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Poverty Reduction in Brazil: Changes in the Profile and in the Determinants during the Early 2000s

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This article analyses the evolution of metropolitan poverty in Brazil between 2001 and 2013, comparing it with the poverty in rural and non-metropolitan urban areas. Therefore, we will be able to identify whether poverty is becoming more urban and metropolitan and to point out the particularities of this process. Moreover, this article explores the determinants of poverty reduction through two ways: (i) the contribution of economic growth and income redistribution; and (ii) the decomposition into its direct determinants, such as access to work and to different types of income. Given the complexity and the multidimensional aspect of poverty, three poverty lines were used as a reference: (i) the official line for the Federal Government’s social programs (R$140/month in June 2011); (ii) the line based on a basket of goods and services that varies according to housing location; and (iii) the relative line, equal to 60% of the median per capita household income. The comparison of poverty rates measured by the different lines shows a generalized reduction, which is slower in relation to relative poverty than in relation to absolute poverty. The line based on the consumer basket seems more appropriate for the study of metropolitan poverty issues, since it accounts for the higher costs of living in these areas. Using this line, we observe a process of poverty metropolization: in 2013, the poverty rate in metropolitan regions was higher than the rural poverty rate. Finally, the results of the decompositions show two other important aspects: the greater contribution of income redistribution and the lesser role of other sources of income besides work, such as government cash transfers, to explain the poverty reduction in metropolitan regions if compared to rural and non-metropolitan urban areas.