The impact of economic growth on the quality of rural families’ life in Paraguay

Abstract

The subject of study of this research is the analysis of the impact of economic growth on the quality of rural families’ life in Paraguay. The methodology used was the one developed by Ravallion-Chen, which is to measure the magnitude to which different segments of the population participate in the process of economic growth in a country, through the growth incidence curves. Taking into account the good economic performance of Paraguay in the last decade, with an economy grew at an average of 5%, a level of growth higher than that of its neighbors, an analysis was pursued to know if this meant an improvement in the rural area families’ life, using the per capita income as an indicator. Empirical evidence is offered about the economic growth model of Paraguay and its implications for the rural sector population. Also, the evolution in terms of non-monetary indicators use to develop the Quality of Life Index is highlighted. Applying the Ravallion-Chen model, the results obtained from this analysis showed that periods of economic growth are followed by an improvement in per capita income in the rural area, noticing in turn a decreasing trend in the curve, which suggests an equalizing growth, taking into account that for the period studied an average GDP growth of 4.79% was obtained, which translated into a growth of 3.5% for the lowest decile and of 1.28% for the richest decile. However, by performing a more critical analysis throughout the study period, it could be noted that in situations such as the rise in food price levels or fluctuations in the price of commodities, the lowest percentiles are more exposed than those in the richest percentiles. This is due to factors such as the high dependence of the agricultural sector on high volatility products, which is characterized by the country's rural model.

Keywords

• life quality
• economic growth
• rural area