Nº 21 (April, 2005). Matías Busso, Federico Cerimedo & Martín Cicowiez. 

Why did poverty increase in Argentina 36 percentage points during the last decade? Moreover, how should this proportion be reduced? This paper seeks answers to these questions by constructing counterfactual scenarios. First, we carry out a decomposition to separate the evolution of poverty into growth and distributive components. We find that both greater inequality and falling real income are important in explaining the increase in poverty during the last decade. However, the importance of each factor differs when analyzing sub-periods. To answer the second question, we compute isopoverty curves. This methodology allows estimating different combinations of growth and inequality reduction which are compatible with objective poverty levels.