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Income Inequality in Bolivia, Colombia, and Ecuador: Different Reasons

Author

Listed:
  • Aristizábal-Ramírez, María

    (Universidad EAFIT)

  • Canavire Bacarreza, Gustavo J

    (World Bank)

  • Jetter, Michael

    (University of Western Australia)

Abstract

This paper analyzes the individual-level determinants of wage inequality for Bolivia, Colombia, and Ecuador from 2001 to 2010. Using a rich annual data set from surveys in all three countries, we analyze wages both using conventional wage regressions and decompositions of standard Gini indices. Although popular opinion and standard Gini indices suggest Colombia to exhibit the most unequal distribution of income among these countries, our results suggest otherwise. If one assumes educational attainment to form part of one's own responsibility the Colombian income distribution appears more equal than Bolivia's or Ecuador's. In 2010, educational achievement explains over 10.9 percent of the Gini score in Colombia, 6.3 percent in Ecuador, and a mere 2.4 percent in Bolivia. Our findings show that the sources of income inequality can differ substantially across countries. Respective policy prescriptions should differ accordingly.

Suggested Citation

  • Aristizábal-Ramírez, María & Canavire Bacarreza, Gustavo J & Jetter, Michael, 2015. "Income Inequality in Bolivia, Colombia, and Ecuador: Different Reasons," IZA Discussion Papers 9210, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9210
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    References listed on IDEAS

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    Cited by:

    1. Gustavo Canavire-Bacarreza & Luis C. Carvajal-Osorio, 2020. "Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes," Journal of Labor Research, Springer, vol. 41(1), pages 128-168, June.
    2. Marina Mero-Figueroa & Emilio Galdeano-Gómez & Laura Piedra-Muñoz & Moisés Obaco, 0. "Measuring Well-Being: A Buen Vivir (Living Well) Indicator for Ecuador," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 0, pages 1-23.
    3. Andrew J. Hussey & Michael Jetter & Dianne McWilliam, 2017. "Explaining Inequality Between Countries: The Declining Role of Political Institutions," CESifo Working Paper Series 6320, CESifo.

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    More about this item

    Keywords

    income inequality; Gini coefficient; unfair inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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