What is pro-poor policy?
• A government policy can be said to be pro-poor if it benefits the poor more than the non-poor.
• It means that with a fixed cost to the government, a pro- poor policy should achieve greater poverty reduction compared to a counter-factual situation when everyone receives exactly the same benefit from the policy.
• Policy A will be more pro-poor than policy B if for a given cost, policy A leads to a greater poverty reduction than policy B.
.
∫ ∂ ∂
= b x f x dx x
P
b 1 ( ) ( ) λ ηθ
Pro-poor Policy Index
Example: (i) = 1.20 : a programme reduces poverty 20% more compared to a
counterfactual universal targeting (ii) = 0.70 : a programme reduces poverty
30% less compared to a universal targeting
λ
λ
Worse and best scenarios
• Imperfect targeting: worst scenario
0 ) ( x =
b if x < z
0 ) ( x ≥
b if x ≥ z
• Perfect targeting: best scenario
When only the poor receive all the benefits .
When only the non-poor receive all the benefits.
0 ) ( x ≥ b
0 ) ( x =
b x ≥ z
if
if
If x< z
5 6 7 8 9 10 11 12 13 14 15 16 17 0
10 20 30 40 50 60
Poor Non-poor
Figure2: Percentage of children receiving benefits by poverty status The poor have greater access to Bolsa-Escola than the
Non-poor.
5 6 7 8 9 10 11 12 13 14 15 16 17 Total 0
10 20 30 40 50
Exclusion Inclusion
Figure 3: Exclusion and inclusion errors
Exclusion error: probability of not receiving benefits when poor Inclusion error: probability of receiving benefits when non-poor
Bolsa-Escola has large exclusion error
5 6 7 8 9 10 11 12 13 14 15 16 17 50
60 70 80 90 100 110
Poor non-beneficiery Non-poor non-beneficiery
Percentage of children attending school who are non-beneficiery
5 6 7 8 9 10 11 12 13 14 15 16 17
65 70 75 80 85 90 95 100 105
Poor beneficiery Non-poor beneficiery
Percentage of children attending school who receive benefits
Bolsa-Escola reduces the gap between poor and non-poor in
school attendance
5 6 7 8 9 10 11 12 13 14 15 16 17 50
60 70 80 90 100 110
Poor beneficiery Poor non-beneficiery
Percentage of poor children attending school
5 6 7 8 9 10 11 12 13 14 15 16 17
75 80 85 90 95 100 105
Non-poor beneficiery Non-poor non-beneficiery
Percentage of non-poor attending school
Bolsa-Escola has greater impact on school attendance among
the poor than the non-poor.
Table 2: PPP index for beneficiaries
PPP index for beneficiaries Universal targeing 5-17 years
Gap Severity Gap Severity
Metropolitan 2.82 3.02 1.54 1.56
Urban 2.39 2.49 1.44 1.48
Rural 1.47 1.59 1.29 1.36
Brazil 2.35 2.52 1.46 1.50
Table 3: PPP index for applicants
PPP index for beneficiaries
Gap Severity
Metropolitan 2.93 3.19
Urban 2.21 2.34
Rural 1.38 1.45
Brazil 2.17 2.30
Bolsa-Escola is generally pro-poor
Santa Catar São Paulo Rio de Janei Rio Grande d Paraná Rondônia Distrito Fede Mato Grosso Goiás Espírito Sant Minas Gerais Mato Grosso Roraima Acre Amapá Pará Amazonas Tocantins Sergipe Rio Grande d Paraíba Pernambuco Ceará Bahia Piauí Maranhão Alagoas 0.3
0.4 0.5 0.6 0.7 0.8 0.9
Fig: Targeting Efficiency of Bolsa-Escola
