Poverty and Inequality trends in Chile from 1990 to 2013: Income-based and Multidimensional analysis.

Abstract

In this study, we analyze the evolution of poverty and inequality in Chile during a period of continuous growth. We use data from National Socio-Economic Characterization Survey to estimate poverty and inequality from 1990 to 2013 applying two approaches; income and multidimensional. We use decomposition methodologies to analyze the eff ects of economic growth on poverty and inequality, and the evolution of poverty and inequality by subgroups. Results show that overall when economic growth took place, poverty and inequality decreased independently on the method used for the analysis. Decomposition in urban and rural areas shows that people from rural sectors, generally present lower income levels and higher rates of deprivation. Race and age decomposition show that indigenous people and young adults, aged 18-29, display higher levels of deprivation, being Education and Social Security the dimensions having the largest contribution to the aggregate levels of poverty. Finally, the policy simulations suggest that a multidimensional approach can be a useful tool to analyzed the efficiency of targeted public policies.