IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/113538.html
   My bibliography  Save this paper

Social spending and income inequality in Latin America. A panel data approach

Author

Listed:
  • Quinonez, Pablo

Abstract

The relationship between social policy and inequality has often been contentious in Latin America. In this context, this article analysed the relationship between social spending and income inequality in the region in the short, medium, and long run. For this purpose, data on 16 Latin American countries between the period 1990-2017 was gathered and analysed through a panel data study. The results showed that, in line with the findings at a global level, increased levels of overall social spending are indeed associated with reduced levels of income inequality in this region. However, each one of the four main areas of social spending were observed to have different effects on income inequality. Additionally, the results showed that, despite the reforms and the increases in budgets, the social protection and social services systems still have problems reaching those at the bottom of the income distribution in the region.

Suggested Citation

  • Quinonez, Pablo, 2022. "Social spending and income inequality in Latin America. A panel data approach," MPRA Paper 113538, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:113538
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/113538/1/MPRA_paper_113538.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Katzman, Rubén, 2011. "Infancia en América Latina: Privaciones habitacionales y desarrollo de capital humano," Documentos de Proyectos 3915, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. José De Gregorio & Jong–Wha Lee, 2002. "Education and Income Inequality: New Evidence From Cross‐Country Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 395-416, September.
    3. Albanesi, Stefania, 2007. "Inflation and inequality," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1088-1114, May.
    4. Lustig, Nora, 2017. "El impacto del sistema tributario y el gasto social en la distribución del ingreso y la pobreza en América Latina. Una aplicación del marco metodológico del proyecto Compromiso con la Equidad (CEQ)," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(335), pages .493-568, julio-sep.
    5. Viviane M. R. Azevedo & Cesar P. Bouillon, 2010. "Intergenerational Social Mobility in Latin America: A review of existing evidence," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 25(2), pages 7-42, Diciembre.
    6. Krieger, J. & Higgins, D.L., 2002. "Housing and health: Time again for public health action," American Journal of Public Health, American Public Health Association, vol. 92(5), pages 758-768.
    7. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    8. Ocampo, José Antonio & Gómez-Arteaga, Natalie, 2017. "Los sistemas de protección social, la redistribución y el crecimiento en América Latina," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    9. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    10. Alberto Chong, 2004. "Inequality, Democracy, and Persistence: Is There a Political Kuznets Curve?," Economics and Politics, Wiley Blackwell, vol. 16(2), pages 189-212, July.
    11. Gerardo Angeles-Castro, 2006. "The Effects of Economic Liberalization on Income Distribution: A Panel-Data Analysis," Palgrave Macmillan Books, in: Eckhard Hein & Arne Heise & Achim Truger (ed.), Wages, Employment, Distribution and Growth, chapter 7, pages 151-180, Palgrave Macmillan.
    12. Joseph E. Stiglitz, 1973. "Education and Inequality," The ANNALS of the American Academy of Political and Social Science, , vol. 409(1), pages 135-145, September.
    13. Alan Gilbert, 2001. "Housing in Latin America," IDB Publications (Working Papers) 80283, Inter-American Development Bank.
    14. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    15. Judith Niehues, 2010. "Social Spending Generosity and Income Inequality: A Dynamic Panel Approach," SOEPpapers on Multidisciplinary Panel Data Research 336, DIW Berlin, The German Socio-Economic Panel (SOEP).
    16. Knight, J B & Sabot, R H, 1983. "Educational Expansion and the Kuznets Effect," American Economic Review, American Economic Association, vol. 73(5), pages 1132-1136, December.
    17. Wojciech W. Charemza & Derek F. Deadman, 1997. "New Directions In Econometric Practice, Second Edition," Books, Edward Elgar Publishing, number 1139.
    18. Monica Ospina, 2009. "The effect of social spending on income inequality:An analysis for Latin American countries," Documentos de Trabajo de Valor Público 10620, Universidad EAFIT.
    19. repec:idb:brikps:publication-detail,7101.html?id=68495 is not listed on IDEAS
    20. Niehues, Judith, 2010. "Social Spending Generosity and Income Inequality: A Dynamic Panel Approach," IZA Discussion Papers 5178, Institute of Labor Economics (IZA).
    21. Santiago Levy & Norbert Schady, 2013. "Latin America's Social Policy Challenge: Education, Social Insurance, Redistribution," Journal of Economic Perspectives, American Economic Association, vol. 27(2), pages 193-218, Spring.
