Understanding the Determinants of Poverty in Brazil: A Household Level Analysis

Abstract

ABSTRACT: This study aims to comprehensively examine the determinants of household poverty in Brazil, placing a specific emphasis on the heads of households as the primary unit of analysis. Household poverty is a critical and multifaceted issue in developing countries, a reality that holds true for Brazil as well. Understanding the intricate web of factors that contribute to household poverty is of paramount importance to policymakers, researchers, and advocates dedicated to poverty alleviation and socioeconomic development. Household poverty remains a persistent challenge in Brazil, with far-reaching social and economic consequences. To address this issue effectively, it is essential to identify the factors that contribute to poverty among households, particularly those led by individuals who are the primary income earners. These households often face unique economic and social challenges that demand targeted interventions. To analyze household poverty determinants, this study utilizes data from the "Pesquisa Nacional por Amostras de Domicílios Contínua" (Continuous National Household Sample Survey) (PNADC). The dataset provides comprehensive information on the individual characteristics of the household head and household-level attributes, offering a nuanced view of the factors at play. A probit model is employed to estimate the probability of a household head experiencing poverty, allowing for a examination of various factors. The research findings reveal several significant determinants of household poverty in Brazil. Firstly, households led by men are found to be less likely to be in a situation of poverty, shedding light on gender-related disparities in income and opportunities. Secondly, households with heads who have attained higher levels of education exhibit a lower probability of being in poverty, underscoring the importance of education as a pathway out of poverty. Moreover, urban households are found to be less prone to poverty compared to their rural counterparts, since households led by individuals who work in agricultural-related activities are more likely to experience poverty. This emphasizes the need for targeted rural development strategies. Additionally, households located in the North and Northeast regions of Brazil face a higher likelihood of poverty, possibly due to regional economic disparities that require specific policy attention. These findings have important policy implications for poverty alleviation efforts in Brazil. Policymakers should consider targeted interventions that focus on improving access to education, particularly in regions with higher poverty rates, as education is a powerful tool for poverty reduction. Efforts to promote gender equality and enhance economic opportunities in rural areas are also essential to address the diverse causes of poverty. Additionally, regional disparities in poverty should be addressed through comprehensive regional development initiatives that take into account the unique challenges faced by different areas of the country. Our results also highlight the importance of community-specific social programs, including conditional-cash transfers and incentives for childhood education, which can play a pivotal role in breaking the cycle of poverty in Brazil's diverse communities.