POVERTY AND INCOME INEQUALITY IN LATIN AMERICA DURING THE 1980s

On average, poverty and income inequality increased in Latin America during the 1980s. Forty-six percent of the increase in poverty took place in the cities of Brazil alone, though part of this reflects the migration of poor rural inhabitants to urban areas. There is strong evidence that both income inequality and poverty mirrored the economic cycle, rising during recession and falling during recovery. Economies that grew (e.g. Colombia, Costa Rica) performed better with respect to poverty and income inequality than those that stagnated. In particular, countries that failed to stabilize effectively (e.g. Brazil, Peru) experienced substantial increases in poverty. Educational attainment has the greatest correlation with both income inequality and the probability of being poor. From a policy standpoint, there is a clear association between the provision of education, lessening of income inequality, and poverty reduction.     

THE PERSISTENCE OF INCOME POVERTY AND LIFESTYLE DEPRIVATION: EVIDENCE FROM ITALY

This article estimates poverty persistence over an individual's lifetime, using two definitions: income poverty and a multidimensional index of lifestyle deprivation. We stress the ability of the two definitions to provide a generally consistent characterization of poverty persistence risks faced by various population subgroups, but also the additional insights to be gained by analysing the two definitions in parallel in a longitudinal context. The results of multiple‐spell hazard rate models highlight the weaknesses of the Italian labour market, the insufficiencies of the existing social security system, and the deep territorial dualism in generating persistent poverty for certain groups of the population.     

HOUSEHOLD SAVING IN THE '90s: EVIDENCE FROM CROSS-SECTION WEALTH SURVEYS

This paper uses a series of cross-section surveys to measure how wealth accumulation and active saving rates varied across cohort-groups during the early and mid 1990s. Our estimated rates of saving and wealth change across cohorts show a somewhat more dramatic life-cycle pattern than found in previous studies, in part because we use a new technique, and in part because the cross-section wealth surveys we use oversample the wealthiest families whose behavior dominates aggregate changes. Adjusting the wealth-change rates for bequests and subtracting out the capital gains component of wealth change move the estimates in the direction of results from previous studies, but the biggest changes in that direction result from excluding the top of the wealth distribution in each year.     

REAL INCOME LEVELS IN LATIN AMERICA

The measurement and inter-spatial comparison of Latin American real income levels calls for techniques which depart substantially from the conventional procedure of applying such official or free market exchange rates as happen to prevail in any given period. The reasons are varied, the main ones being that in an area such as Latin America prices are notoriously volatile, their structure differs radically from that encountered in other parts of the world, and the exchange rate system is characterized by frequent and usually irregular revisions, while in certain countries a multiple exchange rate system applies and no single factor is available for conversion purposes. In addition, there exists the problem common to all developing countries that the rates to a large extent reflect the exchange value of a limited number of export commodities vis-à-vis a wide range of imported goods and in no way typify the internal-external price relationship for the bulk of production which by its nature fails to enter into international trading transactions.
The author has endeavoured to circumvent these difficulties by adopting the often-discussed "purchasing power parity" approach whereby national accounts data are converted into a common monetary denominator (in this case, the U.S. dollar) expressed in "real" or quantitative terms which as far as possible eliminate inter-spatial price differences. Results are presented and analyzed, first for the base year 1960, and then for the period 1955–1964 at the level of main expenditure sectors as well as for the total gross domestic product.
To the extent that available statistics permitted, results for Latin American countries are also related to the United States and certain countries in Western Europe, a main objective being to determine the approximate dimension of the incomes "gap" and to ascertain whether this is increasing, decreasing or remaining very much unchanged in size.     

INCOME DISTRIBUTION STATISTICS IN LATIN AMERICA AND THEIR RELIABILITY

This paper is addressed to the question of how far income distribution statistics currently available in Latin America can be relied upon, either to assess the degree of inequality in the national distribution of income or to undertake comparisons between countries or over time. It gives a summary account of research carried out on Latin American data.
The sources available in Latin America for estimating income distributions are discussed. Concentrating the attention on household surveys conducted in various Latin American countries, an inventory of such surveys and their characteristics is offered, along with a detailed exposition of survey methods and income concepts used for estimating household income. Methods used for assessing the representativeness of samples are summarily reviewed. The case for comparing income data from household surveys and population censuses with national accounts estimates is put forward, along with the procedures and assumptions used for carrying out such comparisons. The relative discrepancy between the two sources is taken as indicative of the degree of underestimation of each type of income in each survey. An analysis of such discrepancies across the set of surveys considered gives clues on possible underestimation biases in measuring each type of income and total household income in different types of survey and in population censuses.
Differential effects on comparability of survey results call for appropriate methods of adjusting income distribution estimates to account for the missing incomes. A method for carrying out such an adjustment is applied to income distributions from a selected number of Latin American surveys. The results obtained provide an indication of how much difference it makes to use unadjusted or adjusted data to assess income concentration or to carry out comparisons over time or space.     

