Growing Apart: Inequality and Poverty Trends in Brazil in the 1980s

Abstract

This paper analyses the evolution of inequality and poverty in Brazil during the 1980s, using a large repeated cross-section household survey data set. We calculate standard scalar measures of inequality and poverty, together with decile means and decile shares. We also present percentile statistics in the form of Pen's Parades, Lorenz and Generalised Lorenz curves. First and second order stochastic dominance results are reported for a number of distributions, and statistical tests are performed to infer population dominance, generating robust welfare and inequality comparisons. Analogously, mixed stochastic dominance is used in poverty comparisons. Sensitivity of the measures and of the observed trends to the equivalence scale used is investigated. The main finding is that inequality worsened unambiguously, although not monotonically, during the 1980s. Poverty also rose, despite some growth in mean reported incomes, but its behaviour was more cyclical than that of inequality.