PHM-Exch> What Explains the Decline in Brazil's Inequality?

[Claudio Schuftan]

From: Ruggiero, Mrs. Ana Lucia (WDC) <ruglucia at paho.org>
crosposted from: EQUIDAD at listserv.paho.org


 *What Explains the Decline **in Brazil’s Inequality?

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Degol Hailu, International Policy Centre for Inclusive Growth (IPC-IG) and

Sergei Suarez Dillon Soares, Institute for Applied Economic Research (IPEA)

*International Policy Centre for Inclusive Growth (IPC - IG) Poverty
Practice, Bureau for Development Policy, UNDP
OnePager No. 89 July 2009

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Available online at: http://www.ipc-undp.org/pub/IPCOnePager89.pdf

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*“……..The economics profession has long debated *whether there is a
trade-off between growth and equity. Countries that pursued
inequality-reducing strategies have been warned that growth will be
affected, and hence that poverty increases.

The harbingers of doom advocated a growth-focused strategy. Their assumption
was that the income of the poor rises in direct proportion to economic
growth. The truth is more like this: economies with more equal income
distribution are likely to achieve higher rates of poverty reduction than
very unequal countries.



In this One Pager we consider if this is the case in Brazil. Inequality in
Brazil, as measured by the Gini coefficient, fell from 0.59 in 2001 to 0.53
in 2007. Much remains unknown about why inequality has fallen, but two sets
of known causes stand out.


The first consists of improvements in education. In the early and mid 1990s,
for example, the workforce gained more equal access to education. This is
because of universal admission to primary schooling and lower repetition
rates. In conjunction with other demographic trends, such as a decline in
family size and improvements in family dependency ratios, access to
education helped reduce inequality ….….”

* wonder whethr health is also mentioned...Claudio.*

*Reference:*

Veras, F., S. Soares, M. Medeiros and R. Osorio (2006).

Cash Transfer Programmes in Brazil: Impacts on Inequality and Poverty.
Working Paper # 21. IPC-IG http://www.ipc-undp.org/pub/IPCWorkingPaper21.pdf

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