Direct effects of technology on poverty reduction include increase productivity gains and lower per unit costs of production, which can raise incomes of producers that adopt technology. There are also a number of indirect benefits from technology adoption: depending on the elasticity of demand, outward shifts in supply can lower food prices and increased productivity may stimulate the demand for labour. Most of results show that the dominant effect of technology on poverty is through direct effects in Africa, indirect agricultural employment effects in Asia (Munongo and Chitungo, 2010). The adoption of high yielding rice and wheat varieties effect on per capita expenditure and reduce poverty, generally increased demand for labour due to the higher harvesting and
Ever since the Great Depression, the minimum wage has been in effect — in order to reduce poverty and solidify that employees are paid a reasonable sum. Although the minimum wage can be beneficial and advantageous for individuals and to our economy as a whole, it can also be detrimental to our nation’s finances. The federal government should not allow this to pass, but rather they should increase the citizens’ knowledge of the pernicious consequences and complications that will arise with a higher minimum wage, especially one as high as $15 per hour. Some of the resulting conflicts that will occur if this possible raise in the federal minimum wage takes effect are: job loss, business failure, higher consumer prices, and a lower demand for uneducated employees. Although it may appear as if increasing the federal minimum wage will help to lift families out of poverty, in
A large economic inequality gap implies that the poverty levels are quite high and this implies that the country’s ability to provide amenities like health, education and security are crippled and this may eventually create economic burdens to the country. Acquired power shuffles among the rich can weaken tax policies in favor of the rich, thereby leading to low tax return collection and minimal funding of the economy due to lack of government revenue (Corak, 2013). Government Initiatives to Lower Economic Inequality a) Progressive taxation – governments and local authorities should tax the wealthy proportionally higher as compared to the poor and this will help to minimize the income inequality amount within the cities (Autor, 2014). b) Product subsidization or nationalization – by lowering the cost of basic services and goods such as healthcare, housing and food enables the government to effectively enhance the poor people’s purchasing power in the society (Autor, 2014). c) Public education – by providing affordable education systems to the society helps to increase the skilled labor force supply and thereby minimizing the income inequality brought about by the differentials in education (Autor, 2014).
Din and Haider(2013) studied the impact of aid on the economic growth of the country. Ramsey Cass Koopman's growth model has been used. Results show that foreign aid has a positive impact on the economy but good governance plays an important role but external debt has a negative role and and is the reason for creating burden on the country Alan(2013) studied the impact of foreign aid on the economic growth of the country. Secondary data has been used where as government spending on education is the independent variable. Results conclude that the lack of management, poor planning and corruption are the reasons because of which aid is not being used
Another argument refutes the claim that lower taxes for the rich encourage them to invest more which brings about economic growth. In the late 1920s and once again in the earlier part of the last decade, a lot of money was put into speculative investments than productive investments. Hence, increased government spending on improving the labour force and infrastructure through revenue generated from taxes can possibly be more effective than investments in driving economic growth. Now let us look at the other side of the coin – the negative impact of taxation. Taking into consideration other factors such as government spending, business cycle conditions and monetary policy, research has consistently pointed towards the fact that taxes have a significant negative effect on economic
Due to the equilibrium minimum wage rate at point B it will reduce the output produced in the agricultural sector to OX’a. Thus Harris Todaro suggests that the economy should provide shadow wage or a wage subsidy to the urban sector so that they can reach to a point L which is on the PPC curve and where the indifference curve is tangent to the PPC curve. Thus this point L is a much optimum point as it is on a higher IC curve and also when the shadow wage is implemented in the urban sector than it would increase the output in the
Inflation: It has been suggested that NREGA has been a cause of inflation in the rural areas. This is due to the claims that NREGA spurs the demand side of the rural economy by increasing the disposable income of the rural households. The supply side remains unchanged due to inefficient spending on capital asset creation. Further, it is claimed that a Rs. 120 per day salary for a minimum of 100 days has reduced the incentive to work for the rural males.
From various empirical studies that have been done, there seems to be different results on the impact of growth on poverty reduction. Generally speaking, these results can be classified into three views: Firstly, some views assume that growth is not sufficient for reducing poverty. According to World Bank (2014), economic growth is needed to reduce poverty, but rapid and high performance of growth in developing countries is not sufficient in fostering poverty reduction under 3 percent globally by 2030, without additional policies to support the poor. In every country but particularly in developing country, economic growth is more sufficient to encourage poverty reduction and broader prosperity if the scheme of growth becomes more labour intensive and if poor people can work productively. As a result of the labour productivity, the sectoral content of growth and its impact on job creation may reduce the poverty rate.
Many farmers are turning to organic or ‘low-input” farming for economic survival. Organic farmers are less vulnerable than conventional farmers to natural and/or economic risks as their farming systems are more diversified. Future trends in commodity prices, new regulations and research will probably favour organic farmers. On a national scale organic farming could reduce commodity prices, reduce depletion of fossil fuels, improve wild and water life and ensure productivity of the land for future generations. Research into the cost of running organic and non-organic farming was conducted with the conclusion that the cost of running an organic farm were higher than those of a non-organic farm.
While differences in econometric model specifications, data, and definitions call for caution in the interpretation of results across countries, they do lend helpful insights into the connection between physical infrastructure and poverty reduction. A number of studies point to a significant impact of roads on poverty reduction through economic growth. Kwon (2000), analyzing Indonesian data, estimates a growth elasticity with respect to poverty incidence of 0.33 for good-road provinces and 0.09 for bad-road provinces. This implies that poverty incidence falls by 0.33% and 0.09%, respectively, for every 1% growth in provincial GDP. Basically, Provincial roads also appear to directly improve the wages and employment of the poor in a way that studies have shown that 1% increase in road investment is associated with drop of 0.3% in poverty incidence over five years.