Abstract

This article examines the evolution of poverty in Chile during 1990-96, a period of rapid economic growth. It shows that Chile has embarked on a significant poverty-reduction trajectory. The robustness of this result is examined by using nonparametric estimates of the income distribution and a stochastic dominance test. Growth is an important factor in explaining the poverty reduction that has occured. Using the Datt-Ravallion decomposition, it accounts for over 85% of poverty reduction at the national level. However, the pattern varies significantly across regions. Both growth, and its contribution to poverty reduction, vary significantly among regions. This seems to reflect the sectoral composition of growth across regions, with export-oriented activities producing a larger poverty-reduction impact.