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López-Calva, Luis-Felipe
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Poverty Global Practice, The World Bank
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January 31, 2023
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1 - 9 of 9
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Publication
The Unfairness of (Poverty) Targets
(World Bank, Washington, DC, 2013-02)Adopted on September 8, 2000, the United Nations Millennium Declaration stated as its first goal that countries "...[further] resolve to halve, by the year 2015, the proportion of the world's people whose income is less than one dollar a day and the proportion of people who suffer from hunger..." Each country committed to achieve the stated goal, regardless of their initial conditions in terms of poverty and inequality levels. This paper presents a framework to quantify how much initial conditions affect poverty reduction, given a level of "effort" (growth). The framework used in the analysis allows for the growth elasticity of poverty to vary according to changes in the income distribution along the dynamic path of growth and redistribution, unlike previous examples in the literature where this is assumed to be constant. While wealthier countries did perform better in reducing poverty in the last decade and a half (1995-2008), assuming equal initial conditions, the situation reverses: the paper finds a statistically significant negative relation between initial average income and poverty reduction performance, with the poorest countries in the sample going from the worst to the best performers in poverty reduction. The analysis also quantifies how much poorer countries would have scored better, had they had the same level of initial average income as wealthier countries. The results suggest a remarkable change in poverty reduction performance, in addition to the reversal of ranks from worst to best performers. The application of this framework goes beyond poverty targets and the Millennium Development Goals. Given the widespread use of targets to determine resource allocation in education, health, or decentralized social expenditures, it constitutes a helpful tool to measure policy performance toward all kinds of goals. The proposed framework can be useful to evaluate the importance of initial conditions on outcomes, for a wide array of policies. -
Publication
Deconstructing the Decline in Inequality in Latin America
(World Bank, Washington, D.C, 2013-07)Inequality in Latin America unambiguously declined in the 2000s. The Gini coefficient fell in 16 of the 17 countries where there are comparable data, and the change was statistically significant for all of them. Existing studies point to two main explanations for the decline in inequality: a reduction in hourly labor income inequality, and more robust and progressive government transfers. Available evidence suggests that it is the skill premium -- or, more precisely, the returns to primary, secondary, and tertiary education vs. no schooling or incomplete primary schooling -- that drives the decline in hourly labor income inequality. The causes behind the decline in returns to schooling, however, have not been unambiguously established. Some studies find that returns fell because of an increase in the supply of workers with more educational attainment; others, because of a shift in demand away from skilled labor. -
Publication
Teenage Pregnancy and Opportunities in Latin America and the Caribbean : On Teenage Fertility Decisions, Poverty and Economic Achievement
(World Bank, Washington, DC, 2012)The pregnancy project sought to expose the existence, and challenge the validity, of stereotypes about Hispanic women. The charade explored the underlying motivations of the many who responded with a wide range of reactions. The specific objectives of this regional study are: to establish a thorough description of the magnitude of the issue and its potential implications for social advancement; to advance the understanding of the risk factors, motivations and impacts at the household level-as a determinant of poverty and a cause of intra-and intergenerational poverty traps; to illuminate the coping mechanisms and their individual and social implications; to highlight the gender-related issues that have historically provoked asymmetric costs to boys and girls; and to provide elements that support specific policies on this matter. In the last decade, Latin America and the Caribbean (LAC) have been moving in the right direction and the region has experienced important gains in gender equality of endowments (assets) and economic opportunities. In most LAC countries, girls have been achieving gender parity in primary school enrollment and even outperforming boys at the secondary and tertiary level. The present report reviews the factors associated with teenage pregnancy and early childbearing and builds a framework to explore these issues systematically, towards the design of effective policy interventions in LAC. Teen pregnancy and early childbearing remain a challenge in the region, particularly given the association of these phenomena with poverty and lack of opportunities, and the concern that it may prevent women from taking full advantage of their human development assets and opportunities. The main message of the report is that poverty and lack of opportunities are key factors associated to early childbearing. -
Publication
Exiting Belindia? Lesson from the Recent Decline in Income Inequality in Brazil
