Economic Inequality and Poverty Dynamics: What does Literature tell us?

Abiodun Elijah Obayelu (1) , Sarah Edore Edewor (2)
(1) Department of Agricultural Economics and Farm Management, Federal University of Agriculture, Abeokuta, Nigeria , Nigeria
(2) Department of Agricultural Economics and Farm Management, Federal University of Agriculture, Abeokuta, Nigeria , Nigeria


Purpose of the study: This paper summarizes the existing literature on the inequality-poverty dynamics dilemma by presenting discoveries and novel ways to close a gap in the literature. The study focused on whether economic differences slow or stop people from falling into or staying out of poverty over time.

Methodology: The study extensively reviews the literature on measures of economic inequality and poverty dynamics.

Main Findings: Findings from the reviewed literature revealed that economic inequality is a crucial determinant of the transition to poverty. Inequality contains poverty, and poverty persists because of the presence of inequality. The direction of the association between poverty and economic inequality is still debatable in the literature, with no general consensus. Some findings show that the direction of the relationship is negative; others say it is positive, bidirectional, and inconclusive.

Research limitations/implications: Poverty dynamics and economic inequality research is scarce because the required data sets are complex and expensive to obtain from surveys in developing countries.

Novelty/Originality of this study: Many poverty studies concentrate on the incidence of poverty at single or multiple moments in time. Therefore, analyzing knowledge of the degree of poverty and how it varies over time is critical for the dynamics of poverty. However, in the academic literature, few empirical articles are devoted to studying the relationship between economic inequality and poverty dynamics. The findings of this study will uniquely contribute to the discourse on growth-poverty inequality in the 2030 Sustainable Development Goals 1 and 10.

Full Article

Generated from XML file


Aassve, A., Burgess, S., Dickson, M., and C. Propper (2006). Modelling Poverty by not Modelling Poverty: An Application of a Simultaneous Hazards Approach to the UK. Centre for Analysis of Social Exclusion (A Centre for Analysis of Social Exclusion (CASE)paper 106, January 2006.

Adepoju, A.O. (2012). “Poverty Transition in Rural Southwest Nigeria.” Global Journal of Science Frontier Research, Agriculture and Biology, 12 (2): 19-30.

Adeleye, B.N., Gershon, O., Ogundipe, A., Owolabi, O., Ogunrinola, I. and O. Adediran (2020). Comparative investigation of the growth-poverty-inequality trilemma in sub-Saharan Africa and Latin American and Caribbean Countries. Heliyon, 6(e05631), 1-11.

Aghion, P., Akcigit, U., Bergeaud, A., Blundell, R. and Hemous D. (1999). Innovation and Top Income Inequality. The Review of Economic Studies,86 (1), 1–45,

Alazzawi, S. (2010). The Dynamics of Poverty and Inequality in an Era of Economic Liberalization: The Case of Egypt. Economic Research Forum (ERF), Working Paper 539.

Alkire, S. and Foster, J. (2011). Understandings and Misunderstandings of Multidimensional Poverty Measurement. Journal of Economic Inequality, 9(2), 289–314. 011-9181-4

Alvaredo, F. and L. Gasparini (2013). 'Recent Trends in Inequality and Poverty in Developing Countries.' CEDLAS Working Paper No. 151.

Ajibola, A., Loto, M., and Enilolobo, O. (2018). Poverty and Inequality in Nigeria: Implications for inclusive growth. Nile Journal of Business and Economics, 9(1), 30-51.

Akerele, D., Shittu, A.M., Ogunmola, O. O., Adekanmbi, A.A. and Adekunle, C.P. (2017). Poverty transition in rural Nigeria: Do household idiosyncratic, farm, and geospatial factors influence movers and stayers? Trop. Agric. (Trinidad), 94 (2), 185-199.

Apergis, N., Dincer, O., and Payne, J.E. (2011). "On the dynamics of poverty and income inequality in US states". Journal of Economic Studies, 38(2), 132-143.

Araar, A., and Duclos, J. Y. (2009). Distributive Analysis Stata Package (DASP) 2.1 software. University of Laval, CIRPEE, and the Poverty Economic and Policy Research Network.

