IDEAS home Printed from https://ideas.repec.org/a/ecr/col070/43457.html
   My bibliography  Save this article

Economic growth and income concentration and their effects on poverty in Brazil

Author

Listed:
  • Araujo, Jair Andrade
  • Marinho, Emerson
  • Campêlo, Guaracyane Lima

Abstract

We use panel data for Brazilian states from 1995 to 2009 to analyse the impact of economic growth and income inequality on poverty change in Brazil, seeking to evaluate the Bourguignon (2003) hypothesis that the more unequal a country is, the less effective economic growth will be at reducing poverty. To this end, we estimate poverty elasticities relative to income and inequality, specifying two dynamic econometric models estimated via the generalized method of moments (GMM) system developed by Arellano and Bond (1991), Arellano and Bover (1995) and Blundell and Bond (1998). The model-estimated results prompt the conclusion that the income growth effect on poverty reduction is smaller when the initial development level is low. The same is found when the initial inequality level is high. Therefore, regions with a low initial development level, high initial inequality or both present less favourable conditions for reducing poverty through income growth.

Suggested Citation

  • Araujo, Jair Andrade & Marinho, Emerson & Campêlo, Guaracyane Lima, 2017. "Economic growth and income concentration and their effects on poverty in Brazil," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    • Handle: RePEc:ecr:col070:43457
    as

