the opposite effect (Table 9). Using 10-year lags gives qualitatively similar results, with higher shares of economic activity and employment in services and industry strengthening the elasticity while a higher weight of agriculture lowers it. Next to boosting economic growth in itself, the process of structural transformation also seems to boost the extent to which growth benefits households. None of the other variables listed in Annex Table 2 were statistically significant in any of the regressions after adjusting for multiple hypotheses testing.<sup>28</sup> Repeating the analysis using HFCE instead of GDP confirms significance of the mediating factors found earlier (for GDP), and identifies several others (Table 10). Most notably, higher fertility rates, population growth and higher age dependency ratio are associated with a lower passthrough between economic growth and household welfare levels. This is a relevant finding since population growth and fertility rates remain the highest in SSA. Second, more education variables turned out to be significant in HFCE regressions than in regressions using GDP as a measure of economic growth, highlighting the importance of human capital in spreading the benefits of growth. Secondary education in particular amplifies the extent to which growth in HFCE translated into poverty reduction. Higher public spending on secondary education is also associated with a larger passthrough between HFCE and survey mean consumption. Lower rural accessibility and higher incidence of violent conflicts are associated with a significantly lower passthrough between economic growth and wellbeing. While the analysis in this section is correlational and exploratory, it suggests that the effective provision of basic public services, in particular basic education, and infrastructure and the process of structural transformation strengthen the effect of economic growth on household welfare and poverty reduction. The provision of basic education services increases the passthrough between growth and household monetary welfare, as do basic infrastructure assets such as access to electricity and safe drinking water and basic sanitation. High fertility and rapid population growth constrain the growth-poverty relationship through increasing the age dependency ratio. The process of structural transformation whereby labor shifts from agriculture to services and industry, and from rural to urban areas, is associated with a greater welfare-enhancing effect of aggregate economic growth. Finally, the extent to which economic growth benefits households is weakened by exposure to violence and conflict. The findings of our analysis complement those of Thorbecke and Ouyang (2022), who argued for “pro-growth poverty reduction strategies”, as direct interventions in poverty reduction were found to result in faster growth, which in its turn results in faster poverty reduction. Our results suggest another channel, that direct interventions that are good for the poor (basic education and literacy, access to electricity, access to drinking water and sanitation, etc.) also amplify the passthrough between aggregate economic growth and household welfare, sharing the benefits of economic growth more widely.

# 4. Conclusions

In this paper we revisit the growth elasticity of poverty based on an updated database of successive and comparable growth spells covering the period 1981-2021. We focus on three main questions: (i) does SSA, the continent with the highest poverty rate and also the slowest progress on poverty reduction, have a GEP that is significantly lower relative to the rest of the world, (ii) has the GEP changed over time (that is, has economic growth on average become more or less poverty-reducing over time), and (iii) are there

> 28 Certain human capital variables like mortality rates and intergenerational mobility had significant p-values, but these disappeared once using Anderson’s q values.

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