In this paper we evaluate the impact of the Portuguese Guaranteed Minimum Income Programme (GMI) on the income distribution in Portugal, and discuss its effectiveness and efficiency in fighting poverty and social exclusion in the country. We measure its impact on the distribution of household incomes and poverty, as well as the amount of government expenditure required to finance it. Our results show that 5.3% of households and 6.5% of the population are eligible to receive GMI. The programme has a small but positive impact on reducing inequality. Furthermore, the analysis of the effectiveness of the GMI shows that it has a positive impact on reducing the poverty rate. However, the most important consequence of the GMI is the sharp improvements in the measures of poverty intensity and severity. The efficiency indicators associated with the programme show that 92% of the transfers are awarded to poor people and that 89% of the transfers effectively contribute towards reducing the poverty gap. A very preliminary assessment of the take-up associated with the program shows that only 72 per cent of the families entitled to receive benefits from the programme are actually receiving it.
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Paper provided by Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon. in its series Working Papers with number
2004/09.
Length: Date of creation: 2004 Date of revision: Handle: RePEc:ise:isegwp:wp92004
Contact details of provider: Postal: Department of Economics, School of Economics and Management (ISEG), Technical University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL Web page: http://www.iseg.utl.pt/departamentos/economia/
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Find related papers by JEL classification: D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
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