When growth is not enough: Do government transfers moderate the effect of economic growth on absolute and relative child poverty?

What is it about?

This study investigates how government cash transfers influence the relationship between economic growth and child poverty in low- and middle-income countries (LMICs). It highlights the limitations of economic growth alone in reducing child poverty and explores the role of social policies, particularly cash transfers, in fostering inclusive growth. The research uses data from the Luxembourg Income Study (LIS) to analyze child poverty trends in 16 LMICs. It employs descriptive analyses and multivariate regression techniques to understand the direct and indirect effects of government transfers on child poverty reduction. Key Findings include that economic growth tends to reduce absolute child poverty but has a more complex and less direct effect on relative child poverty. The study concludes that while economic growth is important, it is insufficient on its own to eradicate child poverty. Government transfers are essential for making growth more inclusive and effective in reducing both absolute and relative child poverty. The findings suggest that policymakers should focus on expanding and improving social protection systems to ensure that economic growth benefits the most vulnerable populations, particularly children.

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