(World Bank, Washington, DC, 2012)After decades of persistent disparities, inequality in Brazil has fallen steadily over the last fifteen years. This robust rate of decline has surpassed the pace of the Latin American region as a whole, and is taking place as inequality rises in several rapid-growth emerging economies in other regions. This document examines the recent trend in income inequality in Brazil, its key policy drivers and some of the challenges ahead. It aims at capturing some of the lessons behind Brazil?s experience to share with other economies in the region and beyond. -
Publication
Declining Inequality in Latin America in the 2000s : The Cases of Argentina, Brazil, and Mexico
(World Bank, Washington, DC, 2012-10)Between 2000 and 2010, the Gini coefficient declined in 13 of 17 Latin American countries. The decline was statistically significant and robust to changes in the time interval, inequality measures, and data sources. In-depth country studies for Argentina, Brazil, and Mexico suggest two main phenomena underlie this trend: a fall in the premium to skilled labor and more progressive government transfers. The fall in the premium to skills resulted from a combination of supply, demand, and institutional factors. Their relative importance depends on the country. -
Publication
Income Inequality and Violent Crime : Evidence from Mexico's Drug War
(World Bank, Washington, DC, 2014-06)The relationship between income inequality and crime has attracted the interest of many researchers, but little convincing evidence exists on the causal effect of inequality on crime in developing countries. This paper estimates this effect in a unique context: Mexico's Drug War. The analysis takes advantage of a unique data set containing inequality and crime statistics for more than 2,000 Mexican municipalities covering a period of 20 years. Using an instrumental variable for inequality that tackles problems of reverse causality and omitted variable bias, this paper finds that an increment of one point in the Gini coefficient translates into an increase of more than 10 drug-related homicides per 100,000 inhabitants between 2006 and 2010. There are no significant effects before 2005. The fact that the effect was found during Mexico's Drug War and not before is likely because the cost of crime decreased with the proliferation of gangs (facilitating access to knowledge and logistics, lowering the marginal cost of criminal behavior), which, combined with rising inequality, increased the expected net benefit from criminal acts after 2005. -
Publication
Equity for Sustained Growth: Pernambuco State Equity Assessment
(World Bank, Washington, DC, 2014-06-04)Starting from the aggregate, this report first describes how Pernambuco has fared with respect to the rest of Brazil, both in terms of economic and social welfare performance, over the last decade (2001-2012). In a context of widespread economic growth, Pernambuco has done particularly well in recent years, similar to or above the national average. A key challenge concerns the longer-term, where – notwithstanding the positive performance of recent years-the same level of growth may not be as easily sustained. The solid economic performance has been reflected in an improvement of social indicators, also associated with the governments interiorizacao strategy, a policy developed explicitly to increase the coverage of public services in underserved areas, with a focus on the interior of the state. The decline in poverty rates displays a trajectory towards convergence with Brazil and recently, a faster than national decline of the Gini has brought Pernambucos income inequality below the national and Northeast level. -
Publication
Declining Wages for College-Educated Workers in Mexico: Are Younger or Older Cohorts Hurt the Most?
(World Bank, Washington, DC, 2016-01)Wage inequality has declined in Mexico since 2000. Using data from Mexican labor surveys for the period between 2000 and 2014, this paper investigates whether the decline was driven by wages declining more sharply for younger or older workers. The analysis finds that the wages of older workers declined and the decline was more pronounced in the older cohort. This would seem to support the hypothesis that older workers' skills have become obsolete. -
Publication
Is There Such Thing As Middle Class Values? Class Differences, Values and Political Orientations in Latin America
( 2011-11-01)Middle class values have long been perceived as drivers of social cohesion and growth. This paper investigates the relation between class (measured by position in the income distribution), values, and political orientations using comparable values surveys for six Latin American countries. The analysis finds that both a continuous measure of income and categorical measures of income-based class are robustly associated with values. Both income and class tend to display a similar association to values and political orientations as education, although differences persist in some important dimensions. Overall, there is no strong evidence of any "middle class particularism": values appear to gradually shift with income, and middle class values are between the ones of poorer and richer classes. If any, the only peculiarity of middle class values is moderation. The analysis also finds changes in values across countries to be of much larger magnitude than the ones dictated by income, education, and individual characteristics, suggesting that individual values vary primarily within bounds dictated by each society.