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Inequality in Focus, May 2014: Possible Trade-offs Between the World Bank Group's Twin Goals, and Interview with Raj Chetty

By: Kathleen Beegle, Pedro Olinto, Carlos Sobrado, Hiroki Uematsu, and Yeon Soo Kim, with Maximillian Ashwill

This issue of Inequality in Focus takes a closer look at the World Bank Group's twin goals of ending extreme poverty and promoting shared prosperity. Should they be prioritized? Might they compete for attention and resources within countries? The authors explore these questions and more. The issue also includes an interview with Professor Raj Chetty, an award-winning economist and Harvard professor, on increasing opportunities and improving income mobility for the poor. His work on how the quality of teaching at all levels of education can substantially improve the outcomes and opportunities for students may have important implications for education in low-, middle-, and high-income countries alike.

Ending Extreme Poverty and Promoting Shared Prosperity: Could There Be Trade-offs Between These Two Goals?


Ending extreme poverty has been the World Bank Group's primary focus for the past few decades, but the introduction of the new goal to promote shared prosperity, in April 2013, added another priority, with important implications for global development efforts. This new goal solidifies a longer-standing, implicit focus on growth, which is widely considered necessary for poverty reduction--but is it a secondary tool to reduce extreme poverty, or are the two goals prioritized equally?

The authors tackle this question and open a conversation on what trade-offs may exist between the two goals, and how best to manage them. Read full article here

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Are there trade-offs between boosting the incomes of the bottom 40 percent in every developing country and ending extreme poverty globally? Close Quotes

Increasing Opportunities and Improving Income Mobility for the Poor: An Interview with Professor Raj Chetty


What keeps people at the bottom of the income ladder from climbing up and out of poverty?

Raj Chetty, an award-winning economist and Harvard professor, uses an innovative blend of empirics and theory, with help from big data, to produce work with important implications for global inequality, including showing which societal conditions allow people to more easily climb the income ladder.

His work on the importance of U.S. teachers—and how the quality of teaching at all levels of education can substantially improve the outcomes and opportunities for students—haseen cited by President Barack Obama, among others.

In an interview with Inequality in Focus, Chetty discusses these topics and others and the feasibility of adapting them to a broader, international context. Read the full interview here.

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If it’s true in the U.S., it is likely to be true in other developed countries, and perhaps in developing countries as well. Close Quotes

What drives inequality and how does it affect poverty reduction efforts and economic growth? The World Bank's Inequality in Focus newsletter seeks to answer these and many other questions. Click here to subscribe.