Alternatives for Projecting MDG Indicators

Although the Millennium Development Goals are global, in the sense that they are to be reached by the whole world, not necessarily by countries individually, in many countries the true commitment to them has led many to ask the question: will my country reach all or some of the MDGs by 2015? Are we on or off track? If off track, how far are we? To answer this question it is mandatory to perform some kind of projecting exercise. We talk of projections, not of forecasts, for there are many variables that can intervene to determine the performance of a country in its pursuit of the goals. Furthermore we have to deal with the fact that we cannot really predict what is going to happen up to 2015, but just make assumptions. However, projections can indeed be so accurate as to resemble forecasts. This is the case when there is plenty of data available, as well as technical expertise in projecting, and time. Unfortunately, this is seldom the case, particularly in developing countries. The common situation faced by those who ask the question on whether the MDGs will be reached by a certain country by 2015 is that of scarcity of data and/or of technical skills. (...)Alternatives for Projecting MDG Indicators

The Recent Impact of Government Transfers on Poverty in Honduras and Alternatives to Enhance their Effects

This paper characterises income poverty in Honduras during the first half of 2007, and assesses the impact that some government transfers have had on it. The characterisation of income poverty shows that it is possible to eradicate poverty in Honduras solely through redistribution, despite its being a low-income country. The analysis of the incidence and impact of government transfers reveals that they do reach the poor, but that they are not very effective in reducing the poverty headcount ratio or in alleviating poverty by reducing its intensity and severity. Nonetheless, the counterfactual simulations presented here show that improvements in targeting and increases in the amount transferred could significantly enhance the impact of government transfers on poverty in Honduras. (...)The Recent Impact of Government Transfers on Poverty in Honduras and Alternatives to Enhance their Effects

Is all Socioeconomic Inequality among Racial Groups in Brazil Caused by Racial Discrimination?

This Working Paper addresses the issue of whether current racial discrimination is the decisive determinant of the wide and persistent inequalities in socioeconomic conditions between Whites and Blacks in Brazil. The paper highlights three main conclusions. The first is that factors, such as region of residence, parental education and household income, together, are responsible for the major proportion of the racial gaps that are observed today, but that racial discrimination remains a major source of inequalities among racial groups. The second conclusion is that whenever educational outcomes, such as literacy, can be easily attained, the ceteris paribus effect of race on the probability of attainment is small and diminishes as household income increases; but when outcomes are more difficult to attain, such as for secondary or higher education, the racial gap is large and increases with income. In other words, the effects of racial discrimination tend to be amplified when Black Brazilians are competing with White Brazilians for highly valued but low-supply social resources, such as higher levels of education. The third conclusion is that although younger age cohorts of Black Brazilians are advancing relative to their parents and to the Brazilian population as a whole, they are not advancing relative to their own age cohort. Thus, although younger age cohorts might be advancing relative to older age cohorts, young Black Brazilians remain in the same relative position vis-à-vis young White Brazilians as older generations of Blacks did vis-à-vis Whites. Thus, in a relative sense, there has been virtually no social mobility for Black Brazilians in the last three decades.Racial Discrimination, Educational Attainment, Intergenerational Mobility.

"Gender Inequalities in Allocating Time to Paid and Unpaid Work: Evidence from Bolivia"

This working paper analyzes paid and unpaid work-time inequalities among Bolivian urban adults using time use data from a 2001 household survey. We identified a gender-based division of labor characterized not so much by who does what type of work but by how much work of each type they do. There is a trade-off between paid and unpaid work, but this trade-off is only partial: women's entry into the labor market tends to result in a double shift of paid and unpaid work. We also find very high levels of within-group inequality in the distributions of paid and unpaid work-time for men and women, a sign that, beyond the sexual division of labor, subgroup differentiation is also important. Using decompositions of the inequality in the distribution of total time spent at work, we show that gender plays an important role in determining the proportion of paid to unpaid work done by individuals, but it plays a lesser role in determining the higher total workload of some individuals relative to others.

Gender Inequalities in Allocating Time to Paid and Unpaid Work: Evidence from Bolivia

This Working Paper analyzes paid and unpaid work-time inequalities among Bolivian urban adults using time use data from a 2001 household survey. We identified a gender-based division of labor characterized not so much by who does which type of work but by how much work of each type they do. There is a partial trade-off between paid and unpaid work, but such a substitution is only partial: women?s entry into the labor market tends to result in a double work shift of paid and unpaid work. We also find very high levels of within-group inequality in the distributions of paid and unpaid work-time for men and women, a sign that beyond the sexual division of labor, subgroup differentiation is also important. Using decompositions of the inequality in the distribution of total time spent at work, we show that gender is an important variable to explain how much paid and unpaid work is done by individuals, but not so important to explain why some people have a higher total workload than others.Gender, Inequalities, poor, Bolivia

