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Abstract

Between 2000 and 2010, the Gini coefficient declined in 13 of 17 Latin American countries. The decline was statistically significant and robust to changes in the time interval, inequality measures, and data sources. In-depth country studies for Argentina, Brazil, and Mexico suggest two main phenomena underlie this trend: a fall in the premium to skilled labor and more progressive government transfers. The fall in the premium to skills resulted from a combination of supply, demand, and institutional factors. Their relative importance depends on the country

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File URL: http://www.cgdev.org/files/1426568_file_Lustig_et_al_IneqLA_FINAL.pdf
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Bibliographic Info

Paper provided by Center for Global Development in its series Working Papers with number 307.

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Length: 32 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:cgd:wpaper:307

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Web page: http://www.cgdev.org

Related research

Keywords: income inequality; skill premium; government;

Other versions of this item:

Find related papers by JEL classification:

• D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
• I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
• H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
• O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
• O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

References

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1. Guillermo Cruces & Carolina García Domench & Leonardo Gasparini, 2012. "Inequality in Education: Evidence for Latin America," CEDLAS, Working Papers 0135, CEDLAS, Universidad Nacional de La Plata.
   
   • Cruces, Guillermo & Gasparini, Leonardo, 2011. "Inequality in Education: Evidence for Latin America," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
2. Lawrence F. Katz & Kevin M. Murphy, 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," NBER Working Papers 3927, National Bureau of Economic Research, Inc.
   
   • Katz, Lawrence F & Murphy, Kevin M, 1992. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 35-78, February.
   • Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
3. Marco Manacorda & Carolina Sánchez-Páramo & Norbert Schady, 2010. "Changes in Returns to Education in Latin America: The Role of Demand and Supply of Skills," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(2), pages 307-326, January.
   
   • Marco Manacorda & Carolina Sanchez-Paramo & Norbert Schady, 2005. "Changes in Returns to Education in Latin America: the Role of Demand and Supply of Skills," CEP Discussion Papers dp0712, Centre for Economic Performance, LSE.
4. Mariano Bosch & Marco Manacorda, 2010. "Minimum Wages and Earnings Inequality in Urban Mexico," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 128-49, October.
   
   • Bosch, Mariano & Manacorda, Marco, 2010. "Minimum Wages and Earnings Inequality in Urban Mexico," CEPR Discussion Papers 7882, C.E.P.R. Discussion Papers.
5. Gasparini, Leonardo & Galiani, Sebastian & Cruces, Guillermo & Acosta, Pablo, 2011. "Educational upgrading and returns to skills in Latin America : evidence from a supply-demand framework, 1990-2010," Policy Research Working Paper Series 5921, The World Bank.
   
   • Leonardo Gasparini & Sebastián Galiani & Guillermo Cruces & Pablo Acosta, 2012. "Educational Upgrading and Returns to Skills in Latin America. Evidence from a Supply-Demand Framework, 1990-2010," CEDLAS, Working Papers 0127, CEDLAS, Universidad Nacional de La Plata.
   • Gasparini, Leonardo & Galiani, Sebastián & Cruces, Guillermo & Acosta, Pablo A., 2011. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990-2010," IZA Discussion Papers 6244, Institute for the Study of Labor (IZA).
6. Raymundo Campos & Gerardo Esquivel & Nora Lustig, 2012. "The Rise and Fall of Income Inequality in Mexico, 1989–2010," Working Papers 267, ECINEQ, Society for the Study of Economic Inequality.
   
   • Raymundo M. Campos-Vazquez & Gerardo Esquivel & Nora Lustig, 2012. "The Rise and Fall of Income Inequality in Mexico: 1989-2010," Serie documentos de trabajo del Centro de Estudios Económicos 2012-04, El Colegio de México, Centro de Estudios Económicos.
   • Raymundo Campos & Gerado Esquivel & Nora Lustig, 2012. "The Rise and Fall of Income Inequality in Mexico, 1989-2010," Working Papers 1201, Tulane University, Department of Economics.
   • Campos, Raymundo & Esquivel, Gerardo & Lustig, Nora, 2012. "The Rise and Fall of Income Inequality in Mexico, 1989.2010," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
7. Ariel Fiszbein & Norbert Schady & Francisco H. G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597, September.
8. Giovanni Andrea cornia, 2009. "Income Distribution under Latin America’s New Left Regimes," Working Papers Series wp2009_16.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze dell'Economia e Dell'Impresa.
   
   • Giovanni Andrea Cornia, 2010. "Income Distribution under Latin America's New Left Regimes," Journal of Human Development and Capabilities, Taylor and Francis Journals, vol. 11(1), pages 85-114.
9. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
10. José Antonio Ocampo & Juliana Vallejo, 2012. "Economic Growth, Equity and Human Development in Latin America," Journal of Human Development and Capabilities, Taylor and Francis Journals, vol. 13(1), pages 107-133, February.
11. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June.
12. Guillermo Cruces & Leonardo Gasparini, 2008. "A Distribution in Motion: The Case of Argentina," CEDLAS, Working Papers 0078, CEDLAS, Universidad Nacional de La Plata.
13. Leonardo Gasparini & Guillermo Cruces & Leopoldo Tornarolli & Mariana Marchionni, 2009. "A Turning Point? Recent Developments on Inequality in Latin America and the Caribbean," CEDLAS, Working Papers 0081, CEDLAS, Universidad Nacional de La Plata.
14. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.

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