Poverty and Economic Growth in Mexico

Abstract

The relationship between poverty and economic growth has been widely discussed in the economic development literature during the past few decades. However, most of this research has been based on cross-sectional studies and very few studies have used time-series techniques to analyze this important issue. At the same time, there are also only a few studies analyzing this issue for the case of Mexico. Therefore, the objective of this paper was to analyze the relationship between poverty and economic growth in Mexico, using a cointegration analysis with structural change for the period 1960–2016. The Gregory-Hansen cointegration test confirmed the existence of a long-term equilibrium relationship between poverty reduction and economic growth, both in the short run and in the long run. Using a Vector Error Correction Model (VECM), we find that, in the long run, a 1% increase in economic growth leads to a 2.4% increase in per capita consumption (and therefore poverty reduction). This estimate is similar to those obtained in other studies for the case of Mexico and for other developing countries. Also, using the Granger causality test, it was found that there is a bidirectional causality relationship between poverty reduction and economic growth in Mexico.

Determinants of Poverty in Mexico: A Quantile Regression Analysis

“…Some studies, such as that of Jiménez Pozo et al (2006) for the case of Bolivia do not find evidence that female headship of the family increases poverty, as did (Székely 1998) for the case of Mexico. For this same country Garza-Rodríguez (2015), Serratos (2015) and Fernández-Ramos et al (2016) find evidence that households headed by women are more likely to be poor.…”

“…Gender of Household Head Many studies have analyzed whether the gender of the head of the family is related to poverty, particularly if the fact that the head of the family is female increases the probability that the household is poor. This phenomenon, known as the feminization of poverty (Pearce 1978), can be explained by discrimination against women in the labor market but also because women tend to have less education than men, which is why they receive less income in the labor market (Garza-Rodríguez 2015). Most studies have found evidence in favor of the feminization of poverty (Biyase and Zwane 2018;Chen and Wang 2015;Iqbal et al 2020;Ravindra Deyshappriya and Minuwanthi 2020;Teka et al 2019).…”

“…Several studies have addressed the issue of poverty and its determinants for the Mexican case (Fernández-Ramos et al 2016;Garza-Rodríguez 2015;Garza-Rodriguez et al 2010), but they have done so without taking into consideration that these determinants could vary according to the depth of poverty, that is, along the distribution of income among the poor. These studies have used the logistic regression method, which distinguishes only whether the household is poor or not but does not analyze the potentially different effects of each explanatory variable according to the income of the poor.…”

Determinan pertumbuhan ekonomi berkelanjutan wilayah induk dan pemekaran di kawasan timur Indonesia

“…Dalam kaitannya dengan pertumbuhan ekonomi, secara literatur, kemiskinan merupakan salah satu faktor yang dapat mempengaruhi pertumbuhan ekonomi. Para ekonom setuju bahwa kemiskinan dan pertumbuhan ekonomi memiliki hubungan terbalik atau negatif (Alvaredo & Gasparini, 2015;Garza-Rodriguez, 2018;Karim et al, 2013;Škare & Družeta, 2016). Studi lain juga menyatakan bahwa perlambatan pertumbuhan ekonomi telah menyebabkan adanya kemiskinan (Aba et al, 2015).…”

THE The Nexus Between Poverty, Education and Economic Growth in Indonesia

“…Meanwhile, Nyasha, Gwenhure & Odhiambo (2017) and Nuruddeen & Ibrahim (2014) have found a unidirectional causality running from poverty reduction to economic growth. Other studies have revealed that the nexus between poverty and economic growth has a long-run bidirectional causality (Afzal et.al, 2012;Garza-Rodriguez, 2018 ;Dewi et al, 2018) while in the case of Nigeria, Okoroafor and Chinweoke (2013); Nindi & Odhiambo (2015) have argued that there is no relationship between economic growth and poverty.…”