POVERTY IN MEXICO DURING ADJUSTMENT

The paper analyzes the changes in poverty in Mexico during the 1980s adjustment program. We decompose poverty into its distribution and growth components, as well as by population subgroups, in order to illustrate the causes of the deterioration in the standard of living of the poorest of the poor. We suggest a transformation of the methodology by Datt and Ravallion (1992), to determine the likelihood of future compensation for those sectors of the population which suffered higher social costs derived from the contractionary policies. The importance of this exercise, is that it shows that contractionary measures may provoke deep structural transformations in an economy, which can make it more difficult to eradicate poverty in a reasonable time horizon.