INCOME TAXES AND THE COMPOSITION OF PAY: EVIDENCE FROM THE BRITISH HOUSEHOLD PANEL SURVEY

According to the standard principal‐agent model, the optimal composition of pay should balance the provision of incentives with the individual demand for insurance. Do income taxes alter this balance? We show that the relative share of Performance‐related pay (PRP), on total pay is reduced by higher average and marginal income taxes. Empirical evidence based on the British Household Panel Survey is consistent with the theoretical predictions of the tax–augmented principal‐agent model. Our estimates suggest that a 10% reduction in the marginal income tax rate, holding the average tax rate constant, increases the share of PRP in total pay by 2.25–3.02%, depending on the empirical specification. Similarly, a 10% reduction in the average income tax rate, holding the marginal tax rate constant, increases the share of PRP in total pay by 5.10–5.27%.     

SUSTAINABILITY AND OUTREACH: A COMPARATIVE STUDY OF MFIs IN SOUTH ASIA AND LATIN AMERICA AND THE CARIBBEAN

Previous studies indicate that microfinance institutions (MFIs) in Latin America and the Caribbean (LAC) have different operational strategies to MFIs in South Asia (SA). Given the recent emphasis placed on the feasibility of MFIs to achieve the dual goals of outreach and sustainability concurrently, we examine and compare the relationship between sustainability and outreach of MFIs in LAC with MFIs in SA. Our results indicate that trade‐offs exist between outreach and sustainability in both regions. However, the severity of trade‐off is dependent on which goal MFIs decide to focus on in each region.     

GROWTH, POVERTY, AND INEQUALITY IN LATIN AMERICA: A CAUSAL ANALYSIS, 1970–94

Taking advantage of consistent poverty and income inequality data for 12 Latin American countries between 1970 and 1994, we analyze the determinants of changes in the incidence of urban and rural poverty and in Gini coefficients over spells of years, stressing in particular the role of aggregate income growth. We find that income growth reduces urban and rural poverty but not inequality. We also find that income growth is more effective in reducing urban poverty if the levels of inequality and poverty are lower, and the levels of secondary education higher. We show that there is an asymmetry in the impact of growth on poverty and inequality, with recession having strong negative effects on both poverty and inequality. Since growth does not reduce inequality, economic cycles create ratchet effects on the level of inequality. However, post-structural adjustment growth is quite effective at reducing poverty, particularly if inequality is low.     

PRODUCTIVITY GROWTH IN LATIN AMERICA OVER THE LONG RUN

The low pace of Latin American productivity growth in recent decades, despite extensive economic reforms, has yet to be understood in a longer‐run context where factors such as demographic changes, structural shifts, and investment levels can be taken fully into account. The OxLAD database provides comparable sectoral output and workforce series over 1900–2000 for the six leading economies in the region for the first time. Our analysis of this new dataset shows that: intersectoral resource reallocation reduced aggregate productivity growth in all three periods; total factor productivity growth was low throughout the century, and even negative in the closing three decades; and thus factor accumulation—investment in fixed capital and skilled labor—was the main source of productivity growth in Latin America during the twentieth century.     

收入增长和分配对我国农村减贫的影响-方法、特征与证据

改革开放30年来,在农村居民收入水平快速增长的大背景下,农村减贫进程却表现出明显的波动性和不一致性。基于此,本文在贫困分解的基础上,运用贫困弹性的动态特征,从理论和实证的角度探讨了收入增长和收入分配对贫困减少的影响,解释上述问题。文章发现:(1)人均收入水平越高,贫困越有可能和收入不平等联系在一起;(2)收入不平等越严重的地区,贫困对收入不平等的反应越迟钝;(3)1998年是我国农村反贫困性质发生改变的拐点。文章建议,今后农村反贫困政策的重点应从以促进收入增长的开发式扶贫向以改善收入分配为重点的社会保护式扶贫政策转变。     

ASSET POVERTY IN THE UNITED STATES, 1984–99: EVIDENCE FROM THE PANEL STUDY OF INCOME DYNAMICS

Using PSID data for the years 1984–99, we estimate the level and severity of asset poverty. We find that despite a sharp decline in the official poverty rate, the asset poverty rate barely budged over this period. Moreover, the severity of asset poverty increased during this period. The likelihood of being asset-poor decreased for those who are college graduates or married with children, whereas it increased for those who are white, for the unmarried elderly, and for those without a college degree. Lifetime events such as changes in job market, marital and homeownership status are correlated with transitions into and out of asset poverty.     

