Julie Litchfield

The Rise and Fall of Brazilian Inequality: 1981-2004

Measured by the Gini coefficient, income inequality in Brazil rose from 0.57 in 1981 to 0.63 in 1989, before falling back to 0.56 in 2004. This latest figure would lower Brazils world inequality rank from 2nd (in 1989) to 10th (in 2004). Poverty incidence also followed an inverted U-curve over the past quarter century, rising from 0.30 in 1981 to 0.33 in 1993, before falling to 0.22 in 2004. Using standard decomposition techniques, this paper presents a preliminary investigation of the determinants of Brazils distributional reversal over this period. The rise in inequality in the 1980s appears to have been driven by increases in the educational attainment of the population in a context of convex returns, and by high and accelerating inflation. While the secular decline in inequality, which began in 1993, is associated with declining inflation, it also appears to have been driven by four structural and policy changes which have so far not attracted sufficient attention in the literature, namely sharp declines in the returns to education; pronounced rural-urban convergence; increases in social assistance transfers targeted to the poor; and a possible decline in racial inequality. Although poverty dynamics since the Real Plan of 1994 have been driven primarily by economic growth, the decline in inequality has also made a substantial contribution to poverty reduction.

Welfare in Vietnam during the 1990s: Poverty, inequality and poverty dynamics

Vietnam’s economy was transformed during the 1990s through a series of economic, social and political reforms, resulting in an average growth rate over the decade in excess of 6 per cent per annum, accompanied by a dramatic fall in the incidence of consumption per capita poverty. This paper examines changes in poverty and poverty dynamics over the 1990s using a nationally representative panel of households surveyed in 1992–93 and 1997–98. We analyse how robust the reduction in poverty is to the methods used to measure poverty. We find that regardless of where the poverty line is drawn, consumption per capita poverty fell between the surveys. We also examine changes in the distribution of living standards over time, finding that the fall in poverty was accompanied by a rise in inequality, with some sub-groups of the population failing to share equally in the growth of the country. Finally, we examine rural poverty dynamics, presenting transition matrices of movements in and out of poverty over time and estimating a model of consumption growth. We find that regional differences are important, as are access to key institutions and infrastructure, and education. We also find that shifts in employment and production patterns, especially of rice, which we argue to be induced by the economic reform process, are strongly related to changes in living standards.

Poverty and Income Distribution in Chile: 1987-1998 New Evidence.

This paper presents an update on the poverty and income distribution situation in Chile during the 90s. The analysis shows unambiguously that there was less poverty between 1994 and 1998 than in all earlier years, whether poverty is measured by the headco

Poverty Dynamics During Trade Reform: Evidence From Rural Vietnam

This paper implements and adapts the conceptual framework developed by Winters (2002) that identifies the transmission mechanisms between trade policy reform and household welfare outcomes. We make use of household panel data from Vietnam collected in two years, 1992-93 and 1997-98 that span the very earliest years of the reform period and its immediate after effects. Poverty dynamics are modeled using changes in consumption expenditure and poverty transition models. The trade effect is captured by a set of variables that are most likely to have an impact on rural poverty, namely prices of staples and employment in the export sector. We show that trade liberalization has a material and positive effect on rural household welfare and this trade effect is largely transmitted to the poor through the labor market channel. Copyright 2008 The Authors. Journal compilation International Association for Research in Income and Wealth 2008.

Education or Inflation?: The Micro and Macroeconomics of the Brazilian Income Distribution During 1981-1995

This paper investigates the increases in inequality observed in Brazil during the 1980s, as well as the declines in the first half of the 1990s. It also documents the more cyclical trends in poverty during the same period. Using static decompositions of inequality by household characteristics, it quantifies the importance of education, race, geographic location and demographic structure of the household as determinants of inequality levels. Decomposing inequality by factor components reveals that almost half of overall inequality is due to the distribution of self-employment incomes. The causes of changes in inequality differ across the two decades. The rise in inequality in the 1980s appears to have been driven by increases in the educational attainment of the population, in a context of highly convex returns, and by high and accelerating inflation. In the 1990s, the fall in inequality was associated with increasing equality between urban and rural areas, declining returns to education, and falling inflation. Poverty dynamics were closely associated with real wage levels.

