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Poor people derive most of their income from work; however, there is insufficient understanding of the role of employment and earnings as a linkage between growth and poverty reduction, especially in low income countries. With the objective of providing inputs into the policy discussion on how to enhance poverty reduction through increased employment and earnings for given growth levels, this study explores this linkage in the case of Madagascar using data from the national accounts and household surveys from the years 1999, 2001, and 2005, a period characterized among others by a short but severe crisis which started at the end of 2001 and the subsequent economic rebound. This report is part of a series of studies conducted in the context of the World Bank’s research framework aiming to improve the understanding of the linkages among growth, labor, and poverty reduction.

Broad-based growth is critical for accelerating poverty reduction. But income inequality also affects the pace at which growth translates into gains for the poor. Despite the attention researchers have given to the relative roles of growth and inqequality in reducing poverty, little is known about how the microunderpinnings of growth strategies affect poor households' ability to participate in and profit from growth. Delivering on the Promise of Pro-Poor Growth contributes to the debate on how to accelerate poverty reduction by providing insights from eight countries that have been relatively successful in delivering pro-poor growth: Bangladesh, Brazil, Ghana, India, Indonesia, Tunisia, Uganda, and Vietnam. It integrates growth analytics with the microanalysis of household data to determine how country policies and conditions interact to reduce poverty and to spread the benefits of growth across different income groups. This title is a useful resource for policy makers, donor agencies, academics, think tanks, and government officials seeking a practical framework to improve country level diagnostics of growth-poverty linkages.

Contents: Poverty and the response to the economic crisis in Liberia. brief overview -- Poverty and human development diagnostic -- Poverty in Liberia. level, profile and determinants -- Education in Liberia. basic diagnostic using the 2007 CWIQ survey -- Health in Liberia. basic diagnostic using the 2007 CWIQ survey -- Impact of higher food prices and fiscal measures taken to respond to the crisis -- Rice prices and poverty in Liberia -- Benefit incidence of fiscal measures to deal with the impact on households of the economic crisis in Liberia. comparing import and income taxes -- Evaluation of the cash for work temporary employment program -- Ex ante assessment of the potential impact of labor intensive public works in Liberia -- Liberia's cash for work temporary employment project. responding to crisis in low income, fragile countries -- Impact of labor intensive public works in Liberia. results from a light evaluation survey -- List of tables, figures, and boxes.

Following the 1998 financial crisis, four out of every ten people slipped into poverty, not able to meet basic needs. Luckily, post-crisis economic rebound was impressive and broad-based ? albeit uneven ? across sectors and regions. This title explores the nature of poverty, both nationally and regionally, to identify the groups with a high poverty risk. It then examines growth-poverty linkages through the labor market, as well as the contribution of growth and inequality to the recent poverty reduction. It also considers the expected impact of WTO accession on overall growth and poverty. Finally, it focuses on the scope for improving social policy in ways that will have a direct impact on the poor.

This study documents the effects of the 2008–09 global financial crisis on poverty in Latin America and the Caribbean (LAC). In doing so, it describes and decomposes the effects of the crisis on poverty using data from comparable household budget surveys for Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Mexico, Paraguay, Peru, and Uruguay, and labor force surveys for Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, and Uruguay. The study also provides macro-micro modeling of crisis and no-crisis scenarios for Mexico and Brazil, as well as the big picture and program-specific details of the social protection policy responses for these countries and more. Among the findings are the following. First, the effects of the global financial crisis on those living in poverty were not trivial: more than 3 million people fell into or remained mired in poverty in 2009 as a result of the crisis. Of these, 2.5 million were Mexican. Second, the changes in poverty were driven by changes in labor incomes caused by a variable combination of changes in employment rates and real wages. Third, the macro-micro modeling revealed different adjustment mechanisms but similar final incidence results for Brazil and Mexico. The results were regressive overall, with the middle of the income distribution hit even a bit more than the poor. According to the descriptive results from the larger set of countries, changes in inequality accounted for a tenth to a third of changes in poverty. Fourth, countries were quite active in their social protection policy responses, largely taking advantage of programs built in precrisis years. Social transfers partially offset the lower labor earnings of the poor, although income protection for the unemployed was weak. Finally, overall the policy messages are that good policy helps attenuate the links between a global crisis and poverty in the LAC countries, and many of the important things need to be done ex ante such as dealing with the macro fundamentals and building social protection programs.

Understanding Changes in Poverty brings together different methods to decompose the contributions to poverty reduction. A simple approach quantifies the contribution of changes in demographics, employment, earnings, public transfers, and remittances to poverty reduction. A more complex approach quantifies the contributions to poverty reduction from changes in individual and household characteristics, including changes in the sectoral, occupational, and educational structure of the workforce, as well as changes in the returns to individual and household characteristics. Understanding Changes in Poverty implements these approaches and finds that labor income growththat is, growth in income per worker rather than an increase in the number of employed workerswas the largest contributor to moderate poverty reduction in 21 countries experiencing substantial reductions in poverty over the past decade. Changes in demographics, public transfers, and remittances helped, but made relatively smaller contributions to poverty reduction. Further decompositions in three countries find that labor income grew mainly because of higher returns to human capital endowments, signaling increases in productivity, higher relative price of labor, or both. Understanding Changes in Poverty will be of particular relevance to development practitioners interested in better understanding distributional changes over time. The methods and tools presented in this book can also be applied to better understand changes in inequality or any other distributional change.

