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Does Giving Cash to the Poor Reduce Inequality? The Cases of Brazil, Chile, and Colombia
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Ceulemans, Cedric
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Fall 2019
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2019
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Income and wealth inequality has risen in the majority of the globe since the 1990s, except for one region. Latin America has experienced a decline in the gap between the rich and the poor that corresponds to an average six-point drop of the GINI index. In this paper, I reviewed the recent literature that measures the effects that Conditional Cash Transfers (CCTs) had in reducing income inequality in three South American countries: Brazil, Chile, and Colombia. The evidence shows that, alongside a betterment in the job market brought along by economic growth, CCTs have played an essential role in reducing inequality in those countries. As a redistributive policy, CCTs helped increase the income of the poorest without increasing significantly public spending.
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