Simulating Income Distribution Changes in Bolivia: a Microeconometric Approach
AbstractThis paper uses microeconometric simulations to characterize the distributional changes occurred in the Bolivian economy in the period 1993-2002, and to assess the potential distributional impact of various alternative economic scenarios for the next decade. Wage equations for urban and rural areas estimated by both OLS and quantile regression are the main inputs for the microsimulations. A sizeable increase in the dispersion in worker unobserved wage determinants is the main factor behind the significant increase in household income inequality in the 90s. The results of the microsimulations suggest a small poverty-reducing effect of several potential scenarios, including education upgrading, sectoral transformations, labor informality reduction, gender and race wage gap closing, and changes in the structure of the returns to education. Sustainable and vigorous productivity growth seems to be a necessary condition for Bolivia to meet the poverty Millennium Development Goal by 2015.
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Bibliographic InfoPaper provided by CEDLAS, Universidad Nacional de La Plata in its series CEDLAS, Working Papers with number 0012.
Length: 61 pages
Date of creation: Aug 2004
Date of revision:
distribution; Bolivia; wages; decompositions; quantile; education; MDG;
Find related papers by JEL classification:
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-06 (All new papers)
- NEP-CMP-2006-05-06 (Computational Economics)
- NEP-EDU-2006-05-06 (Education)
- NEP-LAM-2006-05-06 (Central & South America)
- NEP-LTV-2006-05-06 (Unemployment, Inequality & Poverty)
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