THE ESTIMATION OF POVERTY DYNAMICS USING DIFFERENT MEASUREMENTS OF HOUSEHOLD INCOME

If surveys offer two different measurements of household income, one can use them simultaneously to identify the potential effects of measurement error on the observed-income mobility of the poor. In this paper we investigate transition tables between subsequent income states. Latent Markov models are used to model incorrect classifications of income states. Misclassifications are interpreted as measurement error or spurious changes that are not consistent with a simple transition table model. The empirical results for the German Socio-Economic Panel (GSOEP) show that the observed transition tables overestimate the mobility between poverty states.     

THE BANKING SYSTEM CRISIS IN LATIN AMERICA

A major "bootstraps" challenge lies ahead for Latin America: finding enough savings capacity at home to finance needed increases in investment during the 1990s. The banking system throughout the region cannot carry out its role in this process, however, due to a ruinous process of internal debt accumulation and corporate bankruptcy—the domestic analog of the external debt crisis of the 1980s.
This paper briefly reviews recent financial liberalization experiences in Latin America. It identifies three factors as contributing to the undermining of the banking system and the failure of liberalization in the region: (i) foreign exchange risks that the banking system has assumed, (ii) unsound lending and borrowing practices, and (Hi) inadequate regulatory and supervisory frameworks. A case study of Chile illustrates the dynamics of frustrated reform and privatization in the financial markets.
The paper concludes that Latin America has no real choice but to pursue liberalization and to rely more on the private sector in the financial markets. The path to deeper financial markets is extremely complex, however, and Latin America must continue seeking the proper balance between state sector supervision and intervention and an increased role for the private sector. An agenda for research points to some thorny issues awaiting empirical investigation.     

THE RETURNS TO EDUCATION AND TRAINING: EVIDENCE FROM THE MALAYSIAN FAMILY LIFE SURVEYS

Abstract. The main purpose of this paper is to investigate the private returns to education and training in the 1980s for a random sample of women in Malaysia. I estimate a Mincer type earnings function, augmented by information on the women's training experience. The results indicate that there are positive and economically significant returns to education and training. I also investigate the determinants of training and find that training participation is positively related to educational attainment, while if women are credit-constrained they are significantly less likely to undertake training.     

HOUSEHOLD INCOME PLUS HOUSEHOLD PRODUCTION: THE DISTRIBUTION OF EXTENDED INCOME IN THE U.K.

This paper provides new estimates of the distribution of extended income amongst non-elderly, one-family households in the U.K. by combining household money income data and valuations of household production time. Extended income is substantially more equal than money income and extending the income definition changes income relativities significantly between families with and without earners and between married couple families and singles.     

THE DISTRIBUTION OF HOUSEHOLD INCOME AND EXPENDITURE IN PORTUGAL: 1980 AND 1990

From 1980 to 1990 Portugal experienced a generalized liberalization of economic activity, due in large part to its 1986 integration in the European Union. This paper studies the changes in the Portuguese distribution of household income and expenditure during this period, using micro-data on household budgets and applying recent developments in statistical inference for Lorenz curves. We find a significant increase in six measures of welfare and an unambiguous decrease in the inequality of the respective distributions. Different explanations for the findings of decreased inequality are discussed.     

USING PSEUDO‐PANELS TO MEASURE INCOME MOBILITY IN LATIN AMERICA

This paper presents a comparative overview of mobility patterns in 14 Latin American countries between 1992 and 2003. Using three alternative econometric techniques on constructed pseudo‐panels, the paper provides a set of estimators for the traditional notion of income mobility as well as for mobility around extreme and moderate poverty lines. The estimates suggest very high levels of time‐dependent unconditional immobility for the Region. However, the introduction of socioeconomic and personal factors reduces the estimate of income immobility by around 30 percent. There are also large variations in country‐specific income mobility (estimated to explain some additional 10 percent of inter‐temporal income variation). Analyzing the determinants of changes in poverty incidence within cohorts revealed statistically significant roles for age, gender, and education of the household head, the latter subject to distinctive effects across levels of attainment and transition in and out of poverty.