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

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.