Conditional cash transfers in Brazil, Chile and Mexico: Impacts upon inequality

  • Sergei Soares Instituto de Pesquisa Econômica Aplicada
  • Rafael Guerreiro Osório International Poverty Centre, UNDP
  • Fábio Veras Soares Instituto de Pesquisa Econômica Aplicada
  • Marcelo Medeiros Instituto de Pesquisa Econômica Aplicada
  • Eduardo Zepeda Carnegie Endowment for International Peace
Keywords: Conditional Cash Transfers, CCT, Inequality, Gini decomposition
JEL Classification: D31

Abstract

We decompose changes in the Gini coefficient to investigate whether the Conditional Cash Tranfers (CCT) have had an inequality reducing effect in three Latin American countries: Brasil, Mexico and Chile. We conclude that CCT programs helped reducing inequality between the mid-1990s and the mid-2000s. The share of total income represented by the CCTs is very small, less than 1%. But as their targeting is outstanding, the equalising impact of CCTs was responsible for about 21% of the fall in Brazilian and Mexican inequality figures In Chile the effect was responsible for around 15% of the reduction.

References

Acemoglu, D., S. Johnson, and J. A. Robinson (2001). Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution, NBER Working Paper, no. 8460, available at: http://www.nber.org/papers/w8460.

Aghion, P., E. Caroli and C. García-Peñaloza (1999). Inequality and Economic Growth: The Perspective of New Growth Theories, Journal of Economic Literature, 37(4), 1615-1660.

Atkinson, A. B. (1997). Bringing Income Distribution in From the Cold, The Economic Journal, 107 (441), 297-321.

Azevedo, J. P. (2007). Avaliando a Significância Estatística da Queda na Desigualdade no Brasil in R. Paes de Barros, M. N. Foguel, and G. Ulyssea (Eds.), Desigualdade de Renda no Brasil: Uma Análise da Queda Recente, vol. 1, IPEA, Rio de Janeiro, avaliable at: http://www.ipea.gov.br.

Fragoso, J. and M. Florentino (2001). O Arcaísmo como Projeto, Cia das Letras, Rio de Janeiro.

Furtado, C. (1966). Subdesenvolvimento e Estagnação na América Latina, Civilização Brasileira, Rio de Janeiro.

Handa, S. and Davis, B. (2006). The Experience of Conditional Cash Transfers in Latin America and the Caribbean, Development Policy Review, 24(5), 513-536.

Hoddinott, J. and E. Skoufias (2004). The Impact of PROGRESA on Food Consumption, Economic Development and Cultural Change, 53(1), 37-61.

IBGE. Pesquisa Nacional por Amostra de Domicílios, (PNAD), 1995, 2004, available at: http://www.ibge.gov.br/home/estatistica/populacao/trabalhoerendimento/pnad2007/default.shtm.

INEGI. Encuesta nacional de ingresos y gastos de los hogares, (ENIGH), 1996, 2004, available at: http://www.inegi.gob.mx/prodserv/contenidos/espanol/biblioteca/Default.asp?accion=1&upc=702825000083&s=est&c=10753. Documento metodológico.

Kakwani, N. (1980). Income Inequality and Poverty: Methods of Estimation and Policy Aplications, World Bank Research Publications.

Lerman, Robert I. and S. Yitzhaki (1985). Income Inequality Effects by Income Source: A New Approach and Applications to the United States, Review of Economics and Statistics, 67(1), 151-156.

Mideplan. Encuesta Casen, 1996, 2003, avaliable at: http://www.mideplan.cl/casen/.

Paul, Satya (2004). Income Sources Effects on Inequality, Journal of Development Economics, 73(1), 435-451.

Skoufias E. and S. W. Parker (2001). Conditional Cash Transfers and their Impact on Child Work and School Enrollment: Evidence from the PROGRESA Program in Mexico, Economía 2(1), 45-96.

Shorrocks, A. (1982). Inequality Decomposition by Factor Components, Econometrica, 50(11), 193-211.

Soares, F. V. et al. (2006). Cash Transfer Programs in Brazil: Impacts on Inequality and Poverty, IPC Working Paper, no. 21, available at: http://www.undp-povertycentre.org/newsletters/WorkingPaper21.pdf.

Szekely, M. and M. Hilgert (2001). What Drives Differences in Inequality Across Countries?, IADP Research Department Working Paper, no. 439, available at SSRN: http://ssrn.com/abstract=258947

Published
01-01-2009
How to Cite
SoaresS., Guerreiro OsórioR., Veras SoaresF., MedeirosM., & ZepedaE. (2009). Conditional cash transfers in Brazil, Chile and Mexico: Impacts upon inequality. Estudios Económicos, 207-224. https://doi.org/10.24201/ee.v0i0.387
Section
Articles
  • Abstract viewed - 877 times
  • PDF downloaded: 311 times