Economic Growth and its Role in Reducing Absolute Poverty
Analyse how economic growth can reduce absolute poverty.
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Economic Growth & Development

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Use relevant data and statistics to strengthen your arguments.
Economic growth can indeed contribute to reducing absolute poverty. Let's analyze the reasons why:
➡️1. Employment generation: Economic growth often leads to an expansion of economic activities and businesses. This, in turn, creates more employment opportunities, increasing the chances of the poor finding jobs. As individuals gain employment, their incomes rise, enabling them to meet their basic needs and lift themselves out of absolute poverty.
➡️2. Income improvement: Economic growth generally results in rising wages and increased labor demand. As the economy expands, businesses experience higher productivity, which can lead to higher incomes for workers. This increase in income can help alleviate absolute poverty by providing individuals with the means to afford food, shelter, healthcare, and other basic necessities.
➡️3. Government expenditure: Economic growth often generates higher tax revenues for governments. With increased resources at their disposal, governments can allocate more funds to social welfare programs and poverty alleviation initiatives. This can include improved access to education, healthcare services, and social safety nets. Government spending on targeted programs can directly benefit the poor and contribute to reducing absolute poverty.
➡️4. Human capital development: Economic growth can facilitate investments in education and skills development. As economies expand, there is a greater emphasis on improving the quality of the workforce. This can lead to increased educational opportunities, vocational training programs, and skill-building initiatives. Enhanced human capital equips individuals with the knowledge and skills necessary to access better job opportunities, earn higher incomes, and escape the cycle of absolute poverty.
➡️5. Improved infrastructure and services: Economic growth often entails investments in infrastructure development, such as transportation networks, communication systems, and access to clean water and sanitation. These developments enhance the overall living conditions and provide the poor with better access to essential services, enabling them to improve their quality of life and break free from the constraints of absolute poverty.
It is important to note that the distributional aspects of economic growth, including equitable access to opportunities and the fair distribution of wealth, play a critical role in determining the extent to which economic growth effectively reduces absolute poverty. Addressing income inequality, promoting inclusive growth, and implementing targeted poverty reduction policies are key factors in ensuring that the benefits of economic growth reach those most in need.
I. 🍃Introduction
- Explanation of the relationship between economic growth and poverty reduction
II. Economic growth and employment
- Discussion of how economic growth can lead to increased employment opportunities
- Explanation of how this can benefit the poor by increasing their chances of gaining jobs and raising their income
III. Economic growth and tax revenue
- Explanation of how economic growth can increase tax revenue for the government
- Discussion of how this can benefit the poor by enabling the government to spend more on programs to help them
IV. Government spending to help the poor
- Examples of how increased tax revenue can be used to help the poor, such as improved education and higher state benefits
V. 👉Conclusion
- Recap of how economic growth can benefit the poor through increased employment and government spending
- Emphasis on the importance of economic growth in reducing absolute poverty.
Economic growth is likely to increase employment - this may increase the chances of the poor gaining jobs - raise income - allow them to buy basic necessities / definition of absolute poverty -. Economic growth can increase tax revenue - this may enable the government to spend more to help the poor - e.g. improved education for the poor - higher state benefits -.
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I. 🍃Introduction
- Explanation of the relationship between economic growth and poverty reduction
II. Economic growth and employment
- Discussion of how economic growth can lead to increased employment opportunities
- Explanation of how this can benefit the poor by increasing their chances of gaining jobs and raising their income
III. Economic growth and tax revenue
- Explanation of how economic growth can increase tax revenue for the government
- Discussion of how this can benefit the poor by enabling the government to spend more on programs to help them
IV. Government spending to help the poor
- Examples of how increased tax revenue can be used to help the poor, such as improved education and higher state benefits
V. 👉Conclusion
- Recap of how economic growth can benefit the poor through increased employment and government spending
- Emphasis on the importance of economic growth in reducing absolute poverty.
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