Measuring Changes in Poverty in Colombia: The 2000s

Abstract

This paper analyzes the change in poverty between 2002 and 2013 in Colombia. We find that more than 90 percent of the reduction in poverty is explained by economic growth, and that wages are the main household income contributing to poverty reduction. In particular, 71% and 85% of poverty reduction comes from labor income in urban and rural areas, respectively. Cash transfers also played an important role in reducing poverty and inequality. Our estimates suggest that without cash transfers, poverty would have been 4 percentage points higher in 2013 and the income distribution would have been worse. The paper also finds that increases in labor income have been driven by a growing proportion of populationacquiring skills at technical and professional level. However, when we focus on the poor population, increases in their labor incomes are not explained by higher educational levels, but by higher market wage levels.