Poverty among small farmers under Frei and Pinochet, 1968–1986

Abstract

This paper draws on the results of a nation-wide panel study of small farm households interviewed in 1968 and 1986 to complement accounts of Chile's economic performance under the governments of President Frei (1964–1970) and General Pinochet (1973–1989). It is shown that in contrast to macroeconomic trends of increased inequality and impoverishment after 1973, the incidence of poverty in the sample declined slightly but significantly over the period. The result is robust both to the choice of poverty index and poverty line. It is all the more striking because the sample represented the poorest group in Chile during the 1960s. Nevertheless, the incidence of poverty in the sample remained extremely high. In 1967–1968, more than three-quarters of households could not meet their basic needs, while in 1985–1986 this proportion reached nearly two thirds. The fall in poverty may be attributed to a combination of increased coverage of the rural areas by targeted welfare programmes and the effects of the life cycle in increasing the proportion of panel household members eligible for, and dependent on public transfers between 1968 and 1986.