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Beyond Oaxaca-Blinder
Abstract: Bourguignon, Ferreira, and Leite develop a microeconometric method to account for differences across distributions of household income. Going beyond the determination of earnings in labor markets, they also estimate statistical models for occupational choice and for conditional distributions of education, fertility, and nonlabor incomes. The authors import combinations of estimated parameters from these models to simulate counterfactual income distributions. This allows them to decompose differences between functionals of two income distributions (such as inequality or poverty measures) into shares because of differences in the structure of labor market returns (price effects), dif...
World Development Report 2023
Migration is a development challenge. About 184 million people—2.3 percent of the world’s population—live outside of their country of nationality. Almost half of them are in low- and middle-income countries. But what lies ahead? As the world struggles to cope with global economic imbalances, diverging demographic trends, and climate change, migration will become a necessity in the decades to come for countries at all levels of income. If managed well, migration can be a force for prosperity and can help achieve the United Nations’ Sustainable Development Goals. World Development Report 2023 proposes an innovative approach to maximize the development impacts of cross-border movements ...
Brazil within Brazil
Abstract: The small-area estimation technique developed for producing poverty maps has been applied in a large number of developing countries. Opportunities to formally test the validity of this approach remain rare due to lack of appropriately detailed data. This paper compares a set of predicted welfare estimates based on this methodology against their true values, in a setting where these true values are known. A recent study draws on Monte Carlo evidence to warn that the small-area estimation methodology could significantly over-state the precision of local-level estimates of poverty, if underlying assumptions of spatial homogeneity do not hold. Despite these concerns, the findings in th...
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 Brazil's 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 Brazil's 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...
Emerging Markets in a World of Chaos
This book is a journey through leading and incredibly diverse emerging markets in a world of shocks and transitions. Tracing the rise of China, the emergence of India, the changing fortunes in Brazil, Argentina, and Mexico, the unique developments in Turkey and Indonesia, the complex geopolitics in Russia and Saudi Arabia, and the challenging post-apartheid transition in South Africa, the study examines their varying prospects in the years to come. Using an innovative analytical approach and rich empirics, the book delves into topics ranging from macroeconomics to human development, institutions to climate change. It provides a strategic roadmap of reform for these economies to escape the middle-income trap. It argues that in a world where advanced economies are defined by slowdown, growing trade blocs, changing demographics, and the rise of renewable technologies, emerging markets will continue to play a significant but complex role in the twenty-first century.
The Slippery Slope
During the turbulent years 1976-96, aggregate data for Brazil appear to show only small changes in mean income, inequality, and incidence of poverty -- suggesting little change in the distribution of income. But a small group of urban households -- excluded from formal labor markets and safety nets -- was trapped in indigence. Based on welfare measured in terms of income alone, the poorest part of urban Brazil has experienced two lost decades.
Inequality and Economic Development in Brazil
What makes Brazil so unequal? This title looks at this question and shows how inequalities weaken Brazil's economic development and what are the best policy options to reduce this inequity.
Inequality in Latin America
Latin America and the Caribbean has been one of the regions of the world with the greatest inequality. This book explores why the region suffers from such persistent inequality, identifies how it hampers development, and suggests ways to achieve greater equity in the distribution of wealth, incomes and opportunities. The study draws on data from 20 countries based on household surveys covering 3.6 million people, and reviews extensive economic, sociological and political science studies on inequality in Latin America. Four broad areas for action by governments and civil society groups to break the destructive pattern are outlined: (1) build more open political and social institutions, that a...
Policy Options for Meeting the Millenium Development Goals in Brazil
Ferreira and Leite investigate whether micro-simulation techniques can shed light on the types of policies that should be adopted by countries wishing to meet their Millennium Development Goals. They compare two families of micro-simulations. The first family of micro-simulations decomposes required poverty changes into a change in the mean and a reduction in inequality. Although it highlights the importance of inequality reduction, it appears to be too general to be of much use for policymaking. The second family of micro-simulations is based on a richer model of behavior in the labor markets. It points to the importance of combining different policy options, such as educational expansion and targeted conditional redistribution schemes, to ensure that the poorest people in society are successfully reached. But the absence of market equilibria in these statistical models, as well as the strong stability assumptions which are implicit in their use, argue for extreme caution in their interpretation. This paper--a product of the Poverty Team, Development Research Group--is part of a larger effort in the group to understand pro-poor policies.
Realizing the Full Potential of Social Safety Nets in Africa
Poverty remains a pervasive and complex phenomenon in Sub-Saharan Africa. Part of the agenda in recent years to tackle poverty in Africa has been the launching of social safety nets programs. All countries have now deployed safety net interventions as part of their core development programs. The number of programs has skyrocketed since the mid-2000s though many programs remain limited in size. This shift in social policy reflects the progressive evolution in the understanding of the role that social safety nets can play in the fight against poverty and vulnerability, and more generally in the human capital and growth agenda. Evidence on their impacts on equity, resilience, and opportunity is...