Atkinson, A. B. (1970). On the Measurement of Inequality. Journal of Economic Theory, 2 (3), 244-263.

Baulch, B. and N. McCulloch, (2002). “Being Poor and Becoming Poor: Poverty Status and Poverty Transitions in Rural Pakistan. ' Journal of Asian and African Studies, 37(2), 168-185.

Baulch, B. and Vu, H. D. (2011). Poverty dynamics in Vietnam, 2002 to 2006. In B. Baulch (Ed.), Why Poverty Persists: Poverty Dynamics in Asia and Africa (pp. 219): Cheltenham: Edward Elgar Publishing.

Baulch, B. (2011). Why poverty persists: Poverty dynamics in Asia and Africa. Edward Elgar Publishing.

Bane, M.J. and Ellwood, D.T. (1986): Slipping into and out of poverty: the dynamics of spells Journal of Human Resources, 21, 1-23, 1986

Basu, K. (2005). “Globalization, Poverty, and Inequality: What is the relationship? What Can Be Done?”. World Development, 34(8), 1361-1373.

Beccaria, L., Maurizio, R., Fernandez, A., Monsalvo, P. and M. Álvarez (2011). 'Dynamics of Poverty, Labor Market and Public Policies in Latin America'. PMMA Working Paper 2011-05.

Beker, V.A. (2020). 'Poverty and income inequality: a complex relationship'. Real-world economics review, 29(92): 167-185,

Besley, T., and Burgess, R. (2003). 'Halving Global Poverty'. Journal of Economic Perspectives, 17(3): 3-22

Beteille, A. (2003). Poverty and inequality. Economic and Political Weekly, 38(42): 4455–4463.

Bigsten, A., and Shimeles, A. (2008). Poverty transition and persistence in Ethiopia: 1994–2004. World Development, 36(9), 1559-1584.

Bokosi, F.K. (2007). Household Poverty Dynamics in Malawi: A Bivariate Probit Analysis. Journal of Applied Sciences, 7: 258-262

Bourguignon, F. (2004). The Poverty-Growth-Inequality Triangle. The World Bank Policy Working paper. No. 125. World Bank: Washington, DC

Brunori, P., Palmisano, F., and V. Peragine (2019): Inequality of opportunity in sub-Saharan Africa. Appl. Econ., 51 (60): 6428-6458.

Burgess, S., and C. Propper (1998), 'An Economic Model of Household Income Dynamics, with an Application to Poverty Dynamics among American Women', CASE Discussion Paper No. 9.

Cingano, F. (2014), 'Trends in Income Inequality and its Impact on Economic Growth', OECD Social, Employment and Migration Working Papers, No. 163, OECD Publishing.

Dang, H., Lanjouw, P., Luoto, J., and McKenzie, D. (2014). Using repeated cross sections to explore movements into and out of poverty. J Dev Econ 107: 112-128

Devicienti, F. (2001). Estimating poverty persistence in Britain. LABORatorio Riccardo Revelli Working Paper No.1.

Dhrifi, A. (2015): Financial development and the "Growth-Inequality-Poverty" triangle. J. Knowl. Econ., 6 (4) (2015):1163-1176

Di Maio, G. and P. Landoni (2017). “The Balance of Inequality: A Rediscovery of the Gini’s R Concentration Ratio and a New Inequality Decomposition by Population Subgroups Based on Physical Rationale”. Paper presented at the Seventh Meeting of the Society for the Study of Economic Inequality (Ecineq), New York City, NY, USA, 17-19 July.

Dickens, R. and D.T. Ellwood (2001). Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work. NBER Working Paper No.8253.

Foster, J.,, Greer, J. and Thorbecke, E. (1984). A class of decomposable poverty measures. Econometrica, 52(3): 761-766.

Foster, J. E., and A. Sen. 1997. 'On Economic Inequality After a Quarter Century'. In: A. Sen, editor. On Economic Inequality. Expanded edition. Oxford, United Kingdom: Oxford University Press.Foster, J. E. and A. F. Shorrocks (1991). Subgroup consistent poverty indices. Econometrica,59(3), 687-709.

Fosu, A. K. (2017): Growth, inequality, and poverty reduction in developing countries: recent global evidence. Res. Econ., 71 (2017): 306-336.

