Transcript Diapositiva 1

Red Interamericana de Protección
Social (RIPSO)
Mexico, DF, August 10, 2011
1
60.0
55.0
53.2
Gini coefficient
50.0
44.7
45.0
40.0
35.0
32.2
38.9
38.9
39.1
South Asia
North Africa
and the
Middle East
East Asia and
the Pacific
33.6
30.0
25.0
20.0
High Incom e
Europe and
Central Asia
Sub-Saharan Latin Am erica
Africa
and the
Caribbean
2
Excess Inequality (IDB, 2011)
3
Excess Poverty (IDB, 2011)
4
Trends in Poverty: 1995-2009 (IDB, 2011)
5
 How Much?
 Since When?
 Why?
 Will it continue?
6
7
Trends in Inequality
Gini Coefficient Early 1990’s-Late 2000’s
Light Grey: Countries with Falling Ineq (Lustig et al., 2011)
0.550
0.540
0.540
0.537
0.530
0.530
0.524
0.523
0.520
0.520
0.510
0.518
0.509
0.503
0.502
0.500
0.490
0.480
Early 90s
(12 countries)
Mid-90s
(15 countries)
Late 90s
countries)
(16
Mid-2000s
(17 countries)
Late 2000s
countries)
(17
8
0.525
0.519
0.520
0.520
0.515
0.510
0.510
0.508
0.505
0.500
0.495
0.492
0.490
0.485
0.480
0.475
Early 90s
Mid-90s
Late 90s
Mid-2000s
Late 2000s
9

Inequality has declined in 13 out of 17 countries (roughly 1% a
year) between (circa) 2000 and (circa) 2008;

Decline is statistically significant in all but one case

Decline occurred while inequality in other parts of the world
has been on the rise

Decline continued through the global financial crisis in 2009

Order of magnitude: higher (and in some cases much more
so) than increase in previous period, for example

Growth has been notoriously “pro-poor”
10
Change in Gini Coefficient by Country: circa
2000-2008 (yearly change in percent)
SEDLAC
11
Change in Gini Coefficient by Country: circa
2000-2009 (yearly change in percent)
SEDLAC
12
Change of Gini in percentage points
Average of increase
Average of decrease
10.0
8.2
8.0
6.0
5.0
4.1
4.0
2.7
2.6
2.5
2.1
1.5
2.0
0.8
0.1
2.7
0.1
0.0
-2.0
-4.0
-4.2
-4.4
-6.0
-8.0
-5.4
-6.0
-6.2
-2.9
-5.0
-3.1
-3.5
-4.1
-7.4
Argentina
Peru
Paraguay El Salvador
Brazil
Panama
Mexico
Venezuela
Chile
Dominican
Rep.
2002-2007
1997-2002
2003-2009
2000-2003
1998-2009
1992-1998
2002-2006
1989-2002
1996-2008
1989-1996
2001-2009
1989-2001
1998-2009
1985-1998
2001-2008
1995-2001
2003-2009
1997-2003
2003-2009
1997-2003
1992-2002
-10.0
2002-2009
-8.4
Bolivia
13
Income of the Brazilian poor has been growing as fast as per
capita GDP in China while income of the richest ten percent has
been growing like Germany’s per capita GDP
Distribution of countries according to the average per capita GDP
growth rate between 1990 and 2005
15
Average annual growth rate (%)
13
11
China
9
Brazilian bottom 10%
7
5
3
Germany
1
Brazilian top 10%
-1
-3
Haiti
-5
0
5
10
15
20
25
30
35
40
45
50
55
60
Distribution of countries (%)
65
70
75
80
85
90
95
100

