Inchauste, Gabriela

Global Practice on Poverty and Equity, The World Bank
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Fields of Specialization
Fiscal incidence analysis, Poverty and social impact, Economic and social mobility, Informality, Distributional analysis, Public finance, Inequality, Development economics
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Global Practice on Poverty and Equity, The World Bank
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Last updated July 12, 2023
Gabriela Inchauste is a Lead Economist in the Poverty and Equity Global Practice of the World Bank. She currently leads work on Fiscal and Social Policies for poverty reduction and shared prosperity. Her research interests revolve around the distributional impact of fiscal policy, ex-ante analysis of the distributional impacts of policy reforms, and understanding the channels through which economic growth improves labor market opportunities for poverty reduction. Prior to joining the Bank, she worked at the International Monetary Fund and the Inter-American Development Bank where she contributed to operational and analytical activities in a number of countries covering topics such as macroeconomic forecasting, public expenditure policy, poverty and social impact analysis, fiscal and debt sustainability analysis, post-disaster needs assessments, and subsidy reform.She has published articles in academic volumes and journals on fiscal policy in low-income countries, decentralization, the distributional impacts of taxes and social spending, macroeconomic shocks and the poor, the informal sector, and the role of remittances in developing countries. A Bolivian national, she holds a Ph.D. in economics from the University of Texas at Austin.

