Gross Domestic Product and Poverty Rate vs. Social Spending

The Evolution of a Relationship between Nation, Provinces and the Province of La Rioja, 2011-2021

Abstract

Argentina has had a high Poverty Rate for several decades, due to a low growth of the Gross Domestic Product in the long term. The existence of the Poverty Rate requires, in addition to macro and microeconomic policies, a social policy that tries to mitigate the problem in the short term, acting in a countercyclical way. In other words, when the GDP falls and the Poverty Rate rises, the State should increase Social Spending, that of income compensation for low-income families. This paper analyzes the cyclical behavior of Social Spending at the level of certain social functions, in relation to the cycle of GDP and the Poverty Rate, for the national, provincial and provincial governments of La Rioja, in the period 2011 - 2021. The objective is to calculate the existence of a relationship, by means of contemporaneous and lagged linear correlation. Finally, the results show that at the national level there is no relationship between the Poverty Rate and GDP. At the provincial level, there is a positive relationship between the Poverty Rate and Spending on Labor Programs, and for the province of La Rioja, a negative relationship between the Poverty Rate and Spending on Social Promotion and Assistance.