Other Poverty Study
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Publication
Poverty and Food Security in Brazil during the Pandemic
(Washington, DC, 2022-04)In contrast with the rest of Latin America and the Caribbean, Brazil’s poverty rate is estimated to have decreased between 2019 and 2020 to 13.1 percent. Auxílio Emergencial (AE), a large emergency cash transfer program launched in April 2020, is believed to be the main driver of that decrease, because it more than offset economic losses caused by the COVID-19 pandemic. Nonetheless, food insecurity (FI) estimates showed an opposite trend: Severe and moderate FI went up in 2020. This apparent paradox can be mostly explained by the way in which poverty and FI are measured: Measurements of poverty are based on annualized income estimates, while those of FI are based on the occurrence of an event, whereby the sudden, uncompensated loss of a job or reduction of benefits (such as AE) can turn into the loss of a household’s ability to feed itself in the short term. In 2021, both poverty and FI may have increased. Simulations suggest that poverty increased in 2021 to 18.7 percent. Meanwhile, about 18 percent of households reported running out of food in the past 30 days owing to a lack of resources, twice the pre-pandemic rate. Overall and food inflation, a sluggish labor market recovery with falling real wages, and the significant scaling down of the AE program are all factors in this trend. The war in Ukraine has pushed inflationary expectations upward. Given the projected 0.7 percent gross domestic product (GDP) growth for 2022, labor incomes are not expected to boost households’ consumption levels significantly. Coupled with the complete elimination of AE, poverty and FI may further deteriorate in 2022. -
Publication
Latin America and the Caribbean Macro Poverty Outlook: Country-by-Country Analysis and Projections for the Developing World
(Washington, DC, 2022-04)This edition of the Macro Poverty Outlook periodical contains country-by-country forecasts and overviews for GDP, fiscal, debt and poverty indicators for the developing countries of the Latin America and the Caribbean region. Macroeconomic indicators such as population, gross domestic product and gross domestic product per capita - and where available – other indicators such as primary school enrollment, life expectancy at birth, total greenhouse gas emissions and inflation, among others, are included for each country. In addition to the World Bank’s most recent forecasts, Key conditions and challenges, recent developments and outlook are briefly described for each country in the region. -
Publication
Building an Equitable Society in Colombia
(World Bank, Washington, DC, 2021-10-26)Colombia’s high level of inequality is a core constraint to economic growth and social progress. The country has one of the highest levels of income inequality in the world, the second highest among 18 countries in Latin America and the Caribbean (LAC), and the highest among all OECD countries. The disparities in income across adults grow from gaps that open early in life in opportunities for high-quality childhood development, education, and health care services. Inequality in access to good jobs further amplifies these gaps, making Colombia among the countries where inequalities are the most persistent across generations. Longstanding inequality across regions overlaps with the large gaps in welfare between Afro-descendants and indigenous Colombians and the rest of the population. The COVID-19 pandemic has further amplified disparities and threatens to have prolonged negative effects, but this is just one of many potential extreme shocks, including climate change, related disruptions, that could substantially widen the inequality gaps. Current tax and transfer policies at best have only a modest positive impact on these imbalances, so there is clearly ample potential to improve the redistributive role of fiscal policy in Colombia. Policy reforms across many areas could help to chart a more equitable future for the country. -
Publication
The Gradual Rise and Rapid Decline of the Middle Class in Latin America and the Caribbean
(World Bank, Washington, DC, 2021-05-20)Latin America and the Caribbean (LAC) reported over 30 million Coronavirus (COVID-19) cases and around 960,000 deaths as of May 2021. Official tracking data shows that Brazil, Colombia, and Argentina have the highest number of reported cases throughout LAC, which in turn is the region with among the highest numbers across all developing regions. Moreover, Brazil is the third-worst affected country worldwide, after the United States and India, with approximately 15.4 million infections. Dramatic declines in economic activity are expected throughout the LAC region due to the global pandemic. Unfortunately, many LAC countries entered the crisis with low potential economic growth and high levels of inequality, following the region’s recent period of stagnant growth. The 2020 COVID-19 crisis will likely reverse in a short time frame many of the social gains that took decades to materialize in Latin America and the Caribbean. In the past two decades, the region has seen a reduction in the number of people living in