Vulnerability to Poverty in Latin America - Empirical Evidence from Cross-Sectional Data and Robustness Analysis with Panel Data

75 Pages Posted: 7 Dec 2010  

Leonardo Gasparini

Universidad Nacional de La Plata - Faculty of Economics

Guillermo Cruces

Universidad Nacional de La Plata - Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS); IZA

Marcelo Bérgolo

Universidad de la Republica - Instituto de Economía; Universidad Nacional de La Plata - Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS)

Andrés Ham

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Date Written: December 6, 2010

Abstract

This document presents a discussion of vulnerability estimates – defined as the risk of being poor in the future – in Latin American countries from both a conceptual and an empirical perspective, based on recent developments in the distributive literature. The document develops two main contributions. First, it presents cross-sectional vulnerability estimates (and their evolution over time) for 18 countries in the region, and compares their evolution with that of aggregate poverty rates. Second, based on longitudinal data for Argentina and Chile, the document carries out a validation exercise to assess how vulnerability measures fare as predictors of poverty at the aggregate and the micro levels, and compares their performance to that of other deprivation indicators. The main findings indicate substantial cross-country differences in vulnerability levels. Moreover, vulnerability measures provide good estimates of aggregate poverty trends. However, the validation exercise indicates that at the micro level there are sizeable misclassifications of households in terms of expected poverty. These results imply that vulnerability estimates should be complemented with information on shocks and aggregate trends for guiding focalised policy interventions.

Keywords: Vulnerability, Panel Data, Latin America

Suggested Citation

Gasparini, Leonardo and Cruces, Guillermo and Bérgolo, Marcelo and Ham, Andrés, Vulnerability to Poverty in Latin America - Empirical Evidence from Cross-Sectional Data and Robustness Analysis with Panel Data (December 6, 2010). Chronic Poverty Research Centre Working Paper No. 170. Available at SSRN: https://ssrn.com/abstract=1721003 or http://dx.doi.org/10.2139/ssrn.1721003

Leonardo Gasparini (Contact Author)

Universidad Nacional de La Plata - Faculty of Economics ( email )

1900 La Plata
Argentina

Guillermo Cruces

Universidad Nacional de La Plata - Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS) ( email )

Centro de Estudios Distributivos, Laborales y
Sociales, Calle 6 e/47 y 48
La Plata, Provincia de Buenos Aires 1900
Argentina

HOME PAGE: http://cedlas.econo.unlp.edu.ar

IZA

P.O. Box 7240
Bonn, D-53072
Germany

Marcelo Bergolo

Universidad de la Republica - Instituto de Economía ( email )

Montevideo
Uruguay

HOME PAGE: http://www.iecon.ccee.edu.uy

Universidad Nacional de La Plata - Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS) ( email )

Calle 6 e/47 y 48
La Plata, Provincia de Buenos Aires 1900
Argentina

Andrés Ham

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
Urbana, IL 61801
United States

HOME PAGE: http://publish.illinois.edu/andresham/

Paper statistics

Downloads
63
Rank
290,468
Abstract Views
348