IDEAS home Printed from https://ideas.repec.org/p/tul/ceqwps/103.html
   My bibliography  Save this paper

Income Distribution in Brazil During the 2010s: A Lost Decade in the Struggle Against Inequality and Poverty

Author

Listed:
  • Rogério J. Barbosa
  • Pedro H. G. Ferreira de Souza
  • Sergei S. D. Soares

Abstract

In this paper we analyze Pesquisa Nacional por Amostra de Domicílios Contínua (PNAD Contínua) Microdata from 2012 to 2018 to document how the mid-decade economic recession reversed the trend of pro-poor growth that dated back to the early 2000s. Since the recession, there was a rise in inequality and poverty levels and aggregate welfare decreased. While average incomes surged from 2017 to 2018, they were still below their peak in 2014. More than 80% of all income growth between 2015 and 2018 accrued to the top 5%. Most distributional statistics suggest Brazil in 2018 was either back at the same levels or even worse-off than in 2012. This paper also relies on decomposition techniques to investigate the immediate causes behind this reversal of fortune. We find that the effects of the recession on the labor market explain a lot of the recent changes, but public transfers also played a role in distributional dynamics – either by action or inaction. Social assistance transfers and unemployment compensation failed to address rising inequality and poverty in any significant way. At the same time, Social Security contributed to surprisingly large increases in inequality due to the rise in pensions to the well-off. Finally, we show that in the past few years poverty rates were much more sensitive to changes in inequality than in average incomes. Indeed, if there were no increase inequality Brazil would have made further progress in reducing poverty even amid the recession.

Suggested Citation

  • Rogério J. Barbosa & Pedro H. G. Ferreira de Souza & Sergei S. D. Soares, 2020. "Income Distribution in Brazil During the 2010s: A Lost Decade in the Struggle Against Inequality and Poverty," Commitment to Equity (CEQ) Working Paper Series 103, Tulane University, Department of Economics.
    • Handle: RePEc:tul:ceqwps:103
    as

    Download full text from publisher

    File URL: http://repec.tulane.edu/RePEc/ceq/ceq103.pdf
    File Function: First version, 2020
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rodolfo Hoffmann, 2013. "How to measure the progressivity of an income component," Applied Economics Letters, Taylor & Francis Journals, vol. 20(4), pages 328-331, March.
    2. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
    3. Pedro H. G. Ferreira. de Souza & Rafael Guerreiro Osorio & Luis Henrique Paiva & Sergei Soares, 2019. "Os efeitos do programa Bolsa Família sobre a pobreza e a desigualdade: Um balanço dos primeiros quinze anos," One Pager Portuguese 429, International Policy Centre for Inclusive Growth.
    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. Gutiérrez-Romero, Roxana & Ahamed, Mostak, 2021. "COVID-19 response needs to broaden financial inclusion to curb the rise in poverty," World Development, Elsevier, vol. 138(C).
    2. Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 726-745.
    3. John Gibson, 2016. "Poverty Measurement: We Know Less than Policy Makers Realize," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(3), pages 430-442, September.
    4. Oasis Kodila-Tedika & Simplice A. Asongu & Julio Mukendi Kayembe, 2016. "Middle Class in Africa: Determinants and Consequences," International Economic Journal, Taylor & Francis Journals, vol. 30(4), pages 527-549, October.
    5. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Recent finance advances in information technology for inclusive development: a survey," Research Africa Network Working Papers 17/009, Research Africa Network (RAN).
    6. Desire Avom & Fabrizio Carmignani & Abdour Chowdhury, "undated". "Four Scenarios of Poverty Reduction and the Role of Economic Policy," MRG Discussion Paper Series 3109, School of Economics, University of Queensland, Australia.
    7. Patricia Justino & Julie Litchfield & Laurence Whitehead, 2003. "The Impact of Inequality in Latin America," PRUS Working Papers 21, Poverty Research Unit at Sussex, University of Sussex.
    8. Zengzeng Fan & Wei Zou, 2023. "A Three-Component Decomposition of the Change in Relative Poverty: An Application to China," Land, MDPI, vol. 12(1), pages 1-15, January.
    9. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    10. Augustin Kwasi Fosu, 2010. "Inequality, Income, and Poverty: Comparative Global Evidence," Social Science Quarterly, Southwestern Social Science Association, vol. 91(5), pages 1432-1446, December.
    11. Montalvo, Jose G. & Ravallion, Martin, 2010. "The pattern of growth and poverty reduction in China," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 2-16, March.
    12. Anh Tuan Bui & Cuong Viet Nguyen & Thu Phuong Pham, 2017. "Poverty among ethnic minorities: the transition process, inequality and economic growth," Applied Economics, Taylor & Francis Journals, vol. 49(31), pages 3114-3128, July.
    13. Kacem, Rami Ben Haj, 2013. "Monetary versus non-monetary pro-poor growth: Evidence from rural Ethiopia between 2004 and 2009," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 7, pages 1-22.
    14. 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.
    15. Ceriani,Lidia & Inchauste Comboni,Maria Gabriela & Olivieri,Sergio Daniel, 2015. "Understanding poverty reduction in Sri Lanka : evidence from 2002 to 2012/13," Policy Research Working Paper Series 7446, The World Bank.
    16. Sujin Choi & Hanho Kim, 2016. "The impact of conglomerate farming on the poor: Empirical evidence from the Brazil soy sector," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 19(2), pages 147-164, June.
    17. Abdelhafidh Dhrifi, 2013. "Financial Development and Poverty: What Role for Growth and Inequality?," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(4), pages 119-129, October.
    18. Jean-Claude BERTHELEMY, 2018. "Exits from the Poverty Trap and Growth Accelerations in a Dual Economy Model," Working Papers P234, FERDI.
    19. Tom Van Ourti & Philip Clarke, 2008. "The Bias of the Gini Coefficient due to Grouping," Tinbergen Institute Discussion Papers 08-095/3, Tinbergen Institute.
    20. Raouf Boucekkine & Giorgio Fabbri & Fausto Gozzi, 2012. "Egalitarism under Population Change. The Role of Growth and Lifetime Span," AMSE Working Papers 1211, Aix-Marseille School of Economics, France.

    More about this item

    Keywords

    Inequality; Poverty; Welfare; Income; Income Transfers;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:tul:ceqwps:103. 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: Nora Lustig (email available below). General contact details of provider: https://edirc.repec.org/data/detulus.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.