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Economic development and fluctuations in earnings inequality in the very long run: The evidence from Latin America 1900-2000

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  • Valpy FitzGerald

    (Oxford University, Oxford, UK)

Abstract

Latin America has the most unequal income distribution of any region in the world, yet its historical causes are poorly understood. This paper reports the first exploratory attempt to compute income distributions for the five leading Latin American economies for the whole 20th century. The methodology produces estimates of earnings dispersion for four skill groups over 1900-2000, which can be used to generate the familiar Gini coefficients. Large fluctuations in dispersion over time are found: countering claims of stability since the colonial past in the recent economic institutions literature; but supporting the findings of economic historians and development economists. An estimation model (reflecting the impact of international trade, labour quality and macroeconomic imbalances) explains the data reasonably well, with all three sets of drivers proving significant, although the measured effects are different across the five countries. The paper concludes that the skill composition of the workforce not only underpins long run trends in income distribution; but also conditions inequality fluctuations in response to exogenous shocks. Copyright © 2008 John Wiley & Sons, Ltd.

Suggested Citation

  • Valpy FitzGerald, 2008. "Economic development and fluctuations in earnings inequality in the very long run: The evidence from Latin America 1900-2000," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(8), pages 1028-1048.
  • Handle: RePEc:wly:jintdv:v:20:y:2008:i:8:p:1028-1048 DOI: 10.1002/jid.1511
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    References listed on IDEAS

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    Cited by:

    1. repec:spr:cliomt:v:11:y:2017:i:3:d:10.1007_s11698-016-0150-9 is not listed on IDEAS
    2. Pablo Astorga, 2015. "Functional Inequality in Latin America: News from the Twentieth Century," Economics Series Working Papers Number 135, University of Oxford, Department of Economics.
    3. Pablo Astorga, 2015. "Functional Inequality in Latin America: News from the Twentieth Century," Economics Series Working Papers Number 135, University of Oxford, Department of Economics.
    4. Rodríguez Weber, Javier, 2015. "Estimación de desigualdad de ingreso y otras variables relacionadas para Chile entre 1860 y 1970. Metodología y resultados obtenidos
      [Income inequality estimates for Chile between 1860 and 1970. Me
      ," MPRA Paper 68400, University Library of Munich, Germany.

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