Publication: Poverty Reduction without Economic Growth? Explaining Brazil's Poverty Dynamics, 1985-2004
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Published
2010
ISSN
03043878
Date
2012-03-30
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Brazil's slow pace of poverty reduction between the mid-1980s and the mid-2000s reflects both low growth and a low growth elasticity of poverty reduction. Using GDP data disaggregated by state and sector for a twenty-year period, this paper finds considerable variation in the poverty-reducing effectiveness of growth--across sectors, across space, and over time. Growth in the services sector was substantially more poverty-reducing than was growth in either agriculture or industry. Growth in industry had different effects on poverty across different states and its impact varied with initial conditions related to human development and worker empowerment. But because there was so little of it, economic growth actually played a relatively small role in accounting for Brazil's poverty reduction between 1985 and 2004. The taming of hyperinflation (in 1994) and a substantial expansion in social security and social assistance transfers, in large part mandated by the 1988 Constitution, accounted for the bulk of the overall reduction in poverty.
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Publication Poverty Reduction without Economic Growth? Explaining Brazil's Poverty Dynamics, 1985-2004(World Bank, Washington, DC, 2007-12)Brazil's slow pace of poverty reduction over the last two decades reflects both low growth and a low growth elasticity of poverty reduction. Using GDP data disaggregated by state and sector for a twenty-year period, this paper finds considerable variation in the poverty-reducing effectiveness of growth-across sectors, across space, and over time. Growth in the services sector was substantially more poverty-reducing than was growth in either agriculture or industry. Growth in industry had very different effects on poverty across different states and its impact varied with initial conditions related to human development and worker empowerment. The determinants of poverty reduction changed around 1994: positive growth rates and a greater (absolute) elasticity with respect to agricultural growth contributed to faster poverty reduction. 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It points to the importance of combining different policy options, such as educational expansion and targeted conditional redistribution schemes, to ensure that the poorest people in society are successfully reached. But the absence of market equilibria in these statistical models, as well as the strong stability assumptions which are implicit in their use, argue for extreme caution in their interpretation.Publication Beyond Oaxaca-Blinder: Accounting for Differences in Household Income Distributions(2008)This paper develops a method to decompose differences across distributions of household income, based on counterfactual distributions that 'lie between' the actually observed distributions. Our approach decomposes differences between any two income distributions (or functionals such as inequality or poverty measures) into shares due to price effects; occupational structure effects; and endowment effects. Comparing the household income distributions of the USA and Brazil in 1999, we find that most of Brazil's excess inequality (of 13 Gini points) is accounted for by underlying inequalities in the distributions of education and of non-labor income, notably pensions (between four and six Gini points each). Steeper returns to education in Brazil also make an important contribution (of two to five points). Differences in occupational structure and in racial and demographic composition are much less important.Publication Conditional Cash Transfers, Schooling, and Child Labor : Micro-Simulating Brazil's Bolsa Escola Program(Washington, DC: World Bank, 2003-05)A growing number of developing economies are providing cash transfers to poor people that require certain behaviors on their part, such as attending school or regularly visiting health care facilities. A simple ex ante methodology is proposed for evaluating such programs and used to assess the bolsa escola program in Brazil. 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