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The decline in inequality in Latin America: How much, since when and why

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  • Nora Lustig

    () (Tulane University and Center for Global Development)

  • Luis Felipe Lopez-Calva

    () (World Bank)

  • Eduardo Ortiz-Juarez

    () (RBLAC-UNDP)

Abstract

Between 2000 and 2009, the Gini coefficient declined in 13 of 17 Latin American countries for which comparable data exist. 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, Mexico and Peru suggest that there are two phenomena which underlie this trend: (i) a fall in the premium to skilled labor (as measured by returns to education); and (ii) higher and more progressive government transfers. The fall in the premium to skills results from a combination of supply and demand factors and, in Argentina—and to a lesser extent in Brazil--, from more active labor market policies as well.

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Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 211.

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Length: 22 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2011-211

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Keywords: Income inequality; wage gap; government transfers; Latin America.;

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References

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  1. Ricardo Paes de Barros & Francisco H. G. Ferreira & Jose R. Molinas Vega & Jaime Saavedra Chanduvi, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2580, 5.
  2. 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.
  3. Ferreira, Francisco H.G. & Ravallion, Martin, 2008. "Global poverty and inequality : a review of the evidence," Policy Research Working Paper Series 4623, The World Bank.
  4. Stark, Oded & Taylor, J Edward & Yitzhaki, Shlomo, 1986. "Remittances and Inequality," Economic Journal, Royal Economic Society, vol. 96(383), pages 722-40, September.
  5. Ferreira, Francisco H.G. & Leite, Phillippe G. & Wai-Poi, Matthew, 2007. "Trade Liberalization, Employment Flows and Wage Inequality in Brazil," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  6. Guillermo Cruces & Leonardo Gasparini, 2008. "A Distribution in Motion: The Case of Argentina," CEDLAS, Working Papers 0078, CEDLAS, Universidad Nacional de La Plata.
  7. 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.
  8. Fisher,Franklin M., 2005. "Microeconomics," Cambridge Books, Cambridge University Press, number 9780521023290.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The Decline in Inequality in Latin America: How Much, Since When and Why
    by maximorossi in NEP-LTV blog on 2011-05-16 14:32:20
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Cited by:
  1. Nathalie Chusseau & Joel Hellier, . "Inequality in emerging countries," Working Papers 256, ECINEQ, Society for the Study of Economic Inequality.
  2. Kanbur, Ravi, 2012. "Does Kuznets Still Matter?," Working Papers 128794, Cornell University, Department of Applied Economics and Management.
  3. Azevedo, Joao Pedro & Davalos, Maria Eugenia & Diaz-Bonilla, Carolina & Atuesta, Bernardo & Castaneda, Raul Andres, 2013. "Fifteen years of inequality in Latin America : how have labor markets helped ?," Policy Research Working Paper Series 6384, The World Bank.
  4. González, Mariano & Larrú, José María, 2012. "Egalitarian aid. The impact of aid on Latin American inequality," MPRA Paper 41660, University Library of Munich, Germany.

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