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The Redistributive Impact of the Guaranteed Minimum Income Programme in Portugal

  • Carlos Farinha Rodrigues

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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File URL: http://pascal.iseg.utl.pt/~depeco/wp/wp092004.pdf
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Paper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2004/09.

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Date of creation: 2004
Date of revision:
Handle: RePEc:ise:isegwp:wp92004
Contact details of provider: Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC

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  1. Miguel Gouveia & Carlos Farinha Rodrigues, 1999. "The impact of a "Minimum Guaranteed Income Program" in Portugal," Working Papers Department of Economics 1999/03, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  2. Cowell, Frank A, 1984. "The Structure of American Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 30(3), pages 351-75, September.
  3. Beckerman, W, 1979. "The Impact of Income Maintenance Payments on Poverty in Britain, 1975," Economic Journal, Royal Economic Society, vol. 89(354), pages 261-79, June.
  4. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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