Colombia - Poverty report (Vol. 2) : Background report

Report No. 24524-CO Colombia Poverty Report (In Two Volumes) Volume ll: Background Report November 1, 2002 Colombia Country Management Unit PREM Sector Management Unit Latin America and the Caribbean Region Document of the World Bank  CURRENCY EQUIVALENTS (as of October 21, 2ID2) Currency Unit = IPeso (Coll$) Col$1 = US$ 0.000351 US$1 = Col$ 2876.400 WEIGHTS AND MEASURES Metric System IFISCAL YEAR January 1 to December 3 i ABBREVIATIONS AND ACRONYMS ARS Administradoras de Regimen Subsidiado CAIP Centros de Atenci6n Integral al Preescolar CASEN Caracterizaci6n Socioecon6mica Nacional CDF Comprehensive Development Framework CODHES Consultoria para los Derechos Humanos y el Desplazamiento DALYS Disability-Adjusted Life Years DHS Demographic and Health Survey DNP Departamento Nacional de Planeaci6n ECV Encuesta de Calidad de Vida ENH Encuesta Nacional de Hogares FGT Foster-Greer-Thorbecke index GDP Gross Domestic Product GNP Gross National Product HCB Hogares Comunitarios de Bienestar ICBF Instituto Colombiano de Bienestar Familiar ICETEX Instituto Colombiano de Credito Educativo y Estudios Tecnicos en el Exterior ICFES Instituto Colombiano para el Fomento de la Educaci6n Superior IDP Internally Displaced Populations IDB Inter-American Development Bank INURBE Instituto Nacional de Vivienda de Interes Social y Reforma Urbana ISS Instituto de Seguros Sociales LSMS Living Standards Measurements Study NHS National Household Surveys PACES Programa de Ampliaci6n de la Cobertura de Educaci6n Secundaria POS Plan Obligatorio de Salud POSS Plan Obligatorio de Salud Subsidiado PPP Purchasing Power Parity PSE Public Social Expenditure SCD SISBEN classification document SENA Servicio Nacional de Aprendizaje SISBEN Sistema de Selecci6n de Beneficiarios UNDCP United Nations Development Program for Drug Control and Crime Prevention UNDP United Nations Development Program UPAC Unidad de Poder Adquisitivo Constante VAT Value Added Tax UVR Unidad de Valor Real Vice President: David de Ferranti Director: Olivier Lafourcade Lead Economist: Marcelo Giugale Sector Manager: Norman Hicks Task Manager: Carlos Eduardo V6lez  TABLE OF CONTENTS Part 1. How are the poor doing and why? Chapter 1. Two Decades of Economic and Social Development in Urban Colombia: A Mixed Outcome 1. Introduction ........................................................................2 * Adverse macro environment in the late nineties: recession and risk deterioration * Supply shocks and multiple structural changes * Objective and mainfindings * Opposing trends in social development and crime intensity indicators 2. Social Progress in Urban Colombia . .......................................................................6 2.1 Schooling and education: increasing trend with pro-cyclical fluctuations 2.2 Child labor: pro-cyclical with a decreasing trend 2.3 Child malnutrition and infant mortality: continuous improvement 2.4 Access to basic infrastructure: progressive gains with regional disparities 2.5 Life expectancy: advancing with gender bias 2.6 Violence: continuous deterioration since the 1970s 3. Economic Welfare, Income Distribution and Poverty: Are Urban Colombians Better-Off Than Two Decades Ago? .............................................. 13 3.1 Poverty Measures: substantial long-term progress with a recent set back 3.2 Average household income per capita 3.3 Welfare as average income corrected by inequality: The Gini coefficient and the Sen Welfare Index * The evolution of income inequality * Adjustingfor inequality along the lifecycle: the Paglin-Gini index * Average income corrected by inequality: the Sen Welfare Index 3.4 Welfare comparisons for any distributional weights: First Order and Generalized Lorenz Dominance 4. Poverty Profile: Faces of the Poor - Vulnerable Groups and Household Characteristics ....... ....... 28 4.1 Basic factors of income per capita generation: the poor versus the non- poor * From basic income generatingfactors to the faces of the poor 4.2 Faces of the poor: groups at risk and household characteristics 4.3 The poverty profile and the marginal effect of key household characteristics * Skill endowment * Demographics * Labor Market * Homeownership * Idiosyncratic shocks 4.4 Unemployment by skill, age and region  STRUCTURE (F VOLUME R1R Part 1. 1H1ow are the poor doing and why? Chapter 1. Two Decades of Econonmc and Social Development in Urban CoRombia: A Mixed Outcome By Carlos Eduardo Velez, Mauricio Santamarfa, Natalia Millan and Benedicte de la Briere Chapter 2. Poverty and Welfare in Rura Colombia Duruing the Last Two Decades By Carlos Eduardo Velez, Benedicte de la Briere and Natalia Millan Chapter 3. The Reversal of Ilinequality Trends in CoRombin, a970-4995: A Combination of Persistent and IFluctuating Forces By Carlos Eduardo V6lez, Jose Leibovich, Adriana Kuigler, Cesar Bouill6n and Jairo Nuifiez Chapter 4. Who Bears the Burden of Crnime and Violence in Colombia? By Alejandro Gaviria Part Ifl. What is government doing for the poor? Chapter S. Public Social Expenditure in Colombia: lincidence and Sector Priorities in the 1990s By Carlos Eduardo Velez and Vivien Foster Chapteir 6 Subsidized Health JInsurance, SI[SBEN and Demand for HeaRth Ca