Poverty and Income Distribution in a High Growth Economy : The Case of Chile 1987-98, Volume 1. Main Report
The study analyzes Chile's strong economic growth, and well directed social programs, a combination that reduced the poverty rate in half, during a period of just eleven years. The previously noted trends in falling poverty, in terms of incidence, depth, and severity, continued into 1998, and the analysis shows there was unambiguously less poverty between 1994, and 1998, observed at all levels of income. Clearly, income poverty is related to, and impacted by a number of important factors, such as level of education, larger families, or families headed by women, and employment opportunities. Evidence shows Chile achieved considerable improvements in key social indicators, i.e., infant mortality, life expectancy, and educational coverage, for the combination of the three social sector deficit measures of poverty - education, health, and housing - with the income poverty measure, reveals that fifty one percent of all households have neither social sector, nor income deficits. Nonetheless, income inequality remained high by international standards, and appeared to have worsened between 1994-98. Thus, adjusting income inequality for social spending became an important estimate, particularly if social programs were growing. The methodology estimated imputed income transfers from subsidies in the three sectors, and the analysis confirmed that adjustments for in-kind income transfers, substantially reduce the Gini coefficient on income inequality. Results indicate that Chile's success in reducing income disparities through social spending is linked to its system for targeting social programs.
| Summary: | The study analyzes Chile's strong
economic growth, and well directed social programs, a
combination that reduced the poverty rate in half, during a
period of just eleven years. The previously noted trends in
falling poverty, in terms of incidence, depth, and severity,
continued into 1998, and the analysis shows there was
unambiguously less poverty between 1994, and 1998, observed
at all levels of income. Clearly, income poverty is related
to, and impacted by a number of important factors, such as
level of education, larger families, or families headed by
women, and employment opportunities. Evidence shows Chile
achieved considerable improvements in key social indicators,
i.e., infant mortality, life expectancy, and educational
coverage, for the combination of the three social sector
deficit measures of poverty - education, health, and housing
- with the income poverty measure, reveals that fifty one
percent of all households have neither social sector, nor
income deficits. Nonetheless, income inequality remained
high by international standards, and appeared to have
worsened between 1994-98. Thus, adjusting income inequality
for social spending became an important estimate,
particularly if social programs were growing. The
methodology estimated imputed income transfers from
subsidies in the three sectors, and the analysis confirmed
that adjustments for in-kind income transfers, substantially
reduce the Gini coefficient on income inequality. Results
indicate that Chile's success in reducing income
disparities through social spending is linked to its system
for targeting social programs. |
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