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Characterization of inequality changes through microeconometric decompositions. The case of Greater Buenos Aires

Author

Listed:
  • Leonardo Gasparini
  • Mariana Marchionni
  • Walter Sosa Escudero

Abstract

We apply a variant of the microeconometric decomposition methodology proposed in Bourguignon et al. (1998) to assess the relevance of various factors that affected inequality in the period 1986-1998 in the Greater Buenos Aires area. The results of the paper suggest that the small change in inequality between 1986 and 1992 was the result of mild forces that compensated each other. In contrast, between 1992 and 1998 nearly all factors had some role in increasing inequality to unprecedented levels. The increase in the returns to education, changes in endowments of unobservable factors and their remunerations, and the fall in hours of work by low-income people are particularly important to explain the growth in inequality in the nineties. In contrast, although Argentina witnessed dramatic changes in the gender wage gap, the unemployment rate and the educational structure, these factors appear to have had only a mild effect on the household income distribution.

Suggested Citation

  • Leonardo Gasparini & Mariana Marchionni & Walter Sosa Escudero, 2000. "Characterization of inequality changes through microeconometric decompositions. The case of Greater Buenos Aires," Department of Economics, Working Papers 025, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
  • Handle: RePEc:lap:wpaper:025
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    File URL: http://www.depeco.econo.unlp.edu.ar/doctrab/doc25.pdf
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    References listed on IDEAS

    as
    1. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
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    Keywords

    C15; D31; I21; J23; J31;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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