When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic

The Dominican Republic stands out as a fast growing economy that has not been able to generate a commensurate reduction in poverty. Three reasons have been raised before to explain this conundrum: (i) a labor market that does not translate productivity gains into salary increases; (ii) a domestic ec...

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Bibliographic Details
Main Authors:	Carneiro, Francisco Galrao, Sirtaine, Sophie
Other Authors:	Galrao Carneiro, Francisco
Format:	Book
Language:	English en_US
Published:	Washington, D.C.: World Bank 2017
Subjects:	MIGRATION INEQUALITY SKILLS GROWTH LABOR MARKET IMMIGRATION PRODUCTIVITY POVERTY LABOR SHARE EMIGRATION INTERNATIONAL TRADE
Online Access:	http://hdl.handle.net/10986/26711

id	okr-10986-26711
recordtype	oai_dc
spelling	okr-10986-267112021-04-23T14:04:37Z When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic Carneiro, Francisco Galrao Sirtaine, Sophie Galrao Carneiro, Francisco Sirtaine, Sophie Aristy-Escuder, Jaime Hakobyan, Shushanik Lederman, Daniel Baez, Javier E. García-Suaza, Andrés Sousa, Liliana D. Sanchez, Diana Kone, Zovanga L. Ozden, Caglar MIGRATION INEQUALITY SKILLS GROWTH LABOR MARKET IMMIGRATION PRODUCTIVITY POVERTY LABOR SHARE EMIGRATION INTERNATIONAL TRADE The Dominican Republic stands out as a fast growing economy that has not been able to generate a commensurate reduction in poverty. Three reasons have been raised before to explain this conundrum: (i) a labor market that does not translate productivity gains into salary increases; (ii) a domestic economy with weak inter-sectoral linkages; (iii) and a public sector that does not spend enough nor particularly well to reduce poverty. In addition, the country remains largely exposed to natural disasters and exogenous shocks that, if not mitigated properly, may affect the sustainability of growth in the medium and longer terms. This book assembles a collection of empirical analyses that explore three complementary hypotheses that could help understand why the Dominican Republic continues, to this date, experiencing high economic growth rates with limited poverty reduction. The first hypothesis is concerned with testing whether the observed pattern of fast economic growth cum persistent poverty in the DR is partly driven by a poverty methodology that does not account for price variation that affects distinctly the consumption patterns of low-income and better-off households. If that hypothesis holds, the DR may face a situation in which household income for households at the bottom of the distribution is underestimated. The second hypothesis tests whether the pattern of specialization in the DR might be such that it does not favor unskilled labor. If that hypothesis holds, then returns to capital are probably much higher than returns to labor which would be an indication that the DR has had a comparative advantage in products that are capital intensive instead of labor-intensive. The third hypothesis investigates whether poverty and wage inequality in the DR are affected not only by immigration but also by emigration. The contribution of the volume, therefore, lies in precisely offering a more careful exploration of specific issues around common explanations for the shortcomings of the DR in reducing poverty on a faster basis. 2017-05-23T14:34:18Z 2017-05-23T14:34:18Z 2017-05-23 Book 978-1-4648-1036-7 http://hdl.handle.net/10986/26711 English en_US Directions in Development—Poverty; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, D.C.: World Bank Publications & Research Publications & Research :: Publication Latin America & Caribbean Caribbean Dominican Republic
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	MIGRATION INEQUALITY SKILLS GROWTH LABOR MARKET IMMIGRATION PRODUCTIVITY POVERTY LABOR SHARE EMIGRATION INTERNATIONAL TRADE
spellingShingle	MIGRATION INEQUALITY SKILLS GROWTH LABOR MARKET IMMIGRATION PRODUCTIVITY POVERTY LABOR SHARE EMIGRATION INTERNATIONAL TRADE Carneiro, Francisco Galrao Sirtaine, Sophie When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic
geographic_facet	Latin America & Caribbean Caribbean Dominican Republic
relation	Directions in Development—Poverty;
description	The Dominican Republic stands out as a fast growing economy that has not been able to generate a commensurate reduction in poverty. Three reasons have been raised before to explain this conundrum: (i) a labor market that does not translate productivity gains into salary increases; (ii) a domestic economy with weak inter-sectoral linkages; (iii) and a public sector that does not spend enough nor particularly well to reduce poverty. In addition, the country remains largely exposed to natural disasters and exogenous shocks that, if not mitigated properly, may affect the sustainability of growth in the medium and longer terms. This book assembles a collection of empirical analyses that explore three complementary hypotheses that could help understand why the Dominican Republic continues, to this date, experiencing high economic growth rates with limited poverty reduction. The first hypothesis is concerned with testing whether the observed pattern of fast economic growth cum persistent poverty in the DR is partly driven by a poverty methodology that does not account for price variation that affects distinctly the consumption patterns of low-income and better-off households. If that hypothesis holds, the DR may face a situation in which household income for households at the bottom of the distribution is underestimated. The second hypothesis tests whether the pattern of specialization in the DR might be such that it does not favor unskilled labor. If that hypothesis holds, then returns to capital are probably much higher than returns to labor which would be an indication that the DR has had a comparative advantage in products that are capital intensive instead of labor-intensive. The third hypothesis investigates whether poverty and wage inequality in the DR are affected not only by immigration but also by emigration. The contribution of the volume, therefore, lies in precisely offering a more careful exploration of specific issues around common explanations for the shortcomings of the DR in reducing poverty on a faster basis.
author2	Galrao Carneiro, Francisco
author_facet	Galrao Carneiro, Francisco Carneiro, Francisco Galrao Sirtaine, Sophie
format	Book
author	Carneiro, Francisco Galrao Sirtaine, Sophie
author_sort	Carneiro, Francisco Galrao
title	When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic
title_short	When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic
title_full	When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic
title_fullStr	When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic
title_full_unstemmed	When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic
title_sort	when growth is not enough : explaining the rigidity of poverty in the dominican republic
publisher	Washington, D.C.: World Bank
publishDate	2017
url	http://hdl.handle.net/10986/26711
_version_	1764462622755782656

When Growth Is Not Enough : Explaining the Rigidity of Poverty in the Dominican Republic

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