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Entrepreneurship is often seen as the cure-all solution for poverty reduction. Proponents argue that it leads to job creation, higher incomes and lower poverty rates in the cities in which it occurs. Others argue that many entrepreneurs are actually creating low-productivity firms serving local markets. Yet, despite this debate, little research has considered the impact of entrepreneurship on poverty in cities. This paper addresses this gap using a panel of US cities for the period between 2005 and 2015. We hypothesize that the impact of entrepreneurship will depend on whether it is in tradeable sectors, so likely to have positive local multiplier effects, or non-tradeable sectors, which may saturate local markets. We find that entrepreneurship in tradeables reduces poverty and increases incomes for non-entrepreneurs, a result we confirm using an instrumental variable approach, taking the inheritance of entrepreneurial traits as the instruments. In contrast, while there are some economic benefits from non-tradeable entrepreneurship, we find these are not large enough to reduce poverty. [ABSTRACT FROM AUTHOR]

This paper uses a comprehensive dataset on social spending covering the period 1984–2010 for developing countries, and the unique cross-country database on poverty to explore the poverty-reducing role of social protection during financial crises. The results indicate that financial crises are associated with increases in the rates of growth of the poverty headcount and the poverty gap of 12% and 7%, respectively. These detrimental poverty effects of financial crises are significantly lower in countries with higher social spending, suggesting the importance of social protection for poverty reduction in times of crisis and potential gains from policy intervention. [ABSTRACT FROM AUTHOR]