Poverty Convergence Clubs

Gustavo Marrero, Angel S. Marrero-Llinares () and Luis Servén ()
Additional contact information
Angel S. Marrero-Llinares: University of La Laguna (CEDESOG)
Luis Servén: CEMFI
Authors registered in the RePEc Author Service: Luis Servén

No 619, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: Global eradication of extreme poverty requires absolute convergence of poverty rates worldwide towards zero. Using data for more than a hundred developing countries over 35 years, we conclude that such goal is likely to remain elusive. Rather than absolute convergence, we find club convergence: countries’ long-run poverty rates cluster into three or four convergence clubs, depending on the specific poverty measure considered. The club-based country classification that results is different from standard classifications based on per capita income. The lowest-poverty club has seen a steady poverty decline, to levels close to zero by the end of the sample period. The intermediate-poverty club(s) exhibit the largest poverty reduction, especially fast since the mid-1990s. In turn, the highest-poverty club, whose member countries comprise almost half the world’s poor in the final year of the sample, evokes a poverty trap: it has seen little change in average poverty over the entire sample period. We find that income plays a bigger role than inequality for club membership, and income growth matters more than initial income; in contrast, initial inequality plays a bigger role than its changes over time. High initial income and low initial inequality almost invariably drive countries into the lowest-poverty club, while weak growth and low initial income are the key drivers of membership in the highest-poverty club. Inequality plays a more substantive role for membership in intermediate-poverty clubs.

Keywords: Absolute Poverty; Convergence clubs; Income growth; Inequality; Developing countries. (search for similar items in EconPapers)
JEL-codes: D31 I3 O11 O4 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2022-09
New Economics Papers: this item is included in nep-dev
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.ecineq.org/milano/WP/ECINEQ2022-619.pdf First version, 2022 (application/pdf)

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:inq:inqwps:ecineq2022-619

Access Statistics for this paper

More papers in Working Papers from ECINEQ, Society for the Study of Economic Inequality Contact information at EDIRC.
Bibliographic data for series maintained by Maria Ana Lugo ( this e-mail address is bad, please contact ).