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Ethno-Racial Poverty and Income Inequality in Brazil

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  • Claudiney Pereira

    (Arizona State University)

Abstract

Fiscal policy played an important role in reducing poverty and inequality in Brazil (Higgins and Pereira, 2014) over the last fifteen years, but how much redistribution and poverty reduction is being accomplished across ethnic groups? How was the ethno-racial divide affected by fiscal policy? We estimate the effects of taxes and social spending on inequality and poverty among ethnic groups using household survey. We find that direct transfers have similar effects on inequality across ethnic groups, but the reduction is larger for pardos after adding the monetized in-kind benefits (health and education). However, the income ratio between whites and non-whites is virtually unchanged. Poverty is reduced after direct transfers, but the reduction is higher for whites despite the prevalence of poverty is at least twice as high among pardos, blacks, and indigineous. The positive effects on poverty is tempered by a deleterious effect from indirect taxes. In addition, per capita transfers are on average higher for whites and benefits can twice as large as those for non-whites. Fiscal interventions did not have a significant impact in reducing the divide between whites and non-whites in Brazil.

Suggested Citation

  • Claudiney Pereira, 2016. "Ethno-Racial Poverty and Income Inequality in Brazil," Commitment to Equity (CEQ) Working Paper Series 60, Tulane University, Department of Economics.
  • Handle: RePEc:tul:ceqwps:60
    as

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    File URL: http://repec.tulane.edu/RePEc/ceq/ceq60.pdf
    File Function: Revised version, 2017
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    References listed on IDEAS

    as
    1. Ferreira, Francisco H. G. & Leite, Phillippe G. & Litchfield, Julie A., 2008. "The Rise And Fall Of Brazilian Inequality: 1981–2004," Macroeconomic Dynamics, Cambridge University Press, vol. 12(S2), pages 199-230, September.
    2. Campante, Filipe R. & Crespo, Anna R. V. & Leite, Phillippe G. P. G., 2004. "Desigualdade Salarial entre Raças no Mercado de Trabalho Urbano Brasileiro: Aspectos Regionais," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 58(2), April.
    3. Sean Higgins & Claudiney Pereira, 2014. "The Effects of Brazil’s Taxation and Social Spending on the Distribution of Household Income," Public Finance Review, , vol. 42(3), pages 346-367, May.
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    Cited by:

    1. Marisa Bucheli & Maximo Rossi & Florencia Amábile, 2018. "Inequality and fiscal policies in Uruguay by race," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(3), pages 389-411, September.

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    More about this item

    Keywords

    Fiscal policy; great divide; Brazil; inequality; ethno-racial;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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