Over the past century, the world has seen a sustained decline in the proportion of people living in poverty, but climate change could challenge poverty reduction efforts. On the Poverty and Welfare Impacts of Climate Change: Quantifying the Effects, Identifying the Adaptation Strategies surveys the relevant research on how climate change may affect global poverty rates and presents country-specific studies with implications for low-income rural populations as well as governments' risk management programs.An evidence review examines three main strands of the literature. Unsurprisingly, the impacts of climate change are shown to be generally regressive-falling more heavily on the poor than on the rich. However, most estimates have tended to ignore the effect of aggregate economic growth on poverty and household welfare. With continued growth, the evidence suggests that the poverty impact will be relatively modest and will not reverse the major decline in poverty expected over the next 40 years. Sector-specific studies-focusing on how climate change may affect agricultural yields-are generally poor predictors of national-level poverty impacts because of heterogeneity in the ability of households to adapt. That heterogeneity features prominently in studies of how weather shocks affect rural households in Indonesia and Mexico. Erratic deviations from long-term weather patterns affect growing cycles and thereby rural households' consumption (per capita expenditure) and health indicators. In Indonesia, the affected households appeared able to protect food expenditures at the expense of nonfood expenditures, and their access to credit and community public-works projects had the strongest moderating effects. In Mexico, weather shocks affected both food and nonfood consumption in ways that varied by both region and timing. The affected households' ability to smooth consumption depended on factors including proximity to bus stations. In some regions, weather shocks also had measurable stunting effects on the stature of children between 12 and 47 months of age, perhaps from changes in household income, increases in communicable diseases, or both. Overall, more region-specific analyses within more finely tuned climate categories will help researchers to better estimate the effects of climate change on poverty and the effectiveness of government-level strategies to address those effects.This book will be of interest to academics, and decision makers in government and nongovernmental organizations, seeking to design climate-smart poverty alleviation and safety net programs based on evidence.

The economic impact of climate change has typically been considered at regional or national levels. This Perspective assesses impacts at household level to determine effects on poverty and the poor. It shows how rapid development could reduce these impacts. Analysis of the economic impact of climate change typically considers regional or national economies and assesses its impact on macroeconomic aggregates such as gross domestic product. These studies therefore do not investigate the distributional impacts of climate change within countries or the impacts on poverty. This Perspective aims to close this gap and provide an assessment of climate change impacts at the household level to investigate the consequences of climate change for poverty and for poor people. It does so by combining assessments of the physical impacts of climate change in various sectors with household surveys. In particular, it highlights how rapid and inclusive development can reduce the future impact of climate change on poverty.

This book reviews the experience of the MENA region with poverty and human development since the mid-1980s. It finds that poverty rates did not decline by much during this period while health and education indicators improved substantially. The stagnation of poverty rates is ascribed to the stagnation of the region?s economies during this period while the improvement in human indicators is likely due to several factors including improvement in the delivery of public health and education services.

Economists have long sought to predict how macroeconomic shocks will affect individual welfare. Macroeconomic data and forecasts are easily available when crises strike. But policy action requires not only understanding the magnitude of a macro shock, but also identifying which households or individuals are being hurt by (or benefit from) the crisis. Moreover, in many cases, impacts on the ground might be already occurring as macro developments become known, while micro level evidence is still unavailable because of paucity of data. Because of these reasons, a comprehensive real-time understanding of how the aggregate changes will translate to impacts at the micro level remains elusive. This problem is particularly acute when dealing with developing countries where household data is sporadic or out of date. This volume outlines a more comprehensive approach to the problem, showcasing a micro simulation model, developed in response to demand from World Bank staff working in countries and country governments in the wake of the global financial crisis of 2008-09. During the growing catastrophe in a few industrialized countries, there was rising concern about how the crisis would affect the developing world and how to respond to it through public policies. World Bank staff s was scrambling to help countries design such policies; this in turn required information on which groups of the population, sectors and regions the crisis would likely affect and to what extent. The volume is organized as follows. Chapter 1 summarizes the methodology underlying the micro simulation model to predict distributional impacts of the crisis, along with several case studies that highlight how the model can be used in different country contexts. Chapters 2 to 4 are written by experts external to the Bank, two of whom participated as discussants at a workshop on the micro simulation work organized in May, 2010 at the World Bank headquarters. Chapter 2 comments on the broader implications and shortcomings of applying the technique described in Chapter 1 and the ability or willingness of governments to respond adequately to its results. Chapter 3 draws parallels between the United States and developing countries to discuss the lessons that can be learned for mitigating the impacts of future crises. Chapter 4 discusses how the micro simulation approach can be sharpened to make it a better tool for distributional analysis moving forward.