Ewubare, D.B. and A. O. Okpani (2018): Poverty and Income Inequality in Nigeria (1980- 2017). International Journal of Advanced Studies in Ecology, Development and Sustainability | (IJASEDS), 5(1):138-151.

Gary, S.F. (2000). The Dynamics of Poverty, Inequality, and Economic Well-being: African Economic Growth in Comparative Perspective. Journal of African Economies, 9(1), 45–78.

Garza-Rodriguez, J. (2018). Poverty and Economic Growth in Mexico. Soc. Sci. 7 (2018): 183; doi:10.3390/socsci7100183

Gries. T. and Redlin, M. (2010). Short-term and long-term dynamics of growth, inequality, and poverty in the developing world '. Center for International Economics, University of Paderborn, Warburger Strasse 100, 33098 Paderborn / Germany. Working Paper Series, September, No. 05

Guedes, G., E.S. Brondizio, A. Resende, R.P. Penna-Firme and I. Cavallini. 2012. Poverty Dynamics and Income Inequality in the Eastern Brazilian Amazon: A Multidimensional Approach. Human Ecology, 40, 41-57. DOI: 10.1007/s10745-011-9444-5

Gunther I. (2017): Empirical Analysis of Poverty Dynamics with Case Studies from Sub-Saharan Africa. Edited by Hermann Sautter and / and Stephan Klasen in Gottingen Studies in Development Economics, Bd./Vol. 21. Germany.

Hassan, SA, Zaman, K, and S. Gul (2015). The relationship between the growth-inequality-poverty triangle and environmental degradation: unveiling the reality. Arab Econ. Busin. J., 10 (1) (2015):57-71

Ho, S, and B. N. Iyke (2018). Finance-growth-poverty nexus: A reassessment of the trickle-down hypothesis in China. Economic Change and Restructuring, 51: 221–47.

Imimole, B. 2021. Population Growth, Economic Growth, Inequality and Poverty Reduction in Nigeria, SAU Journal of Management and Social Sciences, 6(Special Issue):1-12

Ivanov, A. and Kagin, J. (2014). Roma Poverty from a Human Development Perspective. Istambul

Jenkins, S.P. (2006). The measurement of income inequality. In: Osberg, L., ed. Economic inequality and poverty: international perspectives. London: M, E. Sharpe, Inc. 19913–38.

Justino, P., and J. Litchfield (2003). 'Poverty dynamics in rural Vietnam: winners and losers during reform', Poverty Research Unit at Sussex, Department of Economics, University of Sussex.

Katsushi, SI., and YJing. (2014). 'Poverty Dynamics of Households in Rural China'. Oxford Bulletin of Economics and Statistics, 76 (6): 898-923.

Khan, M. A., Khan, M. Z., Zaman, K., Hassan, U. and Hassan, S. (2014). Global estimates of the growth-inequality-poverty (GIP) triangle: Evidence from World Bank classification countries, Quality and Quantity, 48 (5):2631-2646

Kolawole, B. and Omobitan, A. (2015). Poverty, inequality, and growth in Nigeria: An empirical evidence. International Journal of Economics and Finance, 7(2):51-61.

Krishna, A. (2004). Escaping poverty and becoming poor: Who gains, who loses, and why? World Development, 32(1):121-136.

Luttmer, E. (2001), ‘Measuring poverty dynamics and inequality in transition economies: disentangling real events from noisy data’. World Bank policy research working paper 2549, Washington, DC

Kuznets, S. (1955): Economic growth and income inequality. Am. Econ. Rev., XLV (1):1-28

Mbanasor, J. A. Nwachukwu, I. N., Agwu, N.M., Njoku, M.E., Onwumere, J. (2013). "Analysis of Income Inequality and Poverty Dynamics among Rural Farm Households in Abia State, Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), 1(2),1-6.

McKay, A. (2002). Defining and measuring inequality (Inequality Briefing: Briefing Paper No. 1). Economists’ Resource Centre.

Martinez, A. (2016). Analytical Tools for Measuring Poverty Dynamics: An Application Using Panel Data in the Philippines. In ADB Economics Working Paper Series Analytical.

