How growth and inequality affect poverty / Como crescimento e desigual afetam a pobreza

AUTOR(ES)
DATA DE PUBLICAÇÃO

2006

RESUMO

The paper shows the formulas and discuss the proceedings for estimating the growth and inequality elasticities of Foster, Greer and Thorbecke?s measures (FGT), that measures the magnitude of the effects of changes in mean income and inequality on poverty. The models that used the elasticities with respect to the Theil?s L index computed by the Log-normal Method in a regression analysis were able to explain reasonably well the observed changes in the poverty measures for the Brazilian Federation Units from 1992 to 2004, verifying that the performance of this model is significantly better than the others. It is shown that the empirical application of the inequality elasticities for the class of FGT measures under the Lognormal Method, whose general expression for is derived in this paper, is more adequate than the utilization of the inequality elasticities derived by Kakwani (1990) and commonly used in the literature. Using the eslasticities for the FGT measure with , it is shown that growth in mean income and reduction in inequality always imply a reduction in poverty and that the extension that each one of these factors alters the poverty measure depends on the properties of the initial income distribution. It is observed that the absolute values of the growth and inequality elasticities increase with the initial level of mean income and decrease with the initial level of inequality. Analyzing the values of the elasticities for the Brazilian Federation Units in 2004, it is shown that the poverty measure is elastic with respect to the mean income and to the Theil?s L index in each Federation Unit, but the values of the elasticities differ substantially among Federation Units, being lower in the states of the Northeast Region and Tocantins. The elasticities we also used in a simulation exercise of poverty trajectories in Brazil during the decennium 2004/2114, that suggests the possibility of large reductions in poverty, in a short period of time, with a regional composition of economic growth and inequality reduction that emphasizes the poorest regions in the country, even accompanied by modest economic growth, that gives better results than alternative trajectories with high economic growth without reduction in inequalities. The conclusion is that the main question of poverty reduction in Brazil it is not simply the need for fast economic growth but that the results will be more effective with a type of economic growth that reduces the social and regional disparities in the country. Based on the results, policies that might be implemented to reduce poverty in Brazil are discussed, pointing out the importance of combining growth and redistributive policies, taking into account the regional differences

ASSUNTO(S)

igualdade poverty inequality desenvolvimento economico pobreza economic growth

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