Monetary Poverty. Growth and Redistribution
DOI:
https://doi.org/10.35319/lajed.201320104Keywords:
Poverty, growth, redistributionAbstract
This paper documents and explains the evolution of monetary poverty in Bolivia during the period 1999-2011. First, we find a significant reduction in both, extreme and moderate, poverty. During the period under analysis, extreme poverty headcount, gap and severity have reduced in 55, 67 and 73%; while moderate poverty headcount, gap and severity have reduced in 32, 50 and 60%, respectively. The speed of poverty reduction was greater in extreme poverty than in moderate poverty, with significant differences by poverty measures, areas, and time periods. On the one hand, the average reduction rate in extreme poverty headcount in urban areas was 10.4% per year in the 2005-2011 period and 3.5% per year in the 1999-2005 period; while in rural areas was 7.2% per year in the 2005- 2011 period and 3.9% per year in the 1999- 2005 period. On the other hand, the average reduction rate in moderate poverty headcount in urban areas was 3.7% per year in the 2005-2011 period and 1.9% per year in the 1999-2005 period; while in rural areas was 4.4% per year in the 2005-2011 period and 2.4% per year in the 1999-2005 period. Second, we find that growth of and redistribution in per capita household income have played different roles in poverty reductions by are and time period. On the one hand, poverty changes in urban areas during the 1999-2005 period are mainly explained by the growth in per capita income -which was enough to compensate for the increase on income inequality; while poverty changes during the 2005-2011 period was the result of both, growth in and redistribution of per capita income. On the other hand, poverty reductions in rural areas are mainly explained by the sustained growth of per capita household income, more intense during the last than during the first period.
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