poverty by nearly half and an increase in the size of its middle class. Income inequality also decreased, as income growth has been primarily pro-poor in recent years. Despite variations across countries, most have experienced positive welfare gains since the early 2000s. However, the growth deceleration of 2014–2019 coupled with the dramatic fall in activity caused by the COVID-19 crisis will negatively impact living standards and well-being across the region. Poverty projections for 2020 suggest that the number of the poor increased in most LAC countries. Brazil, however, implemented a generous emergency transfer program that benefited almost 67 million people and lifted millions out of poverty. As a result, poverty in the LAC region is expected to decline marginally from 22 percent in 2019 to 21.8 percent in 2020. Had no mitigation measures been implemented, the region may instead have seen 28 million new poor in 2020. -
Publication
LSMS+ Program in Cambodia: Findings from Individual-Level Data Collection on Labor and Asset Ownership
(World Bank, Washington, DC, 2021-05-05)Established in 2016, the World Bank living standards measurement study - plus (LSMS+) program works to enhance the availability and quality of intra-household, self-reported, individual-disaggregated survey data collected in low- and middle-income countries on key dimensions of men’s and women’s economic opportunities and welfare. This report presents findings on gender differences in labor market outcomes and ownership of physical and financial assets in Cambodia, based on a national survey that was implemented by the National Institute of Statistics (NIS) in 2019, with support from the LSMS+ program. -
Publication
An Opportunity for All: Venezuelan Migrants and Refugees and Peru's Development
(World Bank, Lima, 2019-11-24)Faced with the Venezuelan exodus of unprecedented magnitude in recent Latin American and Caribbean history, the main objective of this study is to determine the social, economic and sectoral implications that this phenomenon is having on Peru, in order to inform the public policy agenda with a view to development. The study presents an analysis which characterizes the different dimensions of the Venezuelan migration to Peru: from the trajectory to the country, the institutional reception and response framework, opportunities and challenges for social integration, gender dynamics, and the Venezuelan population’s access to services and insertion into the labor market. The analysis also provides recommendations that seek to contribute to the strengthening of a humane and orderly migration management, and to capitalize on the potential of an adequate integration of the migrant and refugee population in Peru. -
Publication
Do Labor Markets Limit the Inclusiveness of Growth in the Dominican Republic?
(World Bank, Washington, DC, 2017-08-01)The strong economic growth enjoyed by the Dominican Republic following its 2003 domestic crisis was not matched by similarly substantial progress in poverty reduction. While labor productivity grew by an estimated 39 percent between 2000 and 2013, real wages fell with the crisis in 2003/04, and, in 2013, remained below their pre-crisis level. This report presents an assessment of factors related to the functioning of the labor markets that constrained more inclusive growth in the Dominican Republic. It explores several hypotheses related to labor supply factors, job creation, and global trends in returns to labor, as well as issues with statistical measurements that contribute to explain the weak relationship observed between growth and poverty reduction. The analysis finds that growth appears to have been driven by productivity increases rather than by increases in labor inputs. At the same time, low-skilled workers became increasingly concentrated in low-quality jobs and in sectors that saw low productivity growth, a trend enhanced by the loss of manufacturing jobs since 2000. Low rates of labor force participation, particularly among the poor, further limited the ability of households to benefit from growth. -
Publication
The Distributional Consequences of Increasing Tobacco Taxes on Colombia’s Health and Finances: An Extended Cost-Effectiveness Analysis
(World Bank, Washington, DC, 2017)Since 2008, when Colombia ratified the Framework Convention for Tobacco Control, available evidence of the impact of tobacco consumption, its health effects, and low tax revenues resulting from low tobacco taxation and prices had grown. By 2015, Colombia’s cigarette prices stood higher than only one other country in the region, and smoking had become the second leading modifiable risk factor for premature mortality. At that time, reduced fiscal revenues resulting from a sharp drop in oil prices, accompanied by growing demand for government spending arising partly from a change in legislation that increased health benefits for the lower socioeconomic population, led to a call for tax reform. The preparation of the document was accompanied by technical training, studies, and public fora with national and international experts, civil society, and academia presenting evidences and arguing for increased taxation to lead to a reduction in tobacco consumption and, in the future, a reduction in costs to the health system. The fora and open dialogue helped align strategies of the Ministry of Health and Social Protection, and the Ministry of Finance in presenting the reform to Congress for approval with a larger academic and civil society support for this measure. In December 2016, resulting from the above-mentioned efforts, Colombia passed a major tax increase on tobacco products with the goal of decreasing smoking and improving population health. While tobacco taxes are known to be highly effective in reducing the prevalence of smoking, they are often criticized as being regressive in consumption. This analysis attempts to assess the distributional impact (across income quintiles) of the new tax on selected health and financial outcomes. -