Definition of income (monetary or total)/per
capita or AEU/consumption

End years

Inequality indicator

Data source (UNECLAC or SEDLAC, the latter is
used here)
15
OECD-30
0.46
South Africa
1.50
India
China
-0.95 -0.94 -0.91
Total 17
-0.72
Total 13
Nicaragua
1.00
Honduras
0.50
Uruguay
Guatemala
-0.35 -0.33
Venezuela
-0.52
Costa Rica
-0.50
Dominican Republic
Bolivia
Mexico
Brazil
-1.05 -1.05 -1.02 -1.01
Panama
-1.00
Peru
Ecuador
Chile
Argentina
Paraguay
El Salvador
Annual Percent Change
2.50
2.00
2.02
1.43
1.02
0.68
0.05
0.30 0.25
0.00
-0.24
-0.49
-0.81
-1.50
-1.48
-2.00
90.0
80.0
Ratio Centiles 95/5 in 2009
70.0
60.0
50.0
Bol
Hon
40.0
30.0
Gua
Per Mex
20.0
Bra
Arg
Chi
DR
Uru
10.0
0.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Ratio Centiles 95/5 in 2000
70.0
80.0
90.0
17
Total 17
-1.12 -1.11
-1.33 -1.27 -1.23
Total 14
2.00
Guatemala
1.00
Dominican Rep.
Costa Rica
-0.51 -0.45
Honduras
Mexico
-0.79 -0.69
Ecuador
Uruguay
-1.00
Chile
Panama
El Salvador
Brazil
Paraguay
Peru
Bolivia
Argentina
-2.00
Nicaragua
-3.00
Venezuela
Annual Percent Change
3.00
1.98
0.98
0.38
0.00
-0.27
-0.82
-1.23
-2.03 -1.94
-1.60
-2.93
-4.00
18
 In
three countries, during second half
of 1990s: Mexico, Brazil and Chile
 In six, started in 2002-2003: Argentina,
Bolivia, El Salvador,
Panama and Peru
Paraguay,
19
2004
Dominican Republic,
Ecuador, Paraguay, Peru
2003
Year when inequality started to decline
2002
Argentina, Bolivia,
Venezuela
2001
El Salvador, Panama
2000
1999
1998
Brazil, Chile
1997
1996
Mexico
1995
1994
20
Persistently high inequality countries (Brazil)
and normally low inequality countries
(Argentina and Venezuela)
 Fast growing countries (Chile and Peru), slow
growing countries (Brazil and Mexico) and
countries recovering from crisis (Argentina and
Venezuela)
 Countries with left “populist” governments
(Argentina), left social-democratic governments
(e.g., Brazil, Chile) and center/center-right
governments (e.g., Mexico and Peru)

21
Gini (Circa 2000)
Uruguay
44.0
Venezuela
44.1
Costa Rica
49.9
Nicaragua
50.2
Argentina
50.4
El Salvador
51.9
Dominican Rep.
51.9
Mexico
53.8
Peru
54.0
Guatemala
54.2
Ecuador
54.5
Chile
55.2
Honduras
55.5
Panama
56.5
Paraguay
56.6
Bolivia
58.5
Brazil
58.8
Total
40.0
52.9
42.0
44.0
46.0
48.0
50.0
52.0
Gini Coefficient in Percent
54.0
56.0
58.0
60.0
22
23
24
25
Non-left
Honduras
-0.5
Peru
-0.78
Mexico
-1.0
Panama
-1.23
El Salvador
Left-wing
Uruguay
Chile
-1.07
Venezuela
Brasil
Argentina
1.0
0.79
0.5
0.12
0.0
-0.39
-0.53
-0.66
-0.77
-1.07
-0.97
-1.5
-1.29
26
In-depth analysis (Lopez-Calva and Lustig, 2010 and UNDP
project paper for Chile and Uruguay):
 Argentina (Gasparini and Cruces) (urban; 2/3 of pop)
 Brazil (Barros, Carvalho, Mendoca & Franco)
 Chile (Eberhard and Engel) (labor earnings)
 Mexico (Esquivel, Lustig and Scott)
 Peru (Jaramillo & Saavedra)
 Uruguay (Alves, Amarante, Salas and Vigorito); rising
inequality most of the period; declines in 07-09
27