    Download full text from publisher

    File URL: http://repositorio.cepal.org/handle/11362/43457
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Neri, Marcelo Côrtes, 2006. "Desigualdade, estabilidade e bem-estar social," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 637, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    3. -, 2017. "CEPAL Review no. 123," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    4. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    5. Rafael Perez Ribas & Ana Flávia Machado & André Braz Golgher, 2006. "Fluctuations and persistence in poverty: a transient-chronic decomposition model for pseudo-panel data," Textos para Discussão Cedeplar-UFMG td290, Cedeplar, Universidade Federal de Minas Gerais.
    6. Aart Kraay, 2004. "When is Growth Pro-Poor? Cross-Country Evidence," IMF Working Papers 2004/047, International Monetary Fund.
    7. Ahn, Seung C. & Schmidt, Peter, 1995. "Efficient estimation of models for dynamic panel data," Journal of Econometrics, Elsevier, vol. 68(1), pages 5-27, July.
    8. William R. Cline, 2004. "Trade Policy and Global Poverty," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 379, October.
    9. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    10. Kalwij, A.S. & Verschoor, A., 2004. "How Good is Growth for the Poor? The Role of Initial Income Distribution in Regional Diversity in Poverty Trends," Other publications TiSEM 199ed5a4-ad69-4cf9-81d7-b, Tilburg University, School of Economics and Management.
    11. Ms. Anne Epaulard, 2003. "Macroeconomic Performance and Poverty Reduction," IMF Working Papers 2003/072, International Monetary Fund.
    12. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
    13. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    14. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," The World Bank Economic Review, World Bank, vol. 11(2), pages 357-382, May.
    15. Gaurav Datt & Martin Ravallion, 2002. "Is India's Economic Growth Leaving the Poor Behind?," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 89-108, Summer.
    16. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    17. Kraay, Aart, 2004. "When is growth pro-poor? Cross-country evidence," Policy Research Working Paper Series 3225, The World Bank.
    18. Emerson Marinho & Francisco Soares, 2003. "Impacto do Crescimento Econômico e da Concentração de Renda Sobre a Reprodução da Pobreza nos Estados Brasileiros," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31st Brazilian Economics Meeting] b36, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    19. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    20. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March.
    21. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    22. Francois Bourguignon, 2004. "The Poverty-growth-inequality triangle," Indian Council for Research on International Economic Relations, New Delhi Working Papers 125, Indian Council for Research on International Economic Relations, New Delhi, India.
    23. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katsushi S. Imai & Wenya Cheng & Raghav Gaiha, 2017. "Dynamic and long-term linkages among agricultural and non-agricultural growth, inequality and poverty in developing countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 318-338, May.
    2. Suresh Babu, M. & Bhaskaran, Vandana & Venkatesh, Manasa, 2016. "Does inequality hamper long run growth? Evidence from Emerging Economies," Economic Analysis and Policy, Elsevier, vol. 52(C), pages 99-113.
    3. Roberto Dell'Anno & Adalgiso Amendola, 2015. "Social Exclusion and Economic Growth: An Empirical Investigation in European Economies," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 274-301, June.
    4. Jakub Bartak & Łukasz Jabłoński, 2020. "Inequality and growth: What comes from the different inequality measures?," Bulletin of Economic Research, Wiley Blackwell, vol. 72(2), pages 185-212, April.
    5. Maier, Rolf, 2005. "External Debt and Pro-Poor Growth," Proceedings of the German Development Economics Conference, Kiel 2005 23, Verein für Socialpolitik, Research Committee Development Economics.
    6. Rolf Maier, 2005. "Exchange Rate Regimes and Pro-Poor Growth," International Finance 0504008, University Library of Munich, Germany.
    7. Gravier-Rymaszewska, Joanna & Tyrowicz, Joanna & Kochanowicz, Jacek, 2010. "Intra-provincial inequalities and economic growth in China," Economic Systems, Elsevier, vol. 34(3), pages 237-258, September.
    8. Daniel Halter & Manuel Oechslin & Josef Zweimüller, 2014. "Inequality and growth: the neglected time dimension," Journal of Economic Growth, Springer, vol. 19(1), pages 81-104, March.
    9. Strieborny Martin, 2010. "Inequality and Growth: The Role of Beliefs and Culture," Cahiers de Recherches Economiques du Département d'économie 10.15, Université de Lausanne, Faculté des HEC, Département d’économie.
    10. Marinho, Emerson & Linhares, Fabricio & Campelo, Guaracyane, 2011. "Os Programas de Transferência de Renda do Governo Impactam a Pobreza no Brasil?," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 65(3), September.
    11. Eric Akobeng, 2017. "Gross Capital Formation, Institutions and Poverty in Sub-Saharan Africa," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 20(2), pages 136-164, April.
    12. Behzadan, Nazanin & Chisik, Richard & Onder, Harun & Battaile, Bill, 2017. "Does inequality drive the Dutch disease? Theory and evidence," Journal of International Economics, Elsevier, vol. 106(C), pages 104-118.
    13. Scott, K. Rebecca, 2015. "Demand and price uncertainty: Rational habits in international gasoline demand," Energy, Elsevier, vol. 79(C), pages 40-49.
    14. Amparo Castelló-Climent, 2004. "A Reassessment Of The Relationship Between Inequality And Growth: What Human Capital Inequality Data Say?," Working Papers. Serie EC 2004-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    15. Yerrabati, Sridevi, 2022. "Does vulnerable employment alleviate poverty in developing countries?," Economic Modelling, Elsevier, vol. 116(C).
    16. Duc Hong Vo & Thang Cong Nguyen & Ngoc Phu Tran & Anh The Vo, 2019. "What Factors Affect Income Inequality and Economic Growth in Middle-Income Countries?," JRFM, MDPI, vol. 12(1), pages 1-12, March.
    17. Humberto López & Luis Servén, 2015. "Too Poor to Grow," Central Banking, Analysis, and Economic Policies Book Series, in: Ricardo J. Caballero & Klaus Schmidt-Hebbel (ed.),Economic Policies in Emerging-Market Economies Festschrift in Honor of Vittorio Corbo, edition 1, volume 21, chapter 13, pages 309-350, Central Bank of Chile.
    18. Gründler, Klaus & Köllner, Sebastian, 2017. "Determinants of governmental redistribution: Income distribution, development levels, and the role of perceptions," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 930-962.
    19. Charles-Coll, Jorge A., 2010. "The optimal rate of inequality: A framework for the relationship between income inequality and economic growth," MPRA Paper 28921, University Library of Munich, Germany.
    20. Stimpfle, Alexander & Stadelmann, David, 2015. "The Impact of Fundamental Development Factors on Different Income Groups: International Evidence," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113128, Verein für Socialpolitik / German Economic Association.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecr:col070:43457. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Biblioteca CEPAL (email available below). General contact details of provider: https://edirc.repec.org/data/eclaccl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.