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The Effect of the Sectoral Composition of Economic Growth on Rural and Urban Poverty

Rui Benfica () and Heath Henderson

No 277278, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

Abstract: We examine the relationship between the sectoral composition of economic growth and the rural-urban composition of poverty. To this end, we use a new cross-country panel dataset consisting of 146 rural and urban poverty spells for 71 low- and middle-income countries. We find that rural (urban) poverty is highly responsive to agricultural (non-agricultural) productivity growth. The effect of agricultural productivity growth on rural poverty is particularly strong for countries with little dependence on natural resources. We also find that growth in the share of employment in the non-agricultural sector (i.e., structural transformation) reduces rural poverty, most notably for countries with a low initial level of development. These findings are robust to changes in key assumptions, including using alternative poverty lines. Finally, we use our estimates to examine the historical contribution of different sources of economic growth to rural and urban poverty reduction. Acknowledgement : We acknowledge the International Fund for Agricultural Development for supporting this research.

Keywords: Food; Security; and; Poverty (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev
Date: 2018-07
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae18:277278

DOI: 10.22004/ag.econ.277278

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