Child Poverty Reduction in Brazil: Reversing Bismarck?



Fig. 10.1
Brazil Poverty Trends. Data Source: IPEA (2013)



As can be seen from the Fig. 10.1, Brazil shows impressive poverty reduction trends. Poverty has declined significantly in the last two decades to 2012. The decline in poverty accelerated in the decade since 2002 (Ferreira de Souza 2012; IPEA 2013).

The share of the population in poverty fell from 31.5 to 8.5 % between 1992 and 2012, while the share of the population in extreme poverty decreased from 13.7 to 3.6 %. This meant that 12 millions people escaped extreme poverty and 28 million people left poverty behind during this period (IPEA 2013). The poverty target of reducing extreme poverty by one half by 2025, established under the Millennium Development Goals in 2000, was achieved by Brazil in 2007 (Ferreira de Souza 2012).

Aggregate poverty trends can average out important disparities across age groups. Latin American countries have a higher incidence of poverty among children than for the rest of the population. It has been estimated that the incidence of extreme poverty among children is 2.3 times the incidence of extreme poverty in the rest of the population (UN Millennium Project 2005). Children make up a large proportion of the population in Brazil, with the implication that higher incidence of poverty among children translates into large numbers. According to the 2010 Census, approximately 40 % of the Brazilian population in extreme poverty consist of children below 14 years of age, 17.4 % consists of children aged 0–6. Other disparities are relevant too. Close to 78 % of children in extreme poverty are in the North and Northeast regions, and 68 % are black (Ministry of Social Development and Fight against Hunger 2013).

Figure 10.2 shows the incidence of poverty and extreme poverty across age groups, based on per capita household income in 2004 and 2009. It shows large differentials in poverty incidence. Poverty headcount rates are significantly higher for children below 18 years of age, than for people aged 65 and over. In 2004, the incidence of poverty and extreme poverty among the older group was 1.5 % and 0.9 % respectively; the respective figures for children aged 14–17 were 28.7 % and 14 %. The Figure also shows the sharp reduction of poverty in the period between 2004 and 2009 across age groups, and indicates that poverty fell faster for children, from a significantly higher base. The decline in poverty incidence over time is particularly marked for the youngest age group (Guerreiro Osorio et al. 2011). Needless to say, there is much further work to be done to eradicate poverty and extreme poverty among children.

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Fig. 10.2
Share of population group in poverty 2004–2009. Data Source: Osorio et al. 2011; extreme poverty and moderate poverty thresholds set at Bolsa Familia eligibility thresholds [RS$50 and RS$100 respectively in 2003]

Life-course factors generate differential wellbeing across age groups. Ferreira et al. (2002) find there is a positive correlation between the proportion of children in a household and their probability to be in poverty. And this correlation is stronger for younger children. Older people can also benefit from asset and wealth accumulation during their lifetimes with the implication that the presence of older people in a household is not correlated with poverty status.

Differential poverty incidence across age groups is strongly influenced by the fact that public transfers directed at older groups reach a large share of this population with higher transfer values compared to public transfers focused on children (Turra et al. 2007). To an important extent, public transfers to older groups are shared within their households. Having an older person in the family acts like an insurance against extreme poverty and poverty because they receive at least one minimum wage (Guerreiro Osorio et al. 2011). However, patterns of co-residence attenuate this intra-household distribution of the transfers, especially among better off pensioners. The expansion in the coverage of Bolsa Família has increased the resources flowing to families with children in poverty, but public transfers to older groups remain, in aggregate, significantly larger.

In addition to reductions in child income poverty, access to services including education are improving. School attendance rates increased from 88.7 to 97.6 % for children aged 6–14 and from 66.7 to 85.2 % for children aged 15–17 between 1995 and 2009 (Ferreira de Souza 2012). The educational attainment of the economically active population increased during the same period. The share of the economically active population with completed primary education rose from 34.5 to 61.7 %, the share with completed secondary education rose from 20.7 to 44.1 %, and the share with tertiary education almost doubled from 5.6 to 10.2 % (Ferreira de Souza 2012).

The discussion in this section described trends in poverty reduction in Brazil for the last two decades. They show a strong and sustained reduction in poverty and extreme poverty. Poverty incidence is significantly higher among children, but there are indications that the shift in social policy in Brazil has had some effect in generating a relatively faster decline in child poverty, from a high base. The next section introduces and discusses the role of Bolsa Escola and Bolsa Família in child poverty reduction in Brazil.



