Growth and redistribution components of changes in poverty measures. A decomposition with applications to Brazil and India in the 1980s

We show how changes in poverty measures can be decomposed into growth and redistribution components, and we use the methodology to study poverty in Brazil and India during the 1980s. Redistribution alleviated poverty in India, though growth was quantitatively more important. Improved distribution countervailed the adverse effect of monsoon failure in the late 1980s on rural poverty. However, worsening distribution in Brazil, associated with the macroeconomic shocks of the 1980s, mitigated poverty alleviation through the limited growth that occured. India's higher poverty level than Brazil is accountable to India's lower mean consumption; Brazil's worse distribution mitigates the cross-country difference in poverty.