    22. Era Dabla-Norris & Kalpana Kochhar & Nujin Suphaphiphat & Franto Ricka & Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality; A Global Perspective," IMF Staff Discussion Notes 15/13, International Monetary Fund.
    23. Joakim Palme & Walter Korpi, 1998. "The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality and Poverty in the Western Countries," LIS Working papers 174, LIS Cross-National Data Center in Luxembourg.
    24. Ms. Era Dabla-Norris & Ms. Kalpana Kochhar & Mrs. Nujin Suphaphiphat & Mr. Franto Ricka & Ms. Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality: A Global Perspective," IMF Staff Discussion Notes 2015/013, International Monetary Fund.
    25. repec:idb:brikps:41798 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abdulaleem Isiaka & Alexander Mihailov & Giovanni Razzi, 2022. "Reallocating Government Spending to Reduce Income Inequality: Panel Data Evidence from the Middle-Income Countries," Economics Discussion Papers em-dp2022-08, Department of Economics, University of Reading.
    2. Peter Mikek, 2023. "Financial deepening and income inequality: is there a financial Kuznetz curve in Latin America?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 13(1), pages 103-125, March.
    3. Chu, Lan Khanh & Hoang, Dung Phuong, 2020. "How does economic complexity influence income inequality? New evidence from international data," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 44-57.
    4. Tingyun Chen & Jean-Jacques Hallaert & Alexander Pitt & Haonan Qu & Maximilien Queyranne & Alaina Rhee & Anna Shabunina & Jérôme Vandenbussche & Irene Yackovlev, 2018. "Inequality and Poverty across Generations in the European Union," IMF Staff Discussion Notes 18/01, International Monetary Fund.
    5. Djeneba Doumbia & Mr. Tidiane Kinda, 2019. "Reallocating Public Spending to Reduce Income Inequality: Can It Work?," IMF Working Papers 2019/188, International Monetary Fund.
    6. Deven Bansod & Geetilaxmi Mohapatra & A. K. Giri, 2017. "Fiscal Policy, Economic Growth and Income Inequality: A Case of Indian Economy," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 20(63), pages 72-88, March.
    7. Farhad Taghizadeh‐Hesary & Naoyuki Yoshino & Sayoko Shimizu, 2020. "The impact of monetary and tax policy on income inequality in Japan," The World Economy, Wiley Blackwell, vol. 43(10), pages 2600-2621, October.
    8. Mónica Patricia Ospina, 2014. "El efecto del gasto social en la distribución del ingreso: un análisis para economías latinoamericanas," Revista Ciencias Estratégicas, Universidad Pontificia Bolivariana, December.
    9. Gnangnon, Sèna Kimm, 2023. "Export Product Quality and Inclusivity in Developing Countries," EconStor Preprints 274651, ZBW - Leibniz Information Centre for Economics.
    10. Jianu, Ionut & Gavril, Ioana Andrada & Iacob, Silvia Elena & Hrebenciuc, Andrei, 2021. "Income Inequalities and their Social Determinants: an Analysis over Developed vs. Developing EU Member States," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55(2), pages 125-142.
    11. Christopher Hartwell, 2022. "Institutions and trade‐related inequality," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3246-3264, July.
    12. Pablo García S. & Camilo Pérez N., 2017. "Desigualdad, inflación, ciclos y crisis en Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 44(2 Year 20), pages 185-221, December.
    13. Fabio Clementi & Mauro Gallegati & Lisa Gianmoena & Simone Landini & Joseph E. Stiglitz, 2019. "Mis-measurement of inequality: a critical reflection and new insights," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 14(4), pages 891-921, December.
    14. Dirk Bezemer & Anna Samarina, 2019. "Debt shift, financial development and income inequality," DNB Working Papers 646, Netherlands Central Bank, Research Department.
    15. Daranrat Jaitiang & Wen-Chi Huang & Shang-Ho Yang, 2021. "Does Income Inequality Exist among Urban Farmers? A Demonstration of Lorenz Curves from Northern Thailand," Sustainability, MDPI, vol. 13(9), pages 1-16, May.
    16. Abebe Hailemariam & Tutsirai Sakutukwa & Ratbek Dzhumashev, 2021. "Long-term determinants of income inequality: evidence from panel data over 1870–2016," Empirical Economics, Springer, vol. 61(4), pages 1935-1958, October.
    17. Bucevska Vesna, 2019. "Determinants of Income Inequality in EU Candidate Countries: A Panel Analysis," Economic Themes, Sciendo, vol. 57(4), pages 397-413, December.
    18. Umut Uzar, 2023. "Income Inequality, Institutions, and Freedom of the Press: Potential Mechanisms and Evidence," Sustainability, MDPI, vol. 15(17), pages 1-23, August.
    19. Izaskun Zuazu, 2022. "Electoral systems and income inequality: a tale of political equality," Empirical Economics, Springer, vol. 63(2), pages 793-819, August.
    20. Johnson Worlanyo Ahiadorme, 2022. "Monetary policy transmission and income inequality in Sub-Saharan Africa," Economic Change and Restructuring, Springer, vol. 55(3), pages 1555-1585, August.

    More about this item

    Keywords

    Latin America; social spending; income inequality; panel data; social policy;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I0 - Health, Education, and Welfare - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:113538. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.