On the one hand, the authors analyze the poverty index and income per capita using the elasticity of poverty with respect to income per capita, in order to study the relationship between economic growth and poverty. …show more content…
On the other hand, Besley and Burgess (2003) also add a measure of income inequality to the previous analysis, to examine whether changes in inequality is correlated to poverty, along with change in income per capita. Nevertheless, these results provide confirmatory evidence that there is a positive and significant relationship between these two variables; in other words, the wider the gap between the rich and the poor, the deeper the poor fall into poverty. Based on the analysis between economic growth, inequality and poverty, Besley and Burgess (2003) present six suggested agendas for poverty reduction. According to the authors, accumulating human capital is one of the main source for economic growth, in which investment in education is key to escape from poverty. In addition, due to the limit access to banks and other financial institutions, the poor is more likely to have less opportunity for investment in capital for their businesses or any other economic activities. For this reason, the authors suggest that expanding access to credit for the poor can be another way to …show more content…
According to the annual Education for All Global Monitoring Report (2014), 250 million children are unable to read, write, despite the fact that about half of them are attending school, which costs these developing countries an estimated of $129 billion annually in wasted government spending on education. As mentioned in the same report (2014), this situation occurs because of low quality of education such as low-skilled teachers, scarcity of textbook and learning materials, undeveloped material facilities such as school, classroom. The lack of trained teachers can be seen as a systematic problem; To be specific, because the number of educators with advanced degrees are limited in these developing countries, teachers have less access to professional development training than those in the developed nations. From economic perspective, change in expectation of future conditions will have an effect on labor supply. In order to increase labor supply of teachers who hold masters? or doctorate, government in developing countries should not only promise well-paid salary for professional development trainer jobs, but also offer wide range of employee benefits for these people. In addition, government could provide a proposal for retirement savings plan,