Human development policy and local opportunities:

evidence from Brazilian municipalitiesUrsula Mattioli Mello

This paper is part of my bachelor thesis developed under the

supervision of Professor Ana Maria Hermeto (CEDEPLAR/UFMG)

Brasília

July 2013

• Motivation

• Literature review

– Anti-poverty policy

– Brazilian scenario

– Local social policy

• Descriptive analysis

– Opportunity index

– Municipal expenditure

• Regression model

• Concluding remarks

AGENDA

AGENDA

• Motivation

• Literature review

– Anti-poverty policy

– Brazilian scenario

– Local social policy

• Descriptive analysis

– Opportunity index

– Municipal expenditure

• Regression model

• Concluding remarks

AGENDA

AGENDA

• Deep social transformation in Brazil

• “Poverty reduction without economic growth”(Ferreira,

Leite & Ravallion, 2007)

• The role of social policy

• New clusters for policy

• Human development policy

MOTIVATION

MOTIVATION

• Motivation

• Literature review

– Anti-poverty policy

– Brazilian scenario

– Local social policy

• Descriptive analysis

– Opportunity index

– Municipal expenditure

• Regression model

• Concluding remarks

AGENDA

AGENDA

POVERTY, GROWTH AND INEQUALITY

LITERATURE REVIEW

MACROECONOMIC MESOECONOMIC MICROECONOMIC

PROMOTING GROWTH MAKING IT INCLUSIVE

Poverty

Reduction

Inequality

reduction

Schooling

Different

economic

sectors

Multiple

variables

Different

elasticity of

poverty to

growth

Type of

occupation

Gender Household

Source: Ferreira (2010)

Economic

Growth

POLICY AND POVERTY

LITERATURE REVIEW

POLICY CLUSTERS

Source: World Bank (WDR-1980) Source: UNDP (HDR-2003)

HUMAN DEVELOPMENT

RURAL PRODUCTIVITY

INFRASTRUCTURE

NON-TRADITIONAL INDUSTRIAL

SECTORS

HUMAN RIGHTS, EQUITY,

POLITICAL PARTICIPATION

SUSTAINABLE DEVELOPMENT

POVERTY AND POLICY IN BRAZIL

Plano Brasil

sem Miséria

Programa Bolsa

FamíliaPlano Real

- Hyperinflation

- Fiscal debts

- Economic

stagnation

- AAGR 85-92:

-0.54%

1994 2003 2011

- Control of inflation

- Economic stabilization

- Commercial opening

- Cash transfers

- Raise of minimum

wage

- Raise of per capita

expenditure in social

areas (health,

education)

- 16.2 million of

extremely poor

- Three pillars for

policy: public

services,

guarantee of

income, inclusive

production

Slow and not inclusive growthInequality reduction

Moderate growth

Slow reduction of poverty Poverty reduction

Source: Ferreira, Leite e Ravallion (2007) ; IPEA(2011); Governo Federal (2011)

LITERATURE REVIEW

LOCAL POLICY

LITERATURE REVIEW

NATIONAL

PERSPECTIVE

LOCAL PERSPECTIVE

Anti-poverty policy focused on

income

Programa Bolsa Família

Minimum wage

Human Development Policy

Expenditures in health and education

Capture regional inequalities

Very different levels of expenditures and of

social indicators

• Motivation

• Literature review

– Anti-poverty policy

– Brazilian scenario

– Local social policy

• Descriptive analysis

– Opportunity index

– Municipal expenditure

• Regression model

• Concluding remarks

AGENDA

AGENDA

OVERVIEW

DESCRIPTIVE ANALYSIS

• Analysis of human development policy in the local

dimension

• Municipal expenditure in social areas is considered a

proxy for local policy in the municipalities

• To investigate the relationship between the level of

municipal expenditure and the “opportunity index”

• Limitations:

– Other expenditure and investments

– Inefficiency

– Corruption

• Model:

OPPORTUNITY INDEX

DESCRIPTIVE ANALYSIS

EDUCA-

TION

WORK &

INCOMEHEALTH

YOUTH EDUCATION (IFDM)

(i) Pre-school attendance

(ii) Age-grade distortion

(iii) % of teachers with superior

education

(iv) Average daily hourly

classes

(v) School drop out rates

(vi) IDEB

ADULT EDUCATION

% individuals of 25 years

and older that completed 8

years of schooling

BASIC HEALTH (IFDM)

(i) Number of pre-natal

consultations

(ii) Mortality for non-

defined reasons

(iii) Infant mortality for

avoidable causes

Source: FIRJAN; Censo/IBGE

WORK

(i) Unemployment rate

(ii) Formal employment

(iii) Generation of formal

employment (IFDM)

INCOME

(i) Average/growth of wage of

formal labor market (IFDM)