Publication Search Results

Now showing 1 - 7 of 7
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    When Job Earnings Are Behind Poverty Reduction
    (World Bank, Washington, DC, 2012-11) Inchauste, Gabriela ; Azevedo, João Pedro ; Olivieri, Sergio ; Saavedra, Jaime ; Winkler, Hernan
    Improvement in labor market conditions has been the main explanation behind many of the poverty success stories observed in the last decade, that is the primary conclusion of an analysis of changes in poverty by income source. Changes in labor earnings were the largest contributor to poverty reduction for a sample of 16 countries where poverty increased substantially. In 10 of these countries, labor income explained more than half of the change in poverty, and in another 4 countries, it accounted for more than 40 percent of the reduction in poverty. A declining dependency rate accounts for over a fifth of the reduction in poverty in 10 out of 16 countries, while transfers and other non-earned incomes account for more than a quarter of the reduction in poverty in 9 of these countries. A further decomposition of the contribution of labor income to poverty reduction in Bangladesh, Peru, and Thailand found that changes in individual characteristics (education, work experience, and region of residence) were important, but that overall, increases in real earnings among the poor matter the most.
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    Decomposing the Recent Inequality Decline in Latin America
    (World Bank, Washington, DC, 2013-12) Azevedo, Joao Pedro ; Inchauste, Gabriela ; Sanfelice, Viviane
    Over the past decade, 12 of 14 Latin American countries have experienced a reduction in inequality. Based on a series of counterfactual simulations, the observed changes in inequality are decomposed in order to identify the main determinants of inequality. In contrast to methods that focus on aggregate summary statistics, the method adopted in this paper generates counterfactual distributions, so that the analysis can account for changes related to demographics, occupation, labor earnings and transfers, pensions, and other nonlabor income sources. The results show that for the majority of countries in the sample, the most important contributor to the observed decline in inequality has been the relatively strong growth in labor earnings at the bottom of the income distribution. In particular, most of the reduction in inequality can be attributed to an increase in earnings per hour for the bottom of the income distribution. The paper also contributes to the literature on inequality in Latin America by providing the Shapley-Shorrocks value of this decomposition.
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    Decomposing Distributional Changes in Pakistan
    (World Bank, Washington, DC, 2012-07) Inchauste, Gabriela ; Winkler, Hernan
    This paper quantifies the contributions to distributional changes observed in Pakistan over the last decade. In contrast to methods that focus on aggregate summary statistics, the method adopted in this paper generates entire counterfactual distributions to account for the contributions of demographics, labor and non-labor incomes in explaining poverty reduction. The results show that the most important contributor was the growth in income. Moreover, this growth in income seems to be driven by returns to individual and household endowments, pointing to productivity increases as the driving force behind poverty reduction. Lower dependency ratios, transfers and remittances also contributed to poverty reduction, albeit to a smaller extent. Growth in productivity, particularly between 2001-02 and 2005-06 is consistent with estimates from aggregate accounts, which points to productivity growth led by movements of labor force away from agriculture and into industry and services. If the objective is to reach similar or accelerated poverty reduction and productivity growth going forward, increased investment in rural areas will be needed.
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    Understanding Changes in Poverty
    (World Bank Group, Washington, DC, 2014-08-12) Inchauste, Gabriela ; Azevedo, João Pedro ; Essama-Nssah, B. ; Olivieri, Sergio ; Van Nguyen, Trang ; Saavedra-Chanduvi, Jaime ; Winkler, Hernan
    Understanding Changes in Poverty brings together different methods to decompose the contributions to poverty reduction. A simple approach quantifies the contribution of changes in demographics, employment, earnings, public transfers, and remittances to poverty reduction. A more complex approach quantifies the contributions to poverty reduction from changes in individual and household characteristics, including changes in the sectoral, occupational, and educational structure of the workforce, as well as changes in the returns to individual and household characteristics. Understanding Changes in Poverty implements these approaches and finds that labor income growth that is, growth in income per worker rather than an increase in the number of employed workers was the largest contributor to moderate poverty reduction in 21 countries experiencing substantial reductions in poverty over the past decade. Changes in demographics, public transfers, and remittances helped, but made relatively smaller contributions to poverty reduction. Further decompositions in three countries find that labor income grew mainly because of higher returns to human capital endowments, signaling increases in productivity, higher relative price of labor, or both. Understanding Changes in Poverty will be of particular relevance to development practitioners interested in better understanding distributional changes over time. The methods and tools presented in this book can also be applied to better understand changes in inequality or any other distributional change.
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    The Distributional Impact of Fiscal Policy in South Africa
    (World Bank Group, Washington, DC, 2015-02) Inchauste, Gabriela ; Lustig, Nora ; Maboshe, Mashekwa ; Purfield, Catriona ; Woolard, Ingrid
    This paper uses the 2010/11 Income and Expenditure Survey for South Africa to analyze the progressivity of the main tax and social spending programs and quantify their impact on poverty and inequality. The paper also assesses the redistributive effectiveness of fiscal interventions given the resources used. Because it applies the Commitment to Equity methodology, the results for South Africa can be compared with other middle-income countries for which the framework has also been applied. The main results are twofold. First, the burden of taxes -- namely the personal income tax, the value added tax, excises on alcohol and tobacco, and the fuel levy -- falls on the richest in South Africa and social spending results in sizable increases in the incomes of the poor. In other words, for the components examined, the tax and social spending system is overall progressive. Second, for these elements, fiscal policy in South Africa achieves appreciable reductions in income inequality and poverty. Moreover, these reductions are the largest achieved in the emerging market countries that have so far been included in the Commitment to Equity project. Although fiscal policy is equalizing and poverty-reducing, the levels of inequality and poverty that remain still rank among the highest in middle-income countries. Looking ahead, as South Africa grapples with slow economic growth, a high fiscal deficit, and a rising debt burden, addressing the twin challenges of high inequality and poverty will require not only much improved quality of public services, but also higher and more inclusive economic growth.
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    Understanding Poverty Reduction in Sri Lanka: Evidence from 2002 to 2012/13
    (World Bank, Washington, DC, 2015-10) Ceriani, Lidia ; Inchauste, Gabriela ; Olivieri, Sergio
    This paper quantifies the contributions to poverty reduction observed in Sri Lanka between 2002 and 2012/13. The methods adopted for the analysis generate entire counterfactual distributions to account for the contributions of demographics, labor, and non-labor incomes in explaining poverty reduction. The findings show that the most important contributor to poverty reduction was growth in labor income, stemming from an increase in the returns to salaried nonfarm workers and higher returns to self-employed farm workers. Although some of this increase in earnings may point to improvements in productivity, defined as higher units of output per worker, some of it may simply reflect increases in food and commodity prices, which have increased the marginal revenue product of labor. To the extent that there have been no increases in the volumes being produced, the observed changes in poverty are vulnerable to reversals if commodity prices were to decline significantly. Finally, although private transfers (domestic and foreign) helped to reduce poverty over the period, public transfers were not as effective. In particular, the reduction in the real value of transfers of the Samurdhi program during 2002 to 2012/13 slowed down poverty reduction.
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    Is Labor Income Responsible for Poverty Reduction? A Decomposition Approach
    (World Bank, Washington, DC, 2013-04) Azevedo, Joao Pedro ; Inchauste, Gabriela ; Olivieri, Sergio ; Saavedra, Jaime ; Winkler, Hernan
    Demographics, labor income, public transfers, or remittances: Which factor contributes the most to observed reductions in poverty? Using counterfactual simulations, this paper accounts for the contribution labor income has made to the observed changes in poverty over the past decade for a set of 16 countries that have experienced substantial declines in poverty. In contrast to methods that focus on aggregate summary statistics, the analysis generates entire counterfactual distributions that allow assessing the contributions of different factors to observed distributional changes. Decompositions across all possible paths are calculated so the estimates are not subject to path-dependence. The analysis shows that for most countries in the sample, labor income is the most important contributor to changes in poverty. In ten of the countries, labor income explains more than half of the change in moderate poverty; in another four, it accounts for more than 40 percent of the reduction in poverty. Although public and private transfers were relatively more important in explaining the reduction in extreme poverty, more and better-paying jobs were the key factors behind poverty reduction over the past decade.