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Inequality in Latin America : determinants and consequences

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  • Lopez , J. Humberto
  • Perry, Guillermo

Abstract

Latin America is together with Sub-Saharan Africa the most unequal region of the world. This paper documents recent inequality trends in the Latin American region, going beyond traditional measures of income inequality. The paper also reviews some of the explanations that have been put forward to understand the current situation, and discusses why reducing income inequality should be an important policy priority. In particular, the authors discuss channels through which inequality can affect growth and output volatility. On the whole, the analysis suggests a two-pronged approach to reduce inequality in the region that combines policies aimed at improving the distribution of assets (especially education) with elements aimed at improving the capacity of the state to redistribute income through taxes and transfers.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4504.

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Date of creation: 01 Feb 2008
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Handle: RePEc:wbk:wbrwps:4504

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Keywords: Inequality; Rural Poverty Reduction; Economic Conditions and Volatility; Achieving Shared Growth; Poverty Impact Evaluation;

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References

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  16. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
  17. Lopez, Humberto & Serven, Luis, 2006. "A normal relationship ? Poverty, growth, and inequality," Policy Research Working Paper Series 3814, The World Bank.
  18. Guillermo E. Perry & Omar S. Arias & J. Humberto López & William F. Maloney & Luis Servén, 2006. "Poverty Reduction and Growth : Virtuous and Vicious Circles," World Bank Publications, The World Bank, number 6997, October.
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Citations

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Cited by:
  1. Rabindra Bhandari & Gyan Pradhan & Mukti Upadhyay, 2010. "Another empirical look at the Kuznets curve," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 3(2), pages 7-19, December.
  2. Jean-Paul Faguet & Mahvish Shami, 2008. "Fiscal policy and spatial inequality in Latin America and beyond," LSE Research Online Documents on Economics 27162, London School of Economics and Political Science, LSE Library.
  3. Raymundo M. Campos Vázquez & Andrés Hincapie & Rubén I. Rojas Valdés, 2011. "Family Income Inequality and the Role of Wives Earnings in Mexico: 1988-2010," Serie documentos de trabajo del Centro de Estudios Económicos 2011-07, El Colegio de México, Centro de Estudios Económicos.
  4. Dobado González, Rafael & García Montero, Héctor, 2010. "Colonial Origins of Inequality in Hispanic America? Some Reflections Based on New Empirical Evidence," Revista de Historia Económica, Cambridge University Press, vol. 28(02), pages 253-277, September.
  5. Carlyn Dobson & Antonio Rodríguez, 2010. "Is Corruption Really Bad for Inequality? Evidence from Latin America," Development Research Working Paper Series 02/2010, Institute for Advanced Development Studies.
  6. Jeffrey G. Williamson, 2009. "Five Centuries of Latin American Inequality," NBER Working Papers 15305, National Bureau of Economic Research, Inc.

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