Publication:
A Reversal in Shared Prosperity in Brazil: Brazil’s Poverty and Inequality since the 2014-2016 Domestic Crisis

Loading...
Thumbnail Image
Files in English
English PDF (356.21 KB)
1,160 downloads
English Text (86.85 KB)
58 downloads
Published
2020-07-31
ISSN
Date
2020-09-02
Author(s)
Ciaschi, Matias
Damasceno Costa, Rita
Rubião, Rafael M.
Paffhausen, Anna Luisa
Editor(s)
Abstract
The Coronavirus (COVID-19) pandemic arrived in Brazil while the poorest forty percent of the population was still recovering from the 2014-2016 crisis. After boosting Latin America’s reduction in poverty and inequality for the previous decade, Brazil’s 2014-2016 crisis and recovery are a stark departure from the previous decade as Brazil’s inclusive growth turned significantly regressive. As millions of jobs were lost, Brazil’s expansive social protection system was unable to effectively serve as a countercyclical protection system. This note analyses the recently released household data from 2012 through 2019 to better understand the severity of the 2014-2016 crisis across income groups, as well as the uneven and slow recovery experienced following this crisis.
Link to Data Set
Citation
Ciaschi, Matias; Damasceno Costa, Rita; Rubião, Rafael M.; Paffhausen, Anna Luisa; Sousa, Liliana D.. 2020. A Reversal in Shared Prosperity in Brazil: Brazil’s Poverty and Inequality since the 2014-2016 Domestic Crisis. © World Bank. http://hdl.handle.net/10986/34411 License: CC BY 3.0 IGO.
Digital Object Identifier
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections

Related items

Showing items related by metadata.

