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Calm after the Storms: Income Distribution and Welfare in Chile, 1987-94

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  • Ferreira, Francisco H G
  • Litchfield, Julie A

Abstract

After rising during most--but not all--of the 1960-85 period, inequality in Chile seems to have stabilized since around 1987. Following the stormy period of economic and political reforms of the 1970s and 1980s, no statistically significant Lorenz dominance results could be detected since 1987. Scalar measures of inequality confirm this picture of stability, but suggest a slight change in the shape of the density function, with some compression at the bottom being "compensated for" by a stretching at the top. As inequality remained broadly stable, sustained economic growth led to substantial welfare improvements and poverty reduction, according to a range of measures and with respect to three different poverty lines. Poverty mixed stochastic dominance tests confirm this result. All of these findings are robust to different choices of equivalence scales. Copyright 1999 by Oxford University Press.

Suggested Citation

  • Ferreira, Francisco H G & Litchfield, Julie A, 1999. "Calm after the Storms: Income Distribution and Welfare in Chile, 1987-94," World Bank Economic Review, World Bank Group, vol. 13(3), pages 509-538, September.
  • Handle: RePEc:oup:wbecrv:v:13:y:1999:i:3:p:509-38
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    References listed on IDEAS

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    1. Francisco H.G. Ferreira & Julie Litchfield, 1996. "Growing Apart: Inequality and Poverty Trends in Brazil in the 1980s," STICERD - Distributional Analysis Research Programme Papers 23, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    2. Ferreira, Francisco H. G. & Litchfield, Julie A., 1998. "Calm after the storms : income distribution in Chile, 1987-94," Policy Research Working Paper Series 1960, The World Bank.
    3. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
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    Cited by:

    1. Research Group, Development, 2008. "Lessons from World Bank Research on Financial Crises," Policy Research Working Paper Series 4779, The World Bank.
    2. Claudio A. Agostini & Philip H. Brown, 2010. "Inequality at Low Levels of Aggregation in Chile," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 213-226, May.
    3. 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.
    4. Furquim, Lilian de Toni & Garcia, Fernando, 2001. "Inequality and economic growth in Latin," Textos para discussão 104, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    5. Dusan Paredes, 2010. "Can NEG explains the spatial distribution of wages in developing countries? Evidence from Chile," Documentos de Trabajo en Economia y Ciencia Regional 02, Universidad Catolica del Norte, Chile, Department of Economics, revised Sep 2010.
    6. Andrés Solimano & Arístides Torche, 2008. "Income Distribution In Chile, 1987-2006: Analysis And Policy Considerations," Working Papers Central Bank of Chile 480, Central Bank of Chile.

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