Dollar, DavidKraay, Aart2014-08-262014-08-262001-04https://hdl.handle.net/10986/19679When average income rises, the average incomes of the poorest fifth of society rise proportionately. This is a consequence of the strong empirical regularity that the share of income accruing to the bottom quintile does not vary systematically with average income. The authors document this empirical regularity in a sample of 92 countries spanning the past four decades and show that it holds across regions, periods, income levels, and growth rates. The authors next ask whether the factors that explain cross-country differences in the growth rates of average incomes have differential effects on the poorest fifth of society. They find that several determinants of growth--such as good rule of law, opennness to international trade, and developed financial markets--have little systematic effect on the share of income that accrues to the bottom quintile. Consequently, these factors benefit the poorest fifth of society as much as everyone else. Thee is some weak evidence that stabilization from high inflation and reductions in the overall size of government not only increase growth but also increase the income share of the poorest fifth in society. Finally, the authors examine several factors commonly thought to disproportionately benefit the poorest in society, but find little evidence of their effects. The absence of robust findings emphasizes that relatively little is known about the broad forces that account for the cross-country and intertemporal variation in the share of income accruing to the poorest fifth of society.en-USCC BY 3.0 IGOAGRICULTURAL PRODUCTIVITYAGRICULTUREANNUAL CHANGEANNUAL GROWTHANNUAL OBSERVATIONSAVERAGE ANNUALAVERAGE INCOMEAVERAGE INCOMESBENCHMARKCAPITAL CONTROLSCONDITIONAL CONVERGENCECONSUMPTIONCOUNTRY EFFECTSCOUNTRY-SPECIFIC EFFECTSCRISESCROSS-COUNTRY DIFFERENCESDATA AVAILABILITYDEMOCRACYDEMOCRATIC INSTITUTIONSDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPMENT RESEARCHDIFFERENCES IN INCOMEDISTRIBUTION EFFECTDISTRIBUTION FUNCTIONDISTRIBUTIONAL EFFECTDISTRIBUTIONAL EFFECTSDYNAMIC PANELECONOMETRIC PROBLEMSECONOMIC GROWTHECONOMIC INTEGRATIONEDUCATIONAL ATTAINMENTELASTICITYEMPIRICAL EVIDENCEEMPIRICAL GROWTH LITERATUREEMPIRICAL LITERATUREEMPIRICAL REGULARITYERROR TERMERROR TERMSEXCHANGE RATEEXCHANGE RATESEXPENDITURESEXPLANATORY VARIABLEFACTOR ENDOWMENTSFINANCIAL CRISISFINANCIAL DEVELOPMENTFINANCIAL MARKETSFINANCIAL SECTORFIXED EFFECTSGDPGDP PER CAPITAGINI COEFFICIENTGROSS INCOMEGROWTH EFFECTGROWTH EPISODESGROWTH MODELSGROWTH RATESGROWTH REGRESSIONSGROWTH-POVERTY RELATIONSHIPHEALTH OUTCOMESHETEROSKEDASTICITYHIGH INFLATIONHOUSEHOLD INCOMEHOUSEHOLD SURVEYSINCOMEINCOME DISTRIBUTIONINCOME DISTRIBUTION DATAINCOME GROWTHINCOME INEQUALITYINCOME LEVELSINCOME SHAREINCREASE GROWTHINCREASED INEQUALITYINCREASESINFANT MORTALITYINTERNATIONAL OPENNESSINTERNATIONAL TRADEINTERTEMPORAL VARIATIONLABOR PRODUCTIVITYLINEAR RELATIONSHIPLIVING STANDARDSLONG RUNLORENZ CURVEMACRO STABILITYMACROECONOMIC POLICIESMACROECONOMIC STABILITYMACROECONOMICSMEAN DIFFERENCESMEAN INCOMEMEAN INCOMESMEASUREMENT ERRORNATIONAL ACCOUNTSNATIONAL INCOMENEGATIVE EFFECTNEGATIVE RELATIONSHIPNORMAL DISTRIBUTION0 HYPOTHESISOPEN MARKETSPER CAPITA INCOMEPER CAPITA INCOMESPOINT ESTIMATESPOLICY INTERVENTIONSPOLICY PACKAGEPOLICY RESEARCHPOOR COUNTRIESPOOR HOUSEHOLDSPOOR PEOPLEPOSITIVE EFFECTPOSITIVE EFFECTSPOVERTY HEADCOUNTPOVERTY LINEPOVERTY RATEPOVERTY REDUCTIONPOVERTY REDUCTION STRATEGYPOWER PARITYPRIMARY SCHOOLPRIVATE PROPERTYPRO-POORPROPERTY RIGHTSPUBLIC INVESTMENTPUBLIC SPENDINGPURCHASING POWERPURCHASING POWER PARITYQUALITY STANDARDSREGIONAL DUMMIESRELATIVE INCOMESREVERSE CAUSATIONRICH COUNTRIESRULE OF LAWRURAL AREASSIGNIFICANT EVIDENCESIGNIFICANT IMPACTSOCIAL SAFETYSOCIAL SAFETY NETSSOCIAL SERVICESSOCIAL SPENDINGSTANDARD DEVIATIONTIME SERIESTRANSITION ECONOMIESWORLD TRADE ORGANIZATION10.1596/1813-9450-2587