Evolution of monetary poverty in Colombia: An analysis of decompositions
DOI:
https://doi.org/10.24215/18521649e026Keywords:
poverty, economic growth, inequality, ColombiaAbstract
This paper studies the influence, on the one hand, that income growth, distributional changes and local price variation and, on the other hand, the economic and socio-demographic characteristics of households on the evolution of monetary poverty in Colombia during the 2002-2018 period, considering the heterogeneity across the country. First, the change in poverty is decomposed between growth, redistribution and poverty line effects. Later, we decompose the growth, redistribution and line effects into composition and structure effects, to explore the role of microeconomic factors. The results show that growth and redistribution effects tended to reduce poverty, while the line effect tended to increase it, a pattern that was maintained across the different geographic areas. It is also found that the growth effect was mainly explained by the change in household characteristics (composition effect) and the redistribution effect by the change in parameters (structure effect), while the total change in poverty was mainly due to the composition effect.
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