  • Publication
    COVID-19, Labor Market Shocks, Poverty in Brazil
    (World Bank, Washington, DC, 2020-07-31) Cereda, Fabio; Rubiao, Rafael M.; Sousa, Liliana D.
    In this note we estimate the short-term economic impact of the COVID-19 crisis on Brazilian families vis-a-vis labor shocks. The analysis, using a microsimulation model which incorporates subnational shocks from a computable general equilibrium growth model, shows that over 30 million workers in Brazil may see significant reductions in their labor income in 2020 due to the COVID-19 pandemic. Two-thirds of these workers are informal workers or own-account workers, groups without access to unemployment protection. These household shocks would reduce average per capita income by 7.6 percent, with the largest impact on the second and third quintiles of the income distribution. These income shocks are inequality-increasing: without any mitigation measures, inequality would increase by 4 percent. The country’s first line of defense, its existing unemployment insurance system, reduces the income shock to 5.3 percent. Even so, an additional 8.4 million Brazilians could fall into poverty. The policy responses announced by the government, and particularly the Auxilio Emergencial (AE) transfer, have the potential to fully absorb the labor income shock for the poorest 40 percent and reduce poverty. Yet, these results reflect annualized income, obscuring the sharp reduction in monthly income if demand shocks persist after the AE ends. Looking towards the next phase of the response, considering extensions of AE that are either less generous or more restricted provide a fiscally prudent approach for continuing to support Brazil’s most vulnerable.
  • Publication
    Poverty and Shared Prosperity 2020
    (Washington, DC: World Bank, 2020-10-07) World Bank
    Previous Poverty and Shared Prosperity Reports have conveyed the difficult message that the world is not on track to meet the global goal of reducing extreme poverty to 3 percent by 2030. This edition brings the unwelcome news that COVID-19, along with conflict and climate change, has not merely slowed global poverty reduction but reversed it for first time in over twenty years. With COVID-19 predicted to push up to 100 million additional people into extreme poverty in 2020, trends in global poverty rates will be set back at least three years over the next decade. Today, 40 percent of the global poor live in fragile or conflict-affected situations, a share that could reach two-thirds by 2030. Multiple effects of climate change could drive an estimated 65 to 129 million people into poverty in the same period. “Reversing the reversal” will require responding effectively to COVID-19, conflict, and climate change while not losing focus on the challenges that most poor people continue to face most of the time. Though these are distinctive types of challenges, there is much to be learned from the initial response to COVID-19 that has broader implications for development policy and practice, just as decades of addressing more familiar development challenges yield insights that can inform responses to today’s unfamiliar but daunting ones. Solving novel problems requires rapid learning, open cooperation, and strategic coordination by everyone: from political leaders and scientists to practitioners and citizens.
  • Publication
    Inequality Stagnation in Latin America in the Aftermath of the Global Financial Crisis
    (World Bank Group, Washington, DC, 2014-12) Barriga Cabanillas, Oscar; Cord, Louise; Lucchetti, Leonardo; Rodriguez Castelan, Carlos; Valderrama, Daniel; Sousa, Liliana D.
    Over the past decade (2003-12), Latin America has experienced strong income growth and a notable reduction in income inequality, with the region's Gini coefficient falling from 55.6 to 51.8. Previous studies have warned about the sustainability of such a decline, and this paper presents evidence of stagnation in the pace of reduction of income inequality in Latin America since 2010. This phenomenon of stagnation is robust to different measures of inequality and is largely attributable to the impact of the Global Financial Crisis on Mexico and Central America, where inequality rose after 2010 as labor income recovered. Moreover, this paper finds evidence that much of the continuation of inequality reduction after the crisis at the country level has been due to negative or zero income growth for households in the top of the income distribution, and lower growth of the incomes of the poorest households. The crisis also highlighted weaknesses in the region's labor markets and the heavy reliance on public transfers to redistribute, underscoring the vulnerability of the region's recent social gains to global economic conditions.
  • Publication
    A Shot in the Arm
    (World Bank, Washington, DC, 2022-09) Margolies, Amy; Boaz, Anglade; De Hoop, Jacobus Joost; Kim, Phillis; Mussini, Micaela; Paffhausen, Anna Luisa; Di Giorgio, Laura
    This brief reports the findings from innovative high frequency phone surveys (HFPS) on the drivers of COVID-19 vaccine acceptance and uptake in the Caribbean among the adult population.
  • Publication
    Poverty and Shared Prosperity in Brazil's Metropolitan Regions
    (Washington, DC, 2015-07-08) World Bank Group
    In the 20th Century, Brazil rapidly urbanized and is now not only an urban nation but a metropolitan one. Brazils sprawling regioes metropolitanas (metropolitan regions, or RMs, which are municipal clusters) are now home to almost 50 million people and much of the countrys economic vitality. The RM spatial level and its supporting governmental institutions have thus become critical to Brazils future development. While challenges remain for tackling deprivation in rural areas, poverty in Brazil is now predominantly urban. More than six in 10 Brazilians in extreme poverty were living in urban settings as of 2012. Of these, over a fourth was concentrated in the 10 largest RMs.

