Student Activities 2008-2009

Derrick Robinson

A Re-examination of the Effects of Metropolitan Growth on Poverty during the 1990s

Activity:
Eastern Economic Association Annual Meeting

Abstract:
This paper re-examines the relationship between economic growth during the 1990s and reductions in poverty in metropolitan areas by focusing on the sensitivity of growth to alternative poverty thresholds. Our model investigates changes in poverty at the official poverty thresholds, as well as thresholds set at 50%, 125%, and 150% of the official level. Poverty changes are regressed against a number of economic, educational, and demographic control variables.  The findings confirm previous research showing that areas with higher initial rates of poverty experienced the greatest declines in poverty during the robust growth period of the 1990s. However, the magnitude of this impact diminishes as we lower the poverty thresholds to focus on the most poor in metropolitan areas, suggesting that the trickle down effects of growth diminish for the most economically deprived.