be particularly challenging in light of inequality’s impact on growth in the first place.<sup>12</sup> The same effect is however not found when growth is measured by GDP per capita (the interaction term between initial inequality and GDP growth is statistically insignificant in Column 3 of Table 5) or HFCE per capita (Column 3 of Table 6). In our sample, initial inequality does not affect the extent to which growth in GDP per capita or HFCE per capita translates into poverty reduction.<sup>13</sup> Column (4) in Tables 4-6 tests whether the GEP has changed through time. For this, we group the growth spells in three categories, depending on the timing of the end year of the spell. The three categories we consider are spells that ended before 2000, spells that ended between 2000 and 2010, and spells that ended in 2011 or later. Results show that the extent to which growth translates into poverty reduction has not changed through time, with none of the interaction effects between time period and growth (in either survey means, GDP per capita, or HFCE per capita) being statistically discernible from zero (spells that ended before 2000 are the reference category). Estimated coefficients are negative, indicating that, if any, elasticities have actually strengthened over time (though not significantly so). Lack of significant changes in GEP over time is robust to different categorization of spells.<sup>14</sup> Therefore, the recent slowdown in poverty reduction is not due to a weakening transmission between growth and poverty reduction, but rather due to the slowdown in growth.

3.2 The passthrough between economic growth and household welfare The finding from the previous section that the GEP with respect to GDP per capita is significantly lower in SSA relative to other regions while the GEP with respect to survey means is only marginally lower suggests that the passthrough between aggregate economic growth growth and household consumption growth is lower in Africa (that a given growth in per capita GDP results in less growth in survey mean consumption in SSA than elsewhere). This is confirmed by the results in Table 7, which show the results of regressing changes in survey mean consumption/income per capita during a spell on growth in GDP per capita, controlling for initial differences. On average, the passthrough between growth in GDP per capita and growth in survey means is statistically equivalent to unity, indicating that on average a 1 percent growth in GDP per capita is associated with a 1 percent growth in household welfare as measured from surveys. This result is robust to including country dummies (Column (2) of Table 7). The passthrough between economic growth and household consumption growth is however significantly lower in SSA (Column 4 of Table 7), suggesting that, relative to other regions, countries in SSA need higher economic growth rates to achieve a similar growth in household consumption expenditures as measured by surveys. This result holds when regressing household consumption expenditures from surveys on household final consumption expenditure as measured by national accounts (Table 8).<sup>15</sup> Strikingly, the elasticity between

> 12 For literature on the impact of inequality on economic growth, see, for instance,  Galor and Zeira, 1993, Bénabou, 1996; Aghion and Bolton, 1997. Dabla-Norris et al. (2015) for instance, find that rising inequality is associated with a medium-term decline in GDP growth.

> 13 Inequality as measured from surveys tends however to be substantially underestimated (see, for instance,  Chancel et al. (2023) for Africa).

> 14 As a robustness check, we assigned spells to time periods depending on which time-period “dominates” the spell. For instance, a spell that started in 2006 and ended in 2011 would be assigned to the 2011-2021 time-period according to our first definition, but would be assigned to the 2000-2010 period according to the second definition. The definition of the spell does not alter any of the results: Estimated coefficients of the interaction terms between growth and time-period are always negative but never statistically significant.

> 15 Household Final Consumption Expenditure measures the expenditure incurred by resident households on goods and services and is conceptually closest to household consumption expenditures as measured from surveys, though important differences remain – see Prydz et al., 2022.

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