The Impact of Growth on Poverty. Evidence from the “Jobless Growth” in Albania

Development and growth are supposed to have a positive impact in the labormarketsbut “jobless growth” seems to be a major obstacle for thepoor to benefitfromthe positive growth performance experienced bythis country, as bymanyothercountriesaroundthe world. There is a wide disparity in the extent of povertyreduction that a growth process can achieve. Therefore, the impact of growthonpoverty is seen as depending on the extent to which growth generates employmentand good earning opportunities.If employment growth is achieved at the expenseof wage reductions, it may have an inadequate impact on poverty.Moreover,since in many lowincome countries the poor cannot afford to be unemployed,policies should be more concerned with raising the income of the working poor.In this paper we analyze the evidence from Albania with the purpose toexpandthe understanding of these issues,providing empiricaleffortinto the debatethatwhy growth is jobless in this country,by studying thecumulativeandsectoredemploymentandproductivity profile of growth and its correlation with observedpovertychanges.The main findings are related to thelabor market policies that can improve theworking conditions and thesectoredgrowth which achievesa greater povertyreduction.Interesting implications are explored for policy makers in order toapply successful strategies that enhance thepositiveimpact of growth on poverty