Users also downloaded

Showing related downloaded files

  • Publication
    The Critical Link
    (Washington, DC: World Bank, 2024-05-29) World Bank
    As the conduit between power demand and supply, the utilities that operate the world's transmission and distribution networks will be the critical link in the energy transition. Utilities will need to expand and modernize their networks to integrate variable renewable energy sources and meet growing demands for cleaner and more flexible power. According to the International Energy Association (IEA), the equivalent of the entire length of the world's grid networks will need to be added or refurbished by 2040 if countries are to achieve their energy and climate goals: As the off-takers of power generation, utilities need to be financially viable to enable the coming massive scale-up of investment in renewable energy projects and grid infrastructure. Utilities will also need to lead the way in providing access to electricity to the nearly 700 million people who still lack it today, mainly in Sub-Saharan Africa. In addition, utilities will need to serve consumers with ever-more varied and complex power needs and an increasing range of distributed generation options, such as rooftop solar. In short, power utilities will be the critical enablers of the energy transition and achieving universal access. This paper aims to place the need for sustainable utilities in lower-income countries (LICs) and middle-income countries (MICs) at the heart of the energy sector dialogue. The focus of this paper is on the utilities that manage power transmission or distribution grids.
  • Publication
    Digital Africa
    (Washington, DC: World Bank, 2023-03-13) Begazo, Tania; Dutz, Mark Andrew; Blimpo, Moussa
    All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.
  • Publication
    A Comparative Study of Ex-Combatant Reintegration in the African Great Lakes Region : Trajectories, Processes, and Paradoxes
    (World Bank Group, Washington, DC, 2014-07) Rhea, Randolph Wallace
    This study explores the reintegration processes that ex-combatants, as well as the communities that receive them, go through in the transition from being soldiers to being civilians across the Great Lakes region (GLR) of Africa (Uganda, Rwanda, DRC, RoC, and Burundi). This study uses a cross-country comparative approach capitalizing on survey data col¬lected between 2010 and 2012 from nearly 10,000 ex-combatants and community members across the GLR. This is the first time that such a large sample of data on ex-combatants from across multiple countries has been systematically compared and analyzed, thus the study represents the cutting edge of empirically driven quan-titative research on the reintegration processes of ex-combatants. An important component of the analysis of ex-com¬batant reintegration processes revolves around their position relative the broader community. As such, this study compares the reintegration processes of ex-com¬batants with those of community members and there¬fore, explores in turn the ways in which these two types of reintegration processes interact with each other. Notably, the core structure of the analysis presented in the detailed data analysis in annexes one and two is not only about ex-combatants and the processes through which they reintegrate, but also an investigation of commu¬nities themselves, i.e. their willingness and ability to absorb ex-combatants back into society. This study presents a snapshot of the social and economic dimensions of the overall reintegration process of ex-combatants and community members. However, the conceptual discussion and analysis of empirical evidence presented consolidates key knowledge and understanding about the broad trends of ex-combatants reintegration processes across the GLR. Further, the findings here no doubt carry weight for understanding ex-combatants reintegration processes in contexts beyond the GLR.
  • Publication
    World Bank Group Strategy for Fragility, Conflict, and Violence 2020–2025
    (World Bank, Washington, DC, 2020-02-27) World Bank Group
    By 2030, more than half of the world’s extreme poor will live in countries characterized by fragility, conflict, and violence. Preventing and mitigating fragility, conflict, and violence (FCV) is central to achieving the Sustainable Development Goals (SDGs) and the World Bank Group’s (WBG) twin goals of ending extreme poverty and promoting shared prosperity. The objective of the FCV Strategy is to enhance the WBG’s effectiveness to support countries in addressing the drivers and impacts of FCV and strengthening their resilience, especially for the most vulnerable and marginalized populations.
  • Publication
    World Development Report 2024
    (Washington, DC: World Bank, 2024-08-01) World Bank
    Middle-income countries are in a race against time. Many of them have done well since the 1990s to escape low-income levels and eradicate extreme poverty, leading to the perception that the last three decades have been great for development. But the ambition of the more than 100 economies with incomes per capita between US$1,100 and US$14,000 is to reach high-income status within the next generation. When assessed against this goal, their record is discouraging. Since the 1970s, income per capita in the median middle-income country has stagnated at less than a tenth of the US level. With aging populations, growing protectionism, and escalating pressures to speed up the energy transition, today’s middle-income economies face ever more daunting odds. To become advanced economies despite the growing headwinds, they will have to make miracles. Drawing on the development experience and advances in economic analysis since the 1950s, World Development Report 2024 identifies pathways for developing economies to avoid the “middle-income trap.” It points to the need for not one but two transitions for those at the middle-income level: the first from investment to infusion and the second from infusion to innovation. Governments in lower-middle-income countries must drop the habit of repeating the same investment-driven strategies and work instead to infuse modern technologies and successful business processes from around the world into their economies. This requires reshaping large swaths of those economies into globally competitive suppliers of goods and services. Upper-middle-income countries that have mastered infusion can accelerate the shift to innovation—not just borrowing ideas from the global frontiers of technology but also beginning to push the frontiers outward. This requires restructuring enterprise, work, and energy use once again, with an even greater emphasis on economic freedom, social mobility, and political contestability. Neither transition is automatic. The handful of economies that made speedy transitions from middle- to high-income status have encouraged enterprise by disciplining powerful incumbents, developed talent by rewarding merit, and capitalized on crises to alter policies and institutions that no longer suit the purposes they were once designed to serve. Today’s middle-income countries will have to do the same.