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Cash Transfer Programmes in Brazil: Impacts on Inequality and Poverty

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Author Info

  • Fabio Veras Soares

    ()
    (International Poverty Centre)

  • Sergei Suarez Dillon Soares

    ()
    (Institute of Applied Economic Research (IPEA))

  • Marcelo Medeiros

    ()
    (International Poverty Centre)

  • Rafael Guerreiro Osório

    ()
    (International Poverty Centre)

Abstract

This paper evaluates the contribution of cash transfer programmes to the observed fall in inequality in Brazil between 1995 and 2004 as well as its impact on poverty. We use the 2004 Brazilian National Household Survey (PNAD) that for the first time collected data on the incidence of some of the cash transfer programmes. We develop a methodology to separate out the income of different cash transfer programs, cross-check the survey information with administrative records, evaluate the incidence of the programmes, calculate their concentration indexes and decompose the Gini index into the contribution of each income source. We find that both BPC ? the means tested old age pension and disability grant programme ? and Bolsa Família are quite well targeted: 74% of BPC reported income and 80% of Bolsa Família reported income goes to families living below the poverty line (half of minimum wage per capita), and that they were jointly responsible for 28% of the fall in the Gini inequality between 1995 and 2004 (7% from BPC and 21% from Bolsa Família). This contribution is quite sizable since BPC and Bolsa Família together account for a tiny 0.82% of the total family income reported in the National Household Survey. It is also striking that pensions equal to the minimum wage ? contributory or not ? contributed 32% to the fall in the Gini index, but this better performance was due to the fact that they make up 4.6% of the total family income.

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File URL: http://www.ipc-undp.org/pub/IPCWorkingPaper21.pdf
File Function: First version, 2006
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Bibliographic Info

Paper provided by International Policy Centre for Inclusive Growth in its series Working Papers with number 21.

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Length: 35
Date of creation: Jun 2006
Date of revision:
Publication status: Published by UNDP - International Poverty Centre, June 2006, pages 1-35
Handle: RePEc:ipc:wpaper:21

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Related research

Keywords: distribution; Cash tranfer programmes; Poverty;

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References

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  1. Nanak Kakwani & Marcelo Neri & Hyun H. Son, 2006. "Linkages between Pro-Poor Growth, Social Programmes and Labour Market: The Recent Brazilian Experience," Working Papers 26, International Policy Centre for Inclusive Growth.
  2. Marcelo Medeiros & Debora Diniz & Flávia Squinca, 2006. "Cash Benefits to Disabled Persons in Brazil: an analysis of BPC - continuous cash benefit programme," Discussion Papers 1184, Instituto de Pesquisa Econômica Aplicada - IPEA.
  3. Marcelo Medeiros & Debora Diniz & Flávia Squinca, 2006. "Cash benefits to disabled persons in Brazil: An analysis of the BPC ? Continuous Cash Benefit Programme," Working Papers 16, International Policy Centre for Inclusive Growth.
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