Impact of non-agricultural income in FGT poverty indexes for Pernambucan rural families

Abstract

The high incidence of poverty and the great imbalances in socioeconomic conditions of individuals residing in rural areas of the states of the Northeast, are the subject of study when it seeks to understand the different geographical dynamics of Brazilian economic development. From the 90s, even the positive developments in the economic performance of the country and the great economic transformations that have occurred in the last two decades, it was observed that the progress in reducing social problems in the rural Northeast were much lower than the other regions. The objective is to show the effects of non-agricultural incomes of the Foster-Greer-Thorbecke poverty indices (FGT) for rural households in the state of Pernambuco using the propensity score matching methodology (PSM). According to the observed results, the average impact of non-farm incomes on agricultural exclusively to R$ 177.93 and R$ 180.40 for the two pairing methods used; the proportion of poor fell more than 24 percentage points; the poverty gap is reduced on average by 27 percentage points and the severity of poverty decreases more than 22 percentage points.