The Impact of Migrant Remittances on School Attendance and Education Attainment: Evidence from Jordan

This paper evaluates the impact of migrant remittances on human capital accumulation among youth. An augmented human capital model with two outcomes, education attendance and education attainment, is estimated using a large nationally representative household survey from Jordan. Empirical results show that migrant remittance receipt has a positive effect on education attendance. This finding is obtained while controlling for other socio-economic determinants of schooling behavior and is robust to censorship and endogeneity bias. The results also indicate that the magnitude of the remittance impact on both education outcomes is larger for men compared with that of women.

Who Is Most Likely to Migrate from Albania?: Evidence from the Albania Living Standards Measurement Survey

This paper uses the Albania Living Standards Measurement Survey from 2002 to examine the factors that render an individual most prone to international migration. The analysis uses novel data on whether individuals ever considered migrating abroad. The econometric models describe the data well and appear well specified on the basis of diagnostic tests. The estimated results are generally consistent with findings from the empirical literature on the willingness to migrate. It is salutary that the usual characteristics emerge as determining factors, with age, gender, employment status, and education all exerting predictable influences on migration risk. There is also a strong role detected for local labor market conditions and community-level variables that capture, among other things, the prevalence of crime.

Migration and poverty in Albania: what factors are associated with an individual's predisposition to migrate?

The last decade of the 20th century witnessed one of the largest economic experiments of that century as former communist countries embarked on attempts to transform their economies from centrally planned to market-based systems. The transformation process influenced the direction of economic policies and shaped the nature of social policies, business practices and institutions. The collapse of the central planning system in Eastern Europe and the former Soviet Union also provided the erstwhile citizens of many communist regimes with opportunities to migrate abroad. The mass exodus anticipated in some of the early writings on the transition process did not materialize and over the decade migration flows to the West were generally modest in comparison to original expectations. However, Albania proved something of an exception to this general rule and the country experienced a steady increase in its number of emigrants living abroad over the first decade of its transition. By the end of the decade over one-fifth of the Albanian population were estimated to be abroad, representing the largest outflow relative to population of any transitional economy. In more recent years some progress has been made in Albania as the government, under the framework of the Growth and Poverty Reduction Strategy (GPRS), embarked on reforms designed to stimulate economic growth and improve living standards. In the early years of the current decade, Albania has registered steady economic growth, reductions in the unemployment rate and a more stable inflationary environment. Structural programmes have been introduced to tackle financial regulation, land reform and privatization. In addition, there has been a strengthening of governance systems and an anti-corruption plan is in the process of implementation. In spite of some positive economic developments, poverty remains high in Albania and per capita income is one of the lowest of all the transitional countries. The World Bank’s recent poverty assessment estimated that

Inequality and Poverty in the Lost Decade: Brazilian Income Distribution in the 1980s

None of the characteristics of the New Economic Model (NEM) outlined in Chapter 1 were present in Brazil during the 1980s. The constitutional reforms proposed in 1995 by President Cardoso represent an important step in the introduction of such a model, and some features — such as openness of the current account — were introduced earlier. Yet even these came only after 1990. Because the latest household survey data for Brazil available to us are from 1990,1 it is impossible at this time to analyse the impact of any constituent element of the NEM on income distribution in the country.

Poverty, Livelihoods and War Legacies: The Case of Post-War Rural Kosovo

This paper examines the effects of war on livelihood portfolios and welfare outcomes of rural households in Kosovo using the 2000 Kosovo Living Standards Measurement Survey. We question to what extent the legacy of war was experienced through selection into low return livelihood activities or through decreases in welfare generally. We first identify portfolios using a clustering algorithm which groups households pursuing similar combinations of activities. The emerging clusters are comparable to those described in more qualitative studies for Kosovo in the immediate post-conflict period. We then examine the determinants of livelihood portfolio choice and the consequences of these for welfare outcomes, controlling for war legacies and selection into specific portfolios. We find evidence of a relationship between a household’s war experience and their livelihood choices and that war exposure has different impacts on household welfare depending on the livelihood portfolio adopted. We also identify significant selection effects on welfare for three out of four of our livelihood clusters, highlighting the fact that selecting into a specific portfolio raised or lowered welfare above expected levels.