Educational upgrading and a more equal
distribution of educational attainment have
been equalizing (quantity effect). No
“paradox of progress” this time.
Changes in the steepness of the returns to
education curve have been equalizing at the
individual workers level (price effect). Except
for Peru, they have been equalizing at the
household level too.
28
Schooling Inequality: Argentina (urban), Brazil, Mexico and Peru
Gini Coefficients for Education for Argentina, Brazil, Mexico and Peru
Coefficients)
(Gini
March 2011
SEDLAC:
29
0.35
0.30
0.25
0.20
0.15
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2009
30
31
Primary
Secondary
Tertiary
1.2
1.0
Returns
0.8
0.6
0.4
0.2
0.0
1990
1998
2000
2006
2009
32

Changes in government transfers were
equalizing:
 more progressive government transfers (monetary
and in-kind transfers); better targeting
 expansion of coverage
 increase in the amount of transfers per capita
33

Increase in relative demand for skilled labor
petered out: Fading of the unequalizing effect
of skill-biased technical change in the 1990s:
Argentina, Mexico & Peru

Decline in relative supply of low-skilled
workers: Expansion of basic education since
the 1990s: Brazil, Mexico and Peru; expansion
of access to post-secondary in Chile
Supply vs. Demand: THIS SHOULD BE THE
FOCUS OF FUTURE RESEARCH
34
35
Incomplete primary
Primary
Secondary
Tertiary
40.0
35.0
30.0
Percent
25.0
20.0
15.0
10.0
5.0
0.0
1990
1998
2000
2006
2009
36
Other effects:
 Decline in spatial labor market segmentation in
Brazil. FUTURE RESEARCH: PATTERNS OF
GROWTH AND DECLINING SPATIAL WAGE
DIFFERENTIALS
 In the case of Argentina, the decline also driven
by a pro-union government stance and by the
impetus to low-skill intensive sectors from
devaluation. In Brazil, increase in minimum
wages. FUTURE RESEARCH: DISENTANGLE
INSTITUTIONAL FROM MARKET FACTORS
37
New forms of SOCIAL PROTECTION have been
key
 In particular, Conditional (and Unconditional) Cash
Transfers: Bolsa Familia (Brazil) and
Oportunidades (Mexico); Jefes y Jefas y
Asignacion Universal por Hijo (Argentina);
Juancito Pinto (Bolivia); etc.
 In Brazil and Mexico, large-scale conditional cash
transfers => can account for between 10 and 20
percent of reduction in overall inequality. An
effective redistributive machine because they cost
around .5% of GDP.

38

It appears that in the race between skill-biased
technological change and educational upgrading
(Tinbergen’s theory), in the last ten years the
latter has taken the lead; the opposite of what
has happened in the US (Goldin and Katz, 2008)

Perhaps as a consequence of democratization and
political competition, government (cash and inkind) transfers have become more generous and
targeted to the poor (Robinson, 2010)
39

Trends in declining skill-premium continued
through 2009 (most recent data points
available) for the most part

Also, since 2008/9, Argentina and Brazil
expanded spending on programs targeted to
the poor; Pension Moratorium and Universal
per Child Transfers in Argentina are
potentially very redistributive
40

Despite the observed progress, inequality continues to
be very high and the bulk of government spending is
not progressive.

The decline in inequality resulting from the educational
upgrade of the population will eventually hit the
‘access to tertiary education barrier’ which is much
more difficult to overcome: inequality in quality and
‘opportunity cost’ are high and costly to address.

Making public spending more progressive in the future
is likely to face more political resistance (entitlements
of some powerful groups).
41

Coping with adverse shocks:
 Economic Crises: unemployment, falling incomes
 Natural Disasters
 Spikes in Food Prices
42


Crucial
Exchange of know-how; what works; what
doesn’t extremely valuable for:
 Efficiency and efficacy of programs
 Political survival of programs


Access to high quality education; instruments to
cope with systemic shocks; how to deal with
tensions between programs who target the poor
and universal coverage/middle class social
protection
Integrate evaluation results to the exchange;
better measures of inequality
43
44