Background
� The commitment to equity years of interest in the case of Venezuela coincide with the governmental period of Hugo Chavez Frias.
� Social and fiscal policies can be characterized by two phases: � The first phase, covering the period between 1999 and
mid-2003, shows the predominance of previous social policy along with some attempts at social reforms.
� The second phase (2003-the present) is characterized by the gradual abandon of the previous social policies and the arrival of “the missions”.
� This second phase is characterized by � An increase in social expenditure that reached, in some of
these years, the highest levels in the history of Venezuelan public finances, in real terms.
� The increase in school enrollment continues, although more slowly in the Primary and Secondary Sectors, while steadily increasing in the Tertiary sector.
� Spending on non contributory retirement pensions continues to increase, becoming the main objective of the mission “Amor Mayor” (Love towards the Elderly)
� The social “missions” are established, becoming a political success, although with debatable results, especially since 2007, when several of them disappeared, revealing problems in the efficiency of their implementation.
� This second phase can be divided into three periods: � 2003-2006/7: the period of highest social spending ,
particularly on the missions. � 2007-2010: a period of deceleration in social expenditure and
a weakening of many of the first missions (at one stage there were more than 40 missions running throughout the country).
� 2011-2012: a period of partial reinvestment in the social sector, but emphasizing new programs.
� It is debated whether the marked reduction in poverty is attributable to the missions or to the accelerated increase in the real income of the poorer sectors, particularly between 2004-2008, and the increase of the employment figures, especially in the public sector.
� Undoubtedly the Commitment To Equity project will play a key role in clarifying these issues.
Venezuela: Real Social Expenditure pc
Central Gov. , General Gov. , GG + Autonomous Inst (PDVSA, FONDEN)
Bene
ficiar
ios
Grandes misiones, Enero 2013
736.540
521.618
346.798
122.000
Hijos de Venezuela Amor Mayor Vivienda Venezuela Saber y Trabajo
Beneficiarios por Hogar Beneficiarios Beneficiados Año 2012
Bene
ficia
rios
Misiones en el área de salud, 2012 !!!
594.409.904 !!!!!!!
18.529.964 !
4.939.422 !!
1.072.573 !!416.569
!!!!!!!!!!!!!!!!
Misión Barrio Adentro (Consultas Atendidas)
Misión Niño Jesús (Beneficiarias)
Misión Sonrisa (Consultas Realizadas)
Misión Milagro (Consultas realizadas)
Misión Barrio Adentro Deportivo (Beneficiarios)
!
Bene
ficia
rios
Misiones educativas, 2012 !
!!
12.817.536 !!!!!!!!!!!!
1.756.250 !
!!!
789.436 822.853 !!!!!!!
212.352 !!
23 !!!
Misión Robinson I (Patriotas)
Misión Robinson II (Patriotas)
Misión Ribas (vencedores)
Misión Sucre (Graduados)
Misión Alma Mater (Universidades)
Misión Cultura Corazón Adentro
(Activadores) !!Fuente: Segunda Vicepresidencia para el Área Social
Bene
ficiar
ios
Misiones en protección social, 2012 !!
17.554.222 !!
6.258.797 !!!!!!!
82.557
!
252.176 336.490
!!!!!!!!!!!!!
39 !!!!!!!!
Misión Alimentación (Beneficiarios)
Misión Madres del Barrio
(Beneficiadas)
Misión Negra Hipólita (Centros de
Atención)
Misión Guaicaipuro (Indígenas Atendidos)
Misión Niños y Niñas del Barrio
(Atendidos)
Misión Dr. José G. Hernández
(Discapacidad) !
Poverty and Inequality
CTE Venezuela: The Surveys � We use the Venezuelan National Household Survey,
ENHM (Third quarter of 2012), and a special module called “Sistema de Indicadores de Coyuntura, SIC”, (Short term System of Indicators) as the main source of our data.
� It is the first time that the SIC survey has been carried out. The survey focuses on: � Subjective Poverty � Use of Health Services (Types and frequency of use,
satisfaction with the service, etc) � Missions: Enrollment and direct transfers (yes/no) � Internet use � Social participation/envolvement
Scope and Limitations � The surveys have a National coverage at state level. � The ENHM Survey is an income survey. There are no
recent consumption surveys. This means that Consumption PPP dollars are not available. This also raises problems with post fiscal estimations.
� The survey lacks a question on the public or private nature of the school attended.
� The survey does have data on rents, direct transfers, pensions, several work benefits and the amounts assigned to these benefits.
� To summarize, at the moment we only provide estimates for: market, net market, disposable and final incomes.
Constructing the Income � We used simulation of tax rules to impute direct
income taxes. � Payroll taxes are not declared in the survey. We
grossed up the market income. � Housing rent is declared in the survey. In order to
impute the value of owner/occupied housing we used survey-adjusted regression on log household income, log rent, type of dwelling and a quality of housing index.
� There are issues with the estimation of indirect taxes (VAT). This tax represents more than 50% of the non-oil related income.
Inequality: Benchmark Case
Ve ne zue la
Market Income
Net Market Income
Disposable Income
Post-fiscal Income
Final Income
Gini 0.392 0.388 0.382 0.360% change wrt market income -0.4% -0.9% -3.2%Significance (p-value) 0.000 0.000 0.000% change wrt net market income -0.6% -2.9%Significance (p-value) 0.000 0.000Theil Index 0.267 0.260 0.252 0.224% change wrt market income -0.7% -1.5% -4.4%Significance (p-value) 0.000 0.000 0.000% change wrt net market income -0.8% -3.6%Significance (p-value) 0.000 0.00090/10 6.592 6.540 6.305 5.379% change wrt market income -5.2% -28.7% -121.3%Significance (p-value) 0.003 0.000 0.000% change wrt net market income -23.5% -116.1%Significance (p-value) 0.000 0.000
Inequality: Sensitivity Analysis 1
Ve ne zue la
Market Income
Net Market Income
Disposable Income
Post-fiscal Income
Final Income
Gini 0.400 0.396 0.382 0.360% change wrt market income -0.4% -1.8% -4.0%Significance (p-value) 0.000 0.000 0.000% change wrt net market income -1.3% -3.6%Significance (p-value) 0.000 0.000Theil Index 0.280 0.271 0.252 0.224% change wrt market income -0.9% -2.8% -5.7%Significance (p-value) 0.000 0.000 0.000% change wrt net market income -1.9% -4.8%Significance (p-value) 0.000 0.00090/10 7.189 7.052 6.305 5.379% change wrt market income -13.7% -88.4% -181.0%Significance (p-value) 0.000 0.000 0.000% change wrt net market income -74.7% -167.3%Significance (p-value) 0.000 0.000
Lorenz Curves
Concentration Curves
Rent Imputation
139.9222 Otro tipo 287.8333 Rancho campesino 300 310.2108 Vivienda Rustica o Rancho 300 875.8202 644.1703 492.1154 Casa de vecindad 800 600 450 904.1479 973.6826 588.8601Apartamento en quinta o casa-quinta 1000 1000 600 1038.535 139.9222 710.8816 Apartamento en edificio 1400 600 664.2298 480.1106 468.265 Casa 800 500 550 819.7939 Quinta o casa quinta 1000 Tipo de Vivienda Buena Regular Mala Calidad de la vivienda
. table tipviv caliviv [fwei= pesoh], c(med alquiler med alq_imp3)