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Citation Information

Type Working Paper
Title The Impacts of Income Transfer Programs on Income Distribution and Poverty in Brazil: An Integrated Microsimulation and Computable General Equilibrium Analysis
Author(s)
Publication (Day/Month/Year) 2010
URL https://www.gtap.agecon.purdue.edu/resources/download/4411.pdf
Abstract
A persistent and very high-income inequality is well known feature of the Brazilian economy. However, from 2001 to 2005 the Gini index presented an unprecedented fall of –4.6% combined with a significant poverty reduction. Former studies using partial equilibrium analysis have pointed out the importance of federal government transfer programs for this inequality reduction. The aiming of this research was to evaluate the efficiency of the two most important cash transfer programs, “Bolsa Família” and “BPC”, in achieving their purposes of alleviating poverty and reducing the inequality in Brazil’s income distribution using an integrated modeling approach, CGE-MS model. The simulation results confirm the importance of these programs to reduce inequality during 2003-2005. But, the effect on poverty alleviation was not strong. Finally, the methodological approach allows the identification of some important economic facts that were not presented in previous analysis, such as the issue of taxation structure that finances these policies.

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