THE IMPACT OF GROWTH ON POVERTY. EVIDENCE FROM THE “JOBLESS GROWTH” IN ALBANIA

Abstract

Development and growth are supposed to have a positive impact in the labor markets but “jobless growth” seems to be a major obstacle for the poor to benefit from the positive growth performance experienced by this country, as by many other countries around the world. There is a wide disparity in the extent of poverty reduction that a growth process can achieve. Therefore, the impact of growth on poverty is seen as depending on the extent to which growth generates employment and good earning opportunities. If employment growth is achieved at the expense of wage reductions, it may have an inadequate impact on poverty. Moreover, since in many low income countries the poor cannot afford to be unemployed, policies should be more concerned with raising the income of the working poor. In this paper we analyze the evidence from Albania with the purpose to expand the understanding of these issues, providing empirical effort into the debate that why growth is jobless in this country, by studying the cumulative and sectored employment and productivity profile of growth and its correlation with observed poverty changes. The main findings are related to the labor market policies that can improve the working conditions and the sectored growth which achieves a greater poverty reduction. Interesting implications are explored for policy makers in order to apply successful strategies that enhance the positive impact of growth on poverty

Keywords

• growth, employment, poverty

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