Marrero, G.A., and L. Serv en (2018). Growth, Inequality, and Poverty: A Robust Relationship? ECINEQ WP 2018 – 478 (2018), pp. 1-41.

Nguyen, N.A and Nguyen N.M (2018). An Analysis of Poverty Dynamics in the Vietnam Development Context. Available online at

Nuruddeen, T. & Ibrahim, S. (2014). An Empirical Study on the Relationship between Poverty, Inequality and Economic Growth in Nigeria. Journal of Economic and Sustainable Development, 5 (26): 20-25.

Obayelu, O. A., Obayelu, A. E. & Awoku, I.T. (2021). Technical efficiency and socioeconomic effects on poverty dynamics among cassava-based farming households in rural Nigeria, Contemporary Social Science, DOI: 10.1080/21582041.2021.1981425.

OECD (2001). When Money is Tight: Poverty Dynamics in OECD Countries. OECD Employment Outlook. Chapter Two, pp. 38-87.

Ogbeide-Osaretin, E.N. (2018). An empirical analysis of the link between poverty, growth, and inequality in Niger?a. International Journal of Social Science and Economic Research, 3(5):1983-2005.

Onwuka, C.E. (2021). Poverty, Income Inequality and Economic Growth in Nigeria. (March 31, 2021). Available at SSRN:

Payne, B. K., Brown-Iannuzzi, J. L., & Hannay, J. W. (2017). Economic inequality increases risk taking. Proceedings of the National Academy of Sciences of the United States of America, 114(18), 4643-44648.

Pizzolitto, G. (2005). Poverty and Inequality in Chile: Methodological Issues and a Literature Review, Documento de Trabajo, No. 20, Universidad Nacional de La Plata, Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), La Plata.

Ramosa, M., Gibaja-Romerob, D., and S. Ochoac (2020). Gender inequality and gender-based poverty in Mexico. Heliyon, 6 (1), e03322.

Shorrocks, A. F. (1999). Decomposition Procedures for Distributional Analysis: A Unified Framework Based on the Shapley Value. Essex, UK: Department of Economics, University of Essex.

Sen, A.K. (1973). On Economic Inequality, Clarendon Press: Oxford.

Slemrod, J. (1992). “Why people pay taxes, tax compliance and enforcement.” Ann Arbor: University of Michigan Press.

Stoyanova, S. and Tonkin, R. (2018). An Expenditure-based Approach to Poverty in the UK. In 35th IARIW General Conference, Copenhagen, Denmark.

Suppa, N. (2017). "Transitions in poverty and deprivations: An analysis of multidimensional poverty dynamics." OPHI Working Paper 109, University of Oxford.

Teguh, D, and N Nurkholis (2011). Finding out of the Determinants of Poverty Dynamics in Indonesia: Evidence from panel data. Available online at MPRA Paper No. 41185

UNDP (2017). “Out of Poverty and Back to Poverty Transitions Using Synthetic Panel Data'. United Nations Economic Commission for Europe Conference of European Statisticians, Experts meeting on measuring poverty and equality 26-27 September 2017, Budva, Montenegro working paper 22.

Weon, S. and D. Rothwell, W. Rothwell (2020). Dynamic of Asset Poverty in South Korea. "Dynamics of Asset Poverty in South Korea," Social Indicators Research: An International and Interdisciplinary Journal for Quality of Life Measurement, 150(2), 639-657.

World Bank. (2018). Ending extreme poverty: Progress, but uneven and slowing. In the World Bank Group, piecing together the poverty puzzle. Washington D.C., United States: World Bank, (pp. 19- 48)

Zizzamia, R., Schotte, S., and Leibbrandt, M.V. (2019). Snakes and ladders and loaded dice: Poverty dynamics and inequality in South Africa, 2008-2017. WIDER Working Paper No. 2019/25


Abiodun Elijah Obayelu (Primary Contact)
Sarah Edore Edewor
Obayelu, A. E., & Edewor, S. E. (2022). Economic Inequality and Poverty Dynamics: What does Literature tell us?. Innovation Journal of Social Sciences and Economic Review, 4(4), 21–31.

Article Details


Smart Citations via scite_