The Rise and Fall of Brazilian Inequality: 1981-2004
World Bank, Development Research Group, Poverty Team, 2006 - Income distribution - 40 pages
"Measured by the Gini coefficient, income inequality in Brazil rose from 0.57 in 1981 to 0.63 in 1989, before falling back to 0.56 in 2004. This latest figure would lower Brazil's world inequality rank from 2nd (in 1989) to 10th (in 2004). Poverty incidence also followed an inverted U-curve over the past quarter century, rising from 0.30 in 1981 to 0.33 in 1993, before falling to 0.22 in 2004. Using standard decomposition techniques, this paper presents a preliminary investigation of the determinants of Brazil's distributional reversal over this period. The rise in inequality in the 1980s appears to have been driven by increases in the educational attainment of the population in a context of convex returns, and by high and accelerating inflation. While the secular decline in inequality, which began in 1993, is associated with declining inflation, it also appears to have been driven by four structural and policy changes which have so far not attracted sufficient attention in the literature, namely sharp declines in the returns to education; pronounced rural-urban convergence; increases in social assistance transfers targeted to the poor; and a possible decline in racial inequality. Although poverty dynamics since the Real Plan of 1994 have been driven primarily by economic growth, the decline in inequality has also made a substantial contribution to poverty reduction. "--World Bank web site.
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administrative poverty line allocation effect analysis Belo Horizonte Bolsa Escola Brazil's inequality Brazilian Inequality calculations candidate explanation change in inequality Correlation Coefficients counterfactual Cruzado Curitiba Dart and Ravallion decline in inequality disaggregated dynamic decompositions February 2006 February Ferreira and Litchfield Ferreira and Paes five channels gender Gini coefficient groups growth household head hyperinflation IBGE impact income effect income inequality income sources increase in inequality inequality and poverty inequality in Brazil inequality measures inflation tax INPC Litchfield 2001 Log inflation Lorenz curve macroeconomic mean incomes Metropolis overall inequality p-value Paes de Barros partial correlation partitions percentage points period population share Porto Alegre poverty and inequality poverty incidence poverty measures real wages redistribution component Relative mean residual returns to education returns to schooling rising inequality Rocha rural areas September 2004 Shorrocks 1982 social assistance transfers sub-period suggests Table total inequality urban and rural urban-rural World Bank zero incomes