The Impact of Relative Prices on Welfare and Inequality in Brazil, 1995-2005

Our objective in this working paper is to analyze the impact of relative prices on the evolution of welfare and inequality in Brazil from 1995 to 2005. This period was characterized by monetary stability but also by large changes in relative prices. This implies that a homogeneous inflation index will yield questionable results. In order to take relative prices into account in our welfare analysis, we build specific inflation indices for each hundredth of the population ranked by per capita household income. To accomplish this task, we use data from the latest round of the Brazilian income and expenditure survey and price indices obtained from the national consumer price system. We use our distribution-specific inflation indices to deflate the nominal income distributions yielded by the Brazilian annual household survey from 1995 to 2005. Thus, we generate new income distributions that better represent the real purchasing power of the households. Based on these new income distributions, we calculate average incomes and Gini coefficients, investigate the relationships of stochastic dominance as well as Lorenz dominance, and calculate Atkinson?s social welfare function for inequality aversion parameters varying from 0.1 to 0.9. Our results can be summarized into three stylized facts: i) inflation during the 1995-2005 period was distributionally progressive up to the 93rd hundredth of the per capita household income distribution; ii) taking relative prices into account, the Gini coefficient falls 0.61 points (or 19 per cent) more than when a general price index is used; iii) surprisingly, average income deflated by the distribution-specific indices differs significantly from average income deflated by the general price index, i.e., it falls instead of rising slightly from 1995 to 2005.Relative Prices, Welfare, Inequality, Brazil

Evaluating the Impact of Brazil?s Bolsa Família: Cash Transfer Programmes in Comparative Perspective

Bolsa Família, CCT, Cash Transfer

The Post-Apartheid Evolution of Earnings Inequality in South Africa, 1995-2004

This paper examines the trend in post-Apartheid earnings inequality in South Africa. By combining data sets, the paper is able to analyze the trend for the whole period 1995-2004. Earnings inequality rose sharply during 1995-1999 and then declined marginally, but remained high, during 2000-2004. A dramatic rise in unemployment was the driving force in exacerbating earnings inequality in the 1990s. Unemployment began to level off in the 2000s but remained at a high rate. An unprecedented influx of new entrants into the formal labour market in the 1990s put downward pressure on average real wages, affecting workers both in the middle of the distribution and toward the bottom. The growth of the South African economy has been neither rapid enough nor employment-intensive enough to absorb such a large influx of workers. Moreover, the economy?s greater openness to trade and financial flows appears to have left many workers behind, especially Africans, workers in low-skilled occupations, residents of rural areas in general and poor regions in particular. Earnings inequality remains high across groupings of workers differentiated by race, education and occupation although occupation has become a more important factor than the other two in the 2000s. Differentials across the mean earnings of workers classified by rural and urban residence and by province have also intensified. In the 1990s, inequalities within groupings of worker rose sharply and then moderated by the 2000s. While earnings differentials by race and the rural-urban divide also exacerbated inequality in the 1990s, they have been in modest decline since then. These changes in the dynamics of earnings inequality between the 1990s and 2000s pose new challenges for South African policymakers in their efforts to substantially reduce the Apartheid legacy of high inequality and poverty.South Africa, Income distribution, Earnings distribution, Inequality

Growth, Poverty and Employment in Brazil, Chile and Mexico

Insufficient labour income and limited access to employment are critical problems that policy makers must address when designing development strategies in Latin American countries. The persistence of the high incidence of poverty and inequality can be explained largely by the poor performance of labour markets. This Working Paper uses household survey data for Chile, Brazil and Mexico, from the early 1990s to the early 2000s, to examine the link between the growth of labour income, employment creation and the distributional impact of these factors. Through a simple decomposition of the sources of household labour income into earnings per worker and employment per population, the paper evaluates the role of economic, social and demographic factors in contributing to income changes. This decomposition shows that earnings per worker were the single most important determinant of the change in household labour income per capita. The change in earnings had the largest impact on household labour income in five of the eight country periods considered. Changes in the employment to population rate did play a role in determining labour income, but was much less important. Further decompositions show that despite favourable declines in dependency rates, the unfavourable trends of an almost ubiquitous rise of unemployment rates and, at times, the decline of participation rates dampened the contribution of employment to household labour income. The paper also decomposes labour income per capita into 20 equally sized partitions in order to evaluate its distributional pattern. A simple evaluation rule is used to validate whether changes can be considered pro-poor. Of the eight country periods analysed, only three exhibited income changes favouring the poor: Brazil in 1996-2004, Mexico in 1994-1996 and Mexico in 2000-2004. But in two of these, the pro-poor change occurred during economic contractions. In the remaining five country cases, the increase of labour income was associated with a distributional pattern that did not favour the poor. Thus, there was only one period in which labour income not only increased but was also pro-poor. But even in this case, the distribution did not favour the extremely poor. The alternating pattern of change in favour of and against the poor is explained mostly by the change in their earnings. The pattern of change in employment rarely favoured them. But when it did, usually during economic downturns, the rising participation rate of poor workers was the main reason.Earnings, Employment, Labour Markets, Pro-Poor Growth