Functional Inequality in Latin America: News from the Twentieth Century

This paper presents a new consistent yearly series of gross income (between-group) inequality Ginis for four occupational categories in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela over the period 1900-2011 using a newly assembled wage dataset. The approach used differentiates labour by skill level and allows for changing allocation of the labour force over time. Profits and rents are calculated as a residual. Our regional Gini shows a changing secular process with a reclined "S" shape with an inflection point around 1940 and a peak in the 1990s. There are mixed country trends in the early and middle decades, but in most cases inequality was on the rise in the 1960s. There was also a tendency for narrowing wage inequality in the middle decades of the last century - at the time of the Great Levelling in the developed economies - but whose impact was more than off-set by a rising share of the top group. Inequality in the 20th century is a story of increased polarisation - particularly post 1970 - amid significant social mobility.