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A Importância da Queda Recente da Desigualdade na Redução da Pobreza

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  • Ricardo Paes de Barros
  • Mirela de Carvalho
  • Samuel Franco
  • Rosane Mendonça
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    Abstract

    In this study we document the contribution of the recent decline on income inequality to the income?s growth of the poorest and consequently to the reduction of poverty and extreme poverty in the country. First, we investigate the income growth of the poorest. We demonstrated that, between 2001 and 2005, the national income grew 0,9% a year, but the richest lost. The annual income growth rate of the richest 10% and 20% was negative (?0,3 and ?0,1, respectively). Then, once the national income grew, the poorest necessarily have perceived some gain. In fact, the income growth rate of the poorest 10% reached 8% a.a. Therefore, the 2001?2005 period register two desirable transformations in the Brazilian income distribution: there was growth (although very modest) and the degree of inequality reduced significantly (the Gini coefficient, for example, decline 4,6%). Next, we analyze the huge decline on poverty in this period. We demonstrated that, on the contrary to the history of the country, the recent decline on poverty essentially resulted from the decline of inequality. The percentage of poor and also the extremely poor fell down 4,5 percentage points each. The novelty is that in this period the main determinant was the inequality decline and not the income growth. Finally, we investigate the degree of substitution and complementation between growth and inequality reductions to fight against poverty. We demonstrated that to reach the same decline on poverty, just counting with growth, it would be necessary to increase the income of all families in 14,5%, and to reach the same decline on extreme poverty it would be necessary to increase the income of all families in 22%.

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    Bibliographic Info

    Paper provided by Instituto de Pesquisa Econômica Aplicada - IPEA in its series Discussion Papers with number 1256.

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    Length: 26 pages
    Date of creation: Jan 2007
    Date of revision:
    Handle: RePEc:ipe:ipetds:1256

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