This paper investigates the causal consequences of Tropical Storm Agatha (2010) -- the strongest tropical storm ever to strike Guatemala since rainfall records have been kept -- on household welfare.
... See More + The analysis reveals substantial negative effects, particularly among urban households. Per capita consumption fell by 12.6 percent, raising poverty by 5.5 percentage points (an increase of 18 percent). The negative effects of the shock span other areas of human welfare. Households cut back on food consumption (10 percent or 43 to 108 fewer calories per person per day) and reduced expenditures on basic durables. These effects are related to a drop in income per capita (10 percent), mostly among salaried workers. Adults coped with the shock by increasing their labor supply (on the intensive margin) and simultaneously relying on the labor supply of their children and withdrawing them from school. Impact heterogeneity is associated with the intensity of the shock, food price inflation, and the timing of Agatha with respect to the harvest cycle of the main crops. The results are robust to placebo treatments, household migration, issues of measurement error, and different samples. The negative effects of the storm partly explain the increase in poverty seen in urban Guatemala between 2006 and 2011, which national authorities and analysts previously attributed solely to the collateral effects of the global financial crisis.
See Less -
Policy Research Working Paper WPS7177 JAN 01, 2015
Baez, Javier E.; Lucchetti, Leonardo; Genoni, Maria E.; Salazar, Mateo
Over the past decade (2003-12), Latin America has experienced strong income growth and a notable reduction in income inequality, with the region's Gini coefficient falling from 55.6 to 51.8.
... See More + Previous studies have warned about the sustainability of such a decline, and this paper presents evidence of stagnation in the pace of reduction of income inequality in Latin America since 2010. This phenomenon of stagnation is robust to different measures of inequality and is largely attributable to the impact of the Global Financial Crisis on Mexico and Central America, where inequality rose after 2010 as labor income recovered. Moreover, this paper finds evidence that much of the continuation of inequality reduction after the crisis at the country level has been due to negative or zero income growth for households in the top of the income distribution, and lower growth of the incomes of the poorest households. The crisis also highlighted weaknesses in the region's labor markets and the heavy reliance on public transfers to redistribute, underscoring the vulnerability of the region's recent social gains to global economic conditions.
See Less -
Policy Research Working Paper WPS7146 DEC 01, 2014
The Latin America and Caribbean (LAC) region has made laudable progress in the past fifteen years in reducing poverty, building the middle class, and promoting prosperity for all levels of society.
... See More + Extreme poverty, defined in this region as life on less than $2.50 a day, has declined by half, while in 2011 for the first time in recorded history the LAC region had a larger number of people in the middle class than in poverty. Across this region of close to 600 million people, the poor have been gaining faster than the already well off. But despite these impressive achievements, about 80 million people still live in extreme poverty, half of them in Brazil and Mexico. And millions more who have risen out of poverty risk being pulled back down into it by economic shocks and severe weather brought on by climate change. This brief reviews the LAC's progress toward these objectives, outlines the continuing challenges and proposes a policy framework for keeping the region on its upward arc and picking up the speed.
See Less -
Publication 78507 JUN 01, 2013
J. Cord, Louise; Lucchetti, Leonardo; Rodriguez-Castelan, CarlosSpanish
The Latin America and Caribbean (LAC) region has made laudable progress in the past fifteen years in reducing poverty, building the middle class, and promoting prosperity for all levels of society.
... See More + Extreme poverty, defined in this region as life on less than $2.50 a day, has declined by half, while in 2011 for the first time in recorded history the LAC region had a larger number of people in the middle class than in poverty. Across this region of close to 600 million people, the poor have been gaining faster than the already well off. But despite these impressive achievements, about 80 million people still live in extreme poverty, half of them in Brazil and Mexico. And millions more who have risen out of poverty risk being pulled back down into it by economic shocks and severe weather brought on by climate change. This brief reviews the LAC's progress toward these objectives, outlines the continuing challenges and proposes a policy framework for keeping the region on its upward arc and picking up the speed.
See Less -
Publication 78507 JUN 01, 2013
J. Cord, Louise; Lucchetti, Leonardo; Rodriguez-Castelan, CarlosEnglish
This paper validates a recently proposed method to estimate intra-generational mobility through repeated cross-sectional surveys. The technique allows the creation of a "synthetic panel" -- done by predicting future or past household income using a set of simple modeling and error structure assumptions -- and thus permits the estimation of lower and upper bounds on directional mobility measures.
... See More + The authors validate the approach in three different settings where good panel data also exist (Chile, Nicaragua, and Peru). In doing so, they also carry out a number of refinements to the validation procedure. The results are broadly encouraging: the methodology performs well in all three settings, especially in cases where richer model specifications can be estimated. The technique does equally well in predicting short and long-term mobility patterns and is robust to a broad set of additional "stress" and sensitivity tests. Overall, the paper lends support to the application of this approach to settings where panel data are absent.
See Less -
Policy Research Working Paper WPS5916 DEC 01, 2011
Food price inflation in Brazil in the twelve months to June 2008 was 18 percent, while overall inflation was seven percent. Using spatially disaggregated monthly data on consumer prices and two different household surveys, we estimate the welfare consequences of these food price increases, and their distribution across households.
... See More + Because Brazil is a large food producer, with a predominantly wage-earning agricultural labor force, our estimates include general equilibrium effects on market and transfer incomes, as well as the standard estimates of changes in consumer surplus. While the expenditure (or consumer surplus) effects were large, negative and markedly regressive everywhere, the market income effect was positive and progressive, particularly in rural areas. Because of this effect on the rural poor, and of the partial protection afforded by increases in two large social assistance benefits, the overall impact of higher food prices in Brazil was U-shaped, with middle-income groups suffering larger proportional losses than the very poor. Nevertheless, since Brazil is 80 percent urban, higher food prices still led to a greater incidence and depth of poverty at the national level.
See Less -
Policy Research Working Paper WPS5652 MAY 01, 2011
Ferreira, Francisco H. G.; Fruttero, Anna; Leite, Phillippe; Lucchetti, Leonardo
This study supports the development of a more coherent and effective nutrition strategy in Ecuador through an analysis of the main nutrition issues, based on in-depth statistical analysis of a large new household survey dataset (ENDEMAIN 2004) and other data sources, together with a review of qualitative evidence regarding behavioral and program-access obstacles to improved nutritional outcomes.
... See More + It also reviews the existing programs and policies which aim to improve nutritional outcomes, considered the available evidence on the efficiency, effectiveness, targeting and inter-programmatic coherence of the programs and projects reviewed and suggests an agenda for policy discussions to improve these outcomes.
See Less -
This study supports the development of a more coherent and effective nutrition strategy in Ecuador through an analysis of the main nutrition issues, based on in-depth statistical analysis of a large new household survey dataset (ENDEMAIN 2004) and other data sources, together with a review of qualitative evidence regarding behavioral and program-access obstacles to improved nutritional outcomes.
... See More + It also reviews the existing programs and policies which aim to improve nutritional outcomes, considered the available evidence on the efficiency, effectiveness, targeting and inter-programmatic coherence of the programs and projects reviewed and suggests an agenda for policy discussions to improve these outcomes.
See Less -