Factors Associated with Poverty Dynamics in Five Latin American Countries.

MAURIZIO, ROXANA; BECCARIA, LUIS; VÁZQUEZ, GUSTAVO; ESPRO, MANUEL

Montevideo

Workshop; RIDGE/NIP-LACEA Workshop on Inequality Poverty and Politics; 2015

RIDGE

Latin America experienced a long period of sustained growth since 2003 that positively impacted social and labor market indicators, including poverty. This paper contributes to the understanding of this process as it carries out a comparative study of poverty and indigence dynamics in five Latin American countries during 2003-2012. It analyzes the extent to which countries with different levels of poverty (extreme poverty) incidence diverge in terms of exit and entry rates, and identifies the relative importance of the frequency and impact of events associated with poverty transitions. For this, a dynamic analysis of panel data is carried out using regular household surveys. Sizeable rates of poverty and extreme poverty movements were observed in all five countries and it was found that a large proportion of poor or indigent households experienced positive events, mainly related to the labor market; however, only a small fraction of them actually exited poverty and indigence. Demographic events and public cash transfers proved to be of little relevance. It appeared therefore that even when the economy behaved reasonably well at the aggregate level, high levels of labor turnover and income mobility (even of a negative nature) still prevail, mainly associated with the high level of precariousness and the undeveloped system of social protection that characterize the studied countries.