(ii) Average per capita income

(iii) Gini Index

EDUCATION

DESCRIPTIVE ANALYSIS

Source: FIRJAN; Censo/IBGE

Table 1 – Rate of adults (25+) that completed basic

education by quintile of per capita income (percent)

Quintile 2000 2010

1 10.6 26.9

2 16.1 35.4

3 24.1 45.8

4 40.3 50.7

5 69.8 78.3

Total 36.1 50.8

Source: CENSO/IBGE

Table 2 – Index of education for Brazilian

municipalities

2000 2010

Mean 0.5186 0.7066

Median 0.3852 0.5769

Max 0.8557 0.9567

Min 0.1008 0.2714

Source: FIRJAN; Censo/IBGE

HEALTH

DESCRIPTIVE ANALYSIS

Source: FIRJAN; Censo/IBGE

Table 3- Index of health for Brazilian municipalities

2000 2010

Mean 0.7120 0.8091

Median 0.6573 0.8104

Max 0.9887 1.0000

Min 0.0331 0.4421

Source: FIRJAN; Censo/IBGE

Table 4 – Percentage of municipalities per category of Index of Health

2000

Norte Nordeste Sudeste Sul Centro-Oeste Brazil

Low 4.9 5.2 1.8 0.0 0.0 2.6

Regular 57.5 70.5 17.1 5.5 6.7 34.5

Moderate 37.0 23.8 55.6 58.9 68.5 45.5

High 0.7 0.4 25.5 35.6 24.7 17.4

100.0 100.0 100.0 100.0 100.0 100.0

2010

Norte Nordeste Sudeste Sul Centro-Oeste Brazil

Low 0.0 0.0 0.0 0.0 0.0 0.0

Regular 17.1 4.9 0.9 0.1 1.1 3.3

Moderate 74.6 73.4 29.0 11.0 29.7 43.2

High 8.2 21.7 70.1 88.9 69.2 53.5

100.0 100.0 100.0 100.0 100.0 100.0

Source: FIRJAN

WORK & INCOME

DESCRIPTIVE ANALYSIS

Source: FIRJAN; Censo/IBGE

Table 5 – Unemployment & Informality Rate by

quintile of per capita income (percent)

QuintileUnemployment Informality

2000 2010 2000 2010

1 31.1 22.2 53.7 53.4

2 20.6 12.3 54.7 46.0

3 15.4 7.1 46.4 36.8

4 11.3 3.9 36.8 28.6

5 6.8 2.6 24.8 21.2

Total Brasil 15.3 7.7 40.1 33.3

Source: Censo/IBGE

Table 6 – Per capita income and Gini Index by region

RegionPer capita income* Gini Index

2000 2010 2000 2010

Norte 478.2 618.0 0.6542 0.6335

Nordeste 389.0 550.2 0.6665 0.6315

Sudeste 928.8 1086.8 0.6090 0.5873

Sul 823.9 1060.5 0.5892 0.5345

Centro-Oeste 844.8 1103.1 0.6414 0.6034

Brasil 727.4 901.0 0.6452 0.6106

*in R$ of 2010 (transformed using INPC)

Source: Censo/IBGE

Table 7 – Work&Income

Index

2000 2010

Mean 0.5987 0.7363

Median 0.4985 0.5466

Max 0.7857 0.8688

Min 0.2194 0.3398

Source: FIRJAN;

Censo/IBGE

OPPORTUNITY INDEX

DESCRIPTIVE ANALYSIS

Source: FIRJAN; Censo/IBGE

MUNICIPAL EXPENDITURE

DESCRIPTIVE ANALYSIS

MUNICIPAL EXPENDITURE

DESCRIPTIVE ANALYSIS

MUNICIPAL EXPENDITURE

DESCRIPTIVE ANALYSIS

• Motivation

• Literature review

– Anti-poverty policy

– Brazilian scenario

– Local social policy

• Descriptive analysis

– Opportunity index

– Municipal expenditure

• Regression model

• Concluding remarks

AGENDA

AGENDA

• Motivation

• Literature review

– Human development

– Poverty

– Policy

– Brazilian scenario

• Descriptive analysis

– Opportunity index

– Municipal expenditure

• Regression model

• Concluding remarks

AGENDA

AGENDA

CONCLUDING REMARKS

CONCLUDING REMARKS

Higher level of expenditure in health and

education is associated with a higher

level of opportunities. Expenditure in

health is more productive in 2010 than 2000. No difference for education.

Higher urbanization level and

municipality size are associated with higher level of opportunities

Higher dependency rate is associated with a lower level of opportunities

The municipalities that invest more on

human development policies in health

and education are the ones with a better

index

Demand for policy to raise productivity

of rural activities and to make services

accessible in rural areas

Specific policy should consider

demographic characteristics

Elderly Health

Children Education

Thank you!