January 1, 1996The World Bank Economic Review
How Important to India's Poor Is the Sectoral Composition of Economic Growth?
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Discussion
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Implication
Longitudinal analysis reveals primary and tertiary sector expansion reduces poverty in rural and urban populations, indicating that economic growth composition dictates poverty reduction.
Key Points
- Assess how the sectoral output composition and urban-rural distribution of economic growth influence poverty reduction over a forty-year period.
- Analyzed forty years of consistent, consumption-based poverty measures.
- Decomposed national economic growth across urban versus rural geographies and across primary, secondary, and tertiary output sectors.
- Rural consumption growth reduced poverty in both rural and urban areas, whereas urban growth benefited only the urban poor.
- Output expansion in primary and tertiary sectors significantly lowered rural and urban poverty, but secondary sector growth yielded no poverty reduction in either area.
- Population migration from rural to urban areas had no statistically significant impact on poverty reduction.
Cite This Study
Ravallion et al. (1996) studied this question.