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Econometric Insights into Economic Growth, Poverty and Social Protection in Asia: A Fresh Evidence

Introduction

Econometric insights into economic growth, poverty and social protection in asia: a fresh evidence. Econometric study on economic growth, poverty, and social protection in Asia. Reveals poverty's negative impact, social protection's positive role, advocating increased social security.

Abstract

The current research undertakes an empirical investigation into the effects of social protection and poverty on economic growth across varying income levels in the Asian context employing a balanced panel dataset covering the years 2005 to 2021. For this purpose, this analysis employs fixed and random effects estimations guided by the outcomes of the Hausman test. The empirical outcomes reveal distinct patterns across income groups as poverty exerts a negative and significant impact on economic growth in high-income, upper-middle-income, lower-middle-income, and overall Asian nations. Social protection exhibits positive and significant effect on economic growth in all income groups and in overall Asia except high income countries where it is insignificant. Labor has positive significance and governance has a negative significant impact on economic growth in all income groups and overall Asia except upper middle-income countries where both these indicators are insignificant. Capital is positive yet insignificant in all income groups and overall Asia except upper middle-income countries where it is positive and has significant impact on economic growth. Consequently, the study advocates for an increase in social security spending to bolster consumption for the sake of poverty reduction and consequently foster economic growth.

Review

This paper, titled 'Econometric Insights into Economic Growth, Poverty and Social Protection in Asia: A Fresh Evidence,' undertakes a timely and critical empirical investigation into the intricate relationships between social protection, poverty, and economic growth within the diverse Asian context. Utilizing a balanced panel dataset spanning from 2005 to 2021, the research aims to provide fresh evidence by disaggregating its analysis across various income levels. The chosen methodology, involving fixed and random effects estimations guided by the Hausman test, represents a standard and appropriate econometric approach for panel data analysis, setting a solid foundation for the study's findings. The empirical outcomes reveal nuanced and distinct patterns across different income groups. Poverty emerges as a consistent impediment, exerting a negative and significant impact on economic growth across high-income, upper-middle-income, lower-middle-income, and overall Asian nations. Conversely, social protection generally plays a positive and significant role in fostering economic growth in most income categories and overall Asia, with the notable exception of high-income countries where its effect is found to be insignificant. Furthermore, labor is positively significant across most groups, while governance shows a negative significant impact in the majority of categories, with both indicators being insignificant in upper-middle-income countries. Capital's impact is largely positive but insignificant, except for upper-middle-income countries where it demonstrates a positive and significant effect. The granular analysis across income groups is a significant strength of this study, offering a more refined understanding than aggregate studies. The findings provide substantial empirical backing for the study's primary policy recommendation: an increase in social security spending. This advocacy is logically linked to the observed negative impact of poverty and the generally positive role of social protection, aiming to bolster consumption, alleviate poverty, and thereby stimulate economic growth. This disaggregated approach contributes valuable new perspectives to the development literature, offering policymakers targeted information for crafting effective strategies for sustainable growth and poverty reduction in the region.

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