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Income Inequalities in Colombia

In: The Colombian Economy and Its Regional Structural Challenges

Author

Listed:
  • Leonardo Bonilla

    (Banco de la República)

  • Luis Armando Galvis-Aponte

    (Banco de la República)

  • Andrea Otero-Cortés

    (Banco de la República)

  • Diana Ricciulli

    (Banco de la República)

Abstract

This chapter studies the determinants of changes in labor and non-labor income inequality from a microeconomic perspective to help design and formulate public policies that improve the situation of income inequalities in Colombia. The study is carried out for the nation and the 23 major cities and their metropolitan areas. The authors use a micro-decomposition methodology, which allows comparisons of income distribution changes over time. The results show that income inequality in Colombia dropped during the 2010s. Labor income accounted for most of this change. Returns to education and the stock of human capital were the main drivers of the reduction in inequalities in labor income, while non-labor income inequality also fell during this period, driven mainly by rental income.

Suggested Citation

  • Leonardo Bonilla & Luis Armando Galvis-Aponte & Andrea Otero-Cortés & Diana Ricciulli, 2023. "Income Inequalities in Colombia," Advances in Spatial Science, in: Eduardo A. Haddad & Jaime Bonet & Geoffrey J. D. Hewings (ed.), The Colombian Economy and Its Regional Structural Challenges, chapter 0, pages 37-75, Springer.
    • Handle: RePEc:spr:adspcp:978-3-031-22653-3_3
    DOI: 10.1007/978-3-031-22653-3_3
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    References listed on IDEAS

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    1. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
    2. Ligia Alba Melo-Becerra & Jorge Enrique Ramos-Forero & Pedro Oswaldo Hernández-Santamaría, 2017. "La educación superior en Colombia: situación actual y análisis de eficiencia," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 78, February.
    3. Cristina Fernandez & Leonardo Villar, 2017. "The Impact of Lowering the Payroll Tax on Informality in Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 125-155, November.
    4. Jorge Llano, 2014. "Familias en Acción: la historia a la luz de sus impactos," Coyuntura Económica, Fedesarrollo, June.
    5. Leonardo Fabio Morales & Carlos Medina, 2017. "Assessing the Effect of Payroll Taxes on Formal Employment: The Case of the 2012 Tax Reform in Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 75-124, November.
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    7. Raquel Bernal & Marcela Eslava & Marcela Melendez & Alvaro Pinzon, 2017. "Switching from Payroll Taxes to Corporate Income Taxes: Firms’ Employment and Wages after the 2012 Colombian Tax Reform," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 41-74, November.
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