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Income inequality in Latin America: Recent decline and prospects for its further reduction

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  • Giovanni Andrea Cornia

    (Dipartimento di Scienze per l'Economia e l'Impresa)

Abstract

The paper reviews the extent of the income inequality decline which has taken place in Latin America over 2002-10 which reduced the regional Gini index to the level of the early 1980s. The paper then focuses on the factors which may explain such decline. These include a drop in the skill premium following an expansion of secondary education, the adoption of a new development model by a growing number of progressive goverments which adopted prudent but more equitable macroeconomic, tax, social assistance and labour policies. For the region as a whole, gains in terms of trade, remittances, FDI and world growth played an important but not determinant role though their impact was perceptible in countries where such shocks were sizeable. Finally, the paper reviews the changes in inequality during the difficult years 2009-12 and discusses whether and how the recent decline can be sustained over the next decade in the context of sluggish world growth.

Suggested Citation

  • Giovanni Andrea Cornia, 2014. "Income inequality in Latin America: Recent decline and prospects for its further reduction," Working Papers - Economics wp2014_14.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2014_14.rdf
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    Cited by:

    1. Jaerim Choi & Ivan Rivadeneyra & Kenia Ramirez, 2021. "Labor Market Effects of a Minimum Wage: Evidence from Ecuadorian Monthly Administrative Data," CESifo Working Paper Series 8987, CESifo.
    2. 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.
    3. Leonardo Gasparini & Guillermo Cruces & Leopoldo Tornarolli, 2016. "Chronicle of a Deceleration Foretold: Income inequality in Latin America in the 2010s," CEDLAS, Working Papers 0198, CEDLAS, Universidad Nacional de La Plata.
    4. Leonardo Gasparini, 2019. "La Desigualdad en su Laberinto: Hechos y Perspectivas sobre Desigualdad de Ingresos en América Latina," CEDLAS, Working Papers 0256, CEDLAS, Universidad Nacional de La Plata.
    5. UNDP Regional Bureau for Africa & Bruno Martorano & Giovanni Andrea Cornia, "undated". "Building an Integrated Inequality Dataset and the Seven Sins of Inequality Measurement in sub-Saharan Africa," UNDP Africa Policy Notes 2017-16, United Nations Development Programme, Regional Bureau for Africa.
    6. Pedro Mendes Loureiro, 2016. "Reformism, Class Conciliation And The Pink Tide: Prospects For The Working Classes Under Left-Of-Centre Governments In Latin America," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 020, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    7. repec:rac:ecchap:2017-16 is not listed on IDEAS
    8. Cornia, Giovanni Andrea & Martorano, Bruno, "undated". "Income Inequality Trends in sub-Saharan Africa: Divergence, determinants and consequences: Building an Integrated Inequality Dataset and the ‘Seven Sins’ of Inequality Measurement in Sub-Saharan Africa," UNDP Africa Reports 267776, United Nations Development Programme (UNDP).

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