NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Finance, Inequality, and Poverty: Cross-Country Evidence

Thorsten Beck, Asli Demirguc-Kunt, Ross Levine

NBER Working Paper No. 10979
Issued in December 2004
NBER Program(s):   CF

While substantial research finds that financial development boosts overall economic growth, we study whether financial development disproportionately raises the incomes of the poor and alleviates poverty. Using a broad cross-country sample, we distinguish among competing theoretical predictions about the impact of financial development on changes in income distribution and poverty alleviation. We find that financial development reduces income inequality by disproportionately boosting the incomes of the poor. Countries with better-developed financial intermediaries experience faster declines in measures of both poverty and income inequality. These results are robust to controlling for other country characteristics and potential reverse causality.

download in pdf format
   (282 K)

email paper

A non-technical summary of this paper is available in the July 2005 NBER digest.  You can sign up to receive the NBER Digest by email.

This paper is available as PDF (282 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w10979

Published: Beck, Thorsten, Asli Demirguc-Kunt and Ross Levine. "SMEs, Growth, And Poverty: Cross-Country Evidence," Journal of Economic Growth, 2005, v10(3,Sep), 199-229

Users who downloaded this paper also downloaded these:
Levine w10766 Finance and Growth: Theory and Evidence
Demirguc-Kunt and Levine w15275 Finance and Inequality: Theory and Evidence
Feldstein w6770 Income Inequality and Poverty
Beck, Demirguc-Kunt, Laeven, and Levine w10983 Finance, Firm Size, and Growth
Greenwood and Jovanovic w3189 Financial Development, Growth, and the Distribution of Income
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us