10.3 Bolsa Família and Child Poverty Reduction


The policy initiatives which followed the 1988 Constitution challenged the contributory approach characteristic of the Bismarckian approach, and sought to extend citizenship-based social policy. But there was little change in their age bias. They focused primarily on old age poverty and with supplementing social insurance with tax-financed transfers to older groups in poverty.1 The Beneficio de Prestação Continuada was introduced in 1996 with the aim of ensuring older people living in households with per capita incomes below a quarter of the minimum wage received a monthly transfer equivalent to the minimum wage. The scheme also extended to include people with disabilities in poor households. By 2010 the majority of beneficiaries qualified on grounds of disability. Children with disabilities accounted for around one third of beneficiaries. In parallel, municipal activism began to plant the seeds of a different approach to poverty reduction, free from the limitations of the Bismarckian approach and firmly focused on children. This is the focus of this section.


10.3.1 From Bolsa Escola to Bolsa Família


Bolsa Família has its roots in Bolsa Escola, a programme introduced in parallel in a handful of municipalities in 1995 with the aim of addressing the impact of crises on poor households. Bolsa Escola emerged from a combination of political support for income guarantees, a focus on persistent intergenerational poverty, and an understanding that its causes are multidimensional.2 The innovation was in linking income transfers with children’s school attendance and primary health care. The experimental programmes soon began to be replicated in other municipalities. In 1997 the federal government offered financial incentives to municipalities to support the adoption of Bolsa Escola.3 Bolsa Escola became a federal programme in April 2001 under the responsibility of the Ministry of Education. Bolsa Escola developed alongside federal initiatives, including the Programa de Erradicação do Trabalho Infantil (Programme for the Eradication of Child Labour or PETI) first introduced in 1996. Initially located in municipalities with high incidence of child labour in hazardous employment, the programme provided direct transfers to households as well as remedial education in after-school sessions. The programme was very successful, in part because of the supplementary education provided (Brazilian Court of Audit 2003). The success of Bolsa Escola and PETI, and especially their core idea of providing direct transfers to households in poverty, stimulated similar policy initiatives in other areas. The Ministry of Health introduced a Bolsa Alimentação in September 2001, aimed at expectant mothers and infants and with the objective of reducing malnutrition and infant mortality. In 2003, the Ministry of Mines and Energy began to implement a gas subsidy, Auxilio Gás, to compensate households in poverty for the phasing out of gas subsidies. Agente Jovem was another transfer programmes directed at young people.

The arrival of Lula to government in 2002 did not seem auspicious for this policy agenda at first. His campaign emphasised giving priority to the fight against hunger (Hall 2006), but in short time he announced the implementation of Bolsa Família as a single programme aiming to provide transfers to households in extreme poverty, and integrating all the existing subsidy programmes, which began in 2003. A new Ministry for Social Development and Zero Hunger was established to manage Bolsa Família in 2004.4 Bolsa Família greatly expanded the coverage of Bolsa Escola and the other income transfer programmes, from 6.5 million in 2004 to 14 million in 2013.


10.3.2 Programme Design


Bolsa Família is targeted to all families in Brazil experiencing extreme or moderate poverty. In 2010, families with per capita monthly income at or below R$70 (US$ 40)5 are considered to be in extreme poverty, while families with per capita income between R$71 and R$140 are considered to be in moderate poverty. Families in extreme poverty receive a basic monthly transfer of R$70, plus a transfer of R$32 (US$ 18) for each child up to the age of 15 and a transfer of R$38 (US$22) for up to two children aged 16 or 17. Families in moderate poverty receive child transfers only. Since 2012, families in extreme poverty and with a child aged up to 15 are guaranteed a top up to R$70 if their per capita monthly income after transfers is below this amount (Beneficio de Superação da Extrema Pobreza). Transfers are guaranteed for 2 years regardless of a subsequent change in economic circumstances for participant families.

Like Bolsa Escola, Bolsa Família attaches several conditions to the continuation of transfer payments. They cover schooling, health and social services. Participating households commit to ensuring that children up to 15 years of age have an 85 % record of school attendance, while youths aged 16–17 are required to complete 75 % of school attendance. Health conditions include a full immunisation schedule, child development monitoring for children under 7 years of age, pre-natal monitoring for pregnant women and monitoring for nursing mothers. Attendance of remedial education for children and youths at risk of child labour, which was a requirement under the PETI programme, has been retained in Bolsa Família. The conditions have a diagnostic role. Failure to comply with conditions should lead to consideration of whether additional interventions are needed. Non-compliance can lead to suspension of payments and exclusion from the programme.6 Compliance following suspension of a single payment can lead to restitution of payment with arrears. In a comparative context, conditions in Bolsa Família are described as ‘soft conditions’ (Cecchini and Martínez 2011).7


10.3.3 Impact


There is a growing literature assessing the impact of Bolsa Família and its antecedents Bolsa Escola and PETI.