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Measuring the Contribution of Social Policies to Regional Inequality Dynamic in Brazil

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  • Raul Silveira Neto

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  • Carlos Azzoni

    ()

Abstract

We decompose the recent changes in regional inequality in Brazil into its components, highlighting the role of spatially blind social programs. We aggregate personal income micro data to the state level, differentiating 9 income sources, and assess the role of these components in the observed changes in regional inequality indicators. The main results indicate that the largest part of the recent reduction in regional inequality in Brazil is related to the dynamics in the market-related labor income, with manufacturing and services favoring inequality reduction. Labor income in agriculture, retirement and pensions, and property rents and other sources favored concentration. The social programs Bolsa Família and Benefícios de Prestação Continuada are responsible for more than 24% of the reduction in inequality, although they account for less than 1.7% of the disposable household income. Such positive impact on regional concentration is impressive, since the goals of the programs are clearly non-spatial.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa11p659.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa11p659

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  1. Fabio Veras Soares & Rafael Perez Ribas & Rafael Guerreiro Osório, 2007. "Evaluating the Impact of Brazil?s Bolsa Família: Cash Transfer Programmes in Comparative Perspective," Publications, International Policy Centre for Inclusive Growth 1, International Policy Centre for Inclusive Growth.
  2. Carlos R. Azzoni & Joaquim J. M. Guilhoto & Eduardo A. Haddad & Geoffrey J. D. Hewings & Marco A. Laes & Guilherme R. C. Moreira, 2007. "Social Policies, Personal And Regional Income Inequality In Brazil: An I-O Analysis Of The “Bolsa Família” Program," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting], ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Gr 003, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  3. Carlos R. Azzoni, 2001. "Economic growth and regional income inequality in Brazil," The Annals of Regional Science, Springer, Springer, vol. 35(1), pages 133-152.
  4. Christopher Candelaria & Mary Daly & Galina Hale, 2009. "Beyond Kuznets: persistent regional inequality in China," Working Paper Series, Federal Reserve Bank of San Francisco 2009-07, Federal Reserve Bank of San Francisco.
  5. Raul Silveira Neto & Carlos Azzoni, 2011. "Non-Spatial Government Policies and Regional Income Inequality in Brazil," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 45(4), pages 453-461.
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