Publication
Cyclical Variations in Participation and Employment in Urban Brazil
(World Bank, Washington, DC, 2016-05-01)Brazilian labor markets have performed very strongly for most of the last 15 years, with dramatic increases in the employment rate of unskilled workers and significant declines in the overall unemployment rate. However, the economic and political developments and fiscal crisis of the last sixteen months in Brazil have resulted in a substantial decline in the rate of economic activity , a dramatic slowdown in the rate of new job creation a devaluation of the domestic currency and increasing concerns about the sustainability of the gains in poverty reduction and inequality accomplished during the years of the commodity boom. The decline in economic activity has raised concerns again about increasing unemployment rates, and the extent to which these developments will have an adverse impact on specific age and gender groups. Efforts to maintain or increase the proportion of the population employed in the aggregate or within any specific demographic group must take into consideration how the unemployment rate and the labor force participation rate of the group vary with changes in the level of economic activity. The sensitivity of the proportion of the population employed to changes in the level of aggregate demand is a key parameter informing the design of an appropriate and effective labor market policy. Specifically, teenagers and young women between 20-34 years of age comprise only 25 percent of the adult population, but they account for more than 50 percent of the cyclical variation in employment. In contrast, adult men between 26 and 64 years of age, who comprise 32.6 per cent of the population in the US account for only 23.6 percent of the change in the cyclical variation in employment. Estimates of the sensitivity of the proportion of the population employed to changes in the level of aggregate demand based on data from recent years that reflect the prevailing structural relationships between labor demand and employment and labor supply, labor force participation and unemployment are more useful for predicting how labor force participation is likely to react to the downturn in economic activity since the end of the commodity boom and the onset of the economic crisis in Brazil. The purpose of this paper is to examine two inter-related questions about the behavior of the labor market in Brazil. The first question is about the direction and sensitivity of the labor force participation rate, and the employment rate to changes in the level of aggregate demand. The second question relates to the differences in the cyclical sensitivity of these key variables across age and gender groups.The next section of the paper discusses the recent macroeconomic context, and some of the limitations associated with using Pesquisa Nacional por Amostra de Domicílios (PNAD) data to predict changes in the on the labor force participation rate of different age gender and skill groups during the crisis. Section 3 discusses the data and the model used -
Publication
Volatility and Inequality as Constraints to Shared Prosperity : Paraguay Equity Assessment
(World Bank, Washington, DC, 2015-01)Isolated by nature, and recovering from a period of historically low growth during the eighties and nineties, Paraguay faced many economic and social challenges at the beginning of the twenty first century. By year 2000, Paraguay GDP per capita was only 50 percent of the Latin American average and 34 percent of its MERCOSUR partners. High poverty and inequality were an inherent characteristic of the country. Yet, between 2003 and 2013, Paraguay has performed substantially well, seeing a reduction in moderate and extreme (monetary) poverty. This is essentially the result of a period of average significant growth combined with a reduction in inequality. This report explores the factors associated to the observed improvements in welfare and inequality, and investigates the challenges facing their sustainability, given the historical structural problems of Paraguay to maintain growth and improve social indicators. The underlying question is indeed whether the growth model and reduction in inequality are consistent with a positive social dynamics, taking a comprehensive definition of equity, which includes sustainable elimination of absolute poverty, enhancing equality of opportunity and strengthening agency for all groups.