Characterizing urban poverty over time: The use of the Age-Period-Cohort model for estimating chronic and transient poverty trends in Brazil

Abstract

The profile of poverty in Brazil has changed in recent decades, partially due to alterations in the reproduction and mortality standards of the population. During this same period, the designs of social policies, especially those for reducing poverty, have also undergone changes. It must be emphasized that the effectiveness of these policies depends on the type of poverty that is being dealt with. Destitution can be a permanent or temporary phenomenon, and this transient-chronic (T-C) composition may show a temporal trend. The objective of this paper is to analyze this trend as well as the temporal evolution of poverty rates in urban areas. The result may make it possible to predict future income and destitution. To this end, an Age-Period-Cohort (APC) model was applied to absolute and relative poverty measures and to the T-C composition, based on data from the PNADs between 1995 and 2003. The results indicate that the cohort-effect is more expressive than the period effect for the recent reduction in poverty rates, especially for the chronic component. In contrast, the transient component showed a relative temporal tendency to increase.