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Poverty Transitions among Older Households in Brazil and South Africa

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Abstract

Using a panel data set of older people and their households in Brazil and South Africa, the article provides estimates of changes in the poverty status transitions of older people and their households over time, assessing the extent to which some panel households managed to escape from poverty, while others fell into poverty, and others remained persistently poor or persistently non-poor. It also provides an exploratory analysis of the factors associated with poverty transitions. The article finds that mean improvements in well-being among older households net out significant transitions into, and out of, poverty.

A l’aide de données de panel de ménages âgés au Brésil et en Afrique du Sud, cet article évalue l’évolution dans le temps de la transition du statut de pauvreté des personnes âgées et de leurs ménages. Nous évaluons en particulier dans quelle mesure certains ménages sont parvenus à sortir de la pauvreté, alors que d’autres se sont appauvris, et d’autres encore restent pauvre ou non pauvre de manière persistante. Nous effectuons également une analyse exploratoire des facteurs associés avec ces processus de transitions. Nous constatons que les améliorations moyennes du bien être des ménages âgés peuvent induire des entrées tant que des sorties de la pauvreté.

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Notes

  1. See, inter alia, Addison et al (2009); Woolard and Klasen (2005); Baulch and Hoddinott (2000); Yaqub (2000); Duncan et al (1993).

  2. The poverty lines employed by these studies were R515 (2008 Rand or US$PPP 96) for South Africa and R100 (September 2004 Reais or US$PPP 67.6) for Brazil. The estimates for Brazil are based on analysis of the national household survey PNAD for the relevant years, whereas the South Africa estimates are based on PSLSD 1993, IES 2000 and NIDS 2008 datasets (Ferreira and Leite, 2009; Leibbrandt et al, 2010). PNAD stands for Pesquisa Nacional por Amostra de Domicílios. PSLD stands for the Project for Statistics on Living Standards and Development collected by SALDRU, the Southern Africa Labour and Development Research Unit at the University of Cape Town; and IES stands for Income and Expenditure Survey; and NIDS stands for National Income Dynamics Study.

  3. Per capita income measures could be said to overstate poverty rates among families with children, as no account is taken of economies of scale in household production or differences in resources required to ensure equal welfare outcomes for children and adults (Barrientos et al, 2003). Streak et al (2009) argue that per capita measures of welfare are appropriate to conditions in South Africa.

  4. This has given rise to policy debates in both countries around a potential age bias toward older people relative to children in Brazil (Camargo, 2004; Turra et al, 2007) and relative to persons of working age in South Africa (van der Berg, 2001).

  5. The study website is at: http://www.sed.manchester.ac.uk/research/ageingandwellbeing/index.htm.

  6. Details about the tracing and replacement strategies are available at the project website or upon request directly from the authors.

  7. Resource constraints did not make it possible to cover the countries in full. Instead, locations in two regions in each country, Metropolitan Rio and Ilheus in Brazil and Western and Eastern Cape in South Africa, were selected to provide information on urban and rural areas with below average socio-economic conditions, using a proportional to size sampling strategy. Rural Ilheus and rural Eastern Cape are among the poorest areas in Brazil and South Africa, respectively. In South Africa, in addition to the rural–urban coverage, it was also necessary to take account of racial segregation in the selection of areas within the two regions. The sample excludes Whites and Indians. The data collected are therefore not representative of conditions in the two countries taken as a whole.

  8. Converting period attrition of 0.38 for Brazil and 0.35 for South Africa into annual rates by using the formula 1−(1−q)1/T, where q is period attrition and T the number of years elapsing in between the waves, yields 0.07 and 0.06, respectively.

  9. Using the income measure also fails to reject the null hypothesis that attrition is random.

  10. This is referred to as the lower bound poverty line in the South Africa poverty literature. For a more detailed recent discussion on South Africa poverty lines, see Leibbrandt et al (2010) and for an earlier discussion see May et al (2000).

  11. Social assistance benefits are set at the level of the minimum wage; while the threshold for entitlement to Bolsa Familia and other social assistance benefits is a per capita household income of around one-quarter of the minimum wage. A poverty line of one-half of the minimum wage appears to be a sensible mid-point.

  12. See Note 3. Most empirical work on poverty in South Africa and Brazil employs per capita welfare measures. Relying on per capita welfare indicators will facilitate comparability between the estimates in the article for older households and other works.

  13. The timing of data collection could affect household expenditure. The second wave of data were collected at the end of 2008, at a time when households may have been struggling to protect their consumption from the initial impact of the global financial crisis.

  14. Entitlement to the Previdência Social Rural in Brazil starts at age 55 for women and 60 for men, whereas entitlement to the Beneficio de Prestação Continuada was originally 67 years of age, but was reduced to 65 in 2003. Entitlement to the Old-Age Grant in South Africa started at 60 for women and 65 for men in 2002, but subsequently the government decided to equalise the age of entitlement at 60, by reducing the age of entitlement for men in steps, beginning in 2008. Some additional changes were made to the eligibility rules for the Beneficio de Prestação Continuada in 2004, including the exclusion of non-contributory pension transfers from the computation of household income for the purpose of eligibility entitlement. A rise in the likelihood of multiple beneficiaries within a household could have some influence over the comparison of poverty estimates over time.

  15. Entitlement to the Beneficio de Prestação Continuada is meant to be reviewed every 2 years. The PSR entitlements are not subject to review. The Old-Age Grant in South Africa has a review on paper, but implementation depends on administrative capacity at the local level.

  16. Experimentation with grouped categories (never-exit) provided additional information, but this is not reported here.

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Acknowledgements

Armando Barrientos and Julia Mase gratefully acknowledge support from the cross-UK Funding Council Programme on New Dynamics of Ageing. The article benefited greatly from detailed and thorough comments and suggestions from four reviewers, and the errors that remain are ours alone.

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Barrientos, A., Mase, J. Poverty Transitions among Older Households in Brazil and South Africa. Eur J Dev Res 24, 570–588 (2012). https://doi.org/10.1057/ejdr.2012.13

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