both rural and urban areas. Nearly three quarters of the poverty reduction is attributed to growth in average household consumption, which outpaced GDP growth due to large remittance inflows, and one quarter to narrowing inequality. In turn, around half of the reduction of inequality is explained by narrowing returns to education and declining sectoral wage gaps.

Keywords: Jamaica; poverty; inequality (search for similar items in EconPapers)
JEL-codes: D31 I32 J31 (search for similar items in EconPapers)
Date: 2013
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