Abstract:
In this study we present evidence of the impact of demographic factors on the level of poverty based on the Brazilian experience. Two demographic factors were investigated: a) the size and b) the age composition of the population. The goal was to estimate through the micro-simulation approach the impact of changes in these two factors on the distribution of income and consequently on the level of poverty. We presented estimates of the impact on poverty of a series of alternative demographic changes. First, we consider the demographic changes that occurred over the previous decades. We showed that these changes led to a continuous reduction in poverty, which is equivalent to an additional 0.4 to 0.5 percentage point in annual growth in per capita income. Since the average growth rate in per capita income in Brazil over the studied period was close to 3.0% per year, the estimated direct impact of the demographic transition had an impact on poverty close to 15% of the corresponding impact of economic growth. We also investigated: a) the importance of regional differences in demographic conditions and b) demographic differences between poor and rich families for explaining concomitant differences in poverty. Accordingly to our estimates, we can conclude that overall secular demographic changes tend to have much greater impact on poverty than differences in the time and the speed of the demographic transition across regions and between poor and rich families.
