1. The recent decline in income inequality in Brazil and its consequences on poverty Ricardo Paes de Barros (IPEA) Bogota, October 2007

2. 1. Magnitude

3. In 2006, inequality continues to decline at the same rate

4. Four reasons why this decline must be celebrated

5. From the average to the lowest level

6. Few countries have reduced inequality faster than Brazil

7. Poverty have declined three times faster than required by the first millennium development goal

8. Brazil did in four years what took 15 years for the Latin American region to do

10. At least one half of the decline in poverty was due to the reduction in inequality

12. Over the past five years the income of the poor have been growing like the per capita GDP in China

13. From 2001 to 2006 the per capita income of the bottom 10% increased at a Chinese rate (9% per year). It was more than three times the national average (2,5%)

16. The need for continuity

19. Immediate Determinants

23. Improvements in the labor marketand the increase in government transfers equally explain the decline in poverty and inequality in Brazil Improvements in the labor market and the increase in government transfers equally explain the decline in poverty and inequality in Brazil

24. The Life Cycle Bias of Government Transfers in Brazil

28. We have been giving priority to the elderly, while reducing poverty

29. As a consequence, the level of poverty among children is almost tenfold higher than among the elderly

31. Educational Progress

39. Labor Market Imperfections: Discrimination and Segmentation

45. Let us limit our celebration, after all the decline in inequality has not been accompanied by a major concomitant increase in labor productivity

47. The exit path for the very poor remains limited. Brazilian social policy does not seem very effective in giving short-run opportunities for the very poor

54. The very limited effectiveness of the Minimum Wage Policy for reducing poverty and inequality