The poorer states generally have greater targeting efficiency
T a b l e 5 : P r o - p o o r i n d e x b y l e v e l s o f g r a d e s
G r a d e P o v e r t y S e v e r i t y o f
g a p p o v e r t y
P r i m a r y - r e g u l a r 1 . 5 3 1 . 5 7
P r i m a r y - r e g u l a r p u b l i c 1 . 6 8 1 . 7 3
P r i m a r y - r e g u l a r p r i v a t e 0 . 2 7 0 . 2 3
S e c o n d a r y - r e g u l a r 0 . 7 3 0 . 6 3
S e c o n d a r y - r e g u l a r p u b l i c 0 . 8 3 0 . 7 2
S e c o n d a r y - r e g u l a r p r i v a t e 0 . 1 0 0 . 0 9
A d u l t p r i m a r y 1 . 0 9 1 . 0 4
A d u l t s e c o n d a r y 0 . 5 2 0 . 4 4
T e r t i a r y 0 . 0 7 0 . 0 7
T e r t i a r y p u b l i c 0 . 1 2 0 . 1 0
T e r t i a r y p r i v a t e 0 . 0 5 0 . 0 6
A d u l t l i t e r a c y 1 . 7 3 1 . 9 0
C h i l d c a r e 1 . 0 8 1 . 1 4
P r e - s c h o o l 1 . 4 6 1 . 5 6
P r e - v e s t i b u l a r ( p r e - t e r t i a r y ) 0 . 1 9 0 . 1 5
P o s t - g r a d u a t i o n 0 . 0 0 0 . 0 0
Inequity in Brazilian education system is very high
Table : Degree of age mismatch in Brazil 2003
Poor Non-poor Total
Gross enrollment ratio
Primary - regular 120.8 118.2 119.3
Secondary - regular 49.1 97.6 81.2
Net enrolloment ratio
Primary - regular 92.2 94.8 93.7
Secondary - regular 21.6 54.1 43.1
Age mismatch
Primary - regular 1.31 1.25 1.27
Secondary - regular 2.27 1.80 1.88
Degree of age mismatch is higher among the poor
Private Expenses with Education
Private Expenses with Education --MonthlyMonthly
Pre-School 75.78 0.82 1.08
Regular Basic Education 166.76 2.55 1.53
Regular Secondary Education 194.10 1.43 0.74
Regular Tertiary Education 324.95 5.41 1.67
Combined Grades 48.27 0.07 0.14
College Entrance Exams (Pré-Vestibular) 59.90 0.31 0.53
Technical Education 53.25 0.09 0.17
Master’s 222.03 0.42 0.19
Doctorate 138.85 0.00 0.00
Educational Textbooks-Primary & Secondary 9.14 0.36 3.91
Other educational books and
technical magazines 13.56 0.25 1.82
% BRAZILIANS WITH EXPENSE PER BRAZILIAN
R$ SPENT PER STUDENT
R$ SPENT
Other expenses 26.61 3.23 12.13
in Relation to Illiterates*
Highest Level Studied
% Employed
Average
Salary R$ Hourly Wage
Probability of
Employment
*
%Wage Premium*
Illiterates 60.65 321.73 1.97 1 0
Basic 63.73 517.11 2.99 1.36 40.05
Secondary 68.11 767.08 4.31 2.29 125.23
Undergraduate 78.16 1681.52 10.31 3.80 318.76
Graduate 81.48 3041.1 18.22 4.08 540.42
* controlled by gender, color or race, age, migration, city size, type of sector and federal unit
Source: CPS/IBRE/FGV based on PNAD 2005/IBGE microdata.Labor Impacts on Education
Source: CPS/FGV based on PNAD/IBGE Health Supplement Microdata.
Was in bed rest during the last two weeks %
2,86
1,51
2,86 2,83 2,79 2,69
2,22 2,25
1,98 1,79 2,86
2,23
1,94
1,17 1,68
0,0 0,5 1,0 1,5 2,0 2,5 3,0
Income and/or Education
Considers own Health State to be Good or Very Good %
72,57
77,59
80,81
85,82
91,33
72,57 73,1 73,93
76,11
85,12
72,57
78,06
95,79
81,87
87,93
70 75 80 85 90 95 100
Income and/or Education
CONSTANT INCOME = 162
CONSTANT EDUC = LESS THAN 1 YEAR
INC AND EDUC VARIATING
