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Declining inequality in Bolivia: How and Why

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  • Fortun Vargas, Jonathan M.

Abstract

Latin America has often been depicted as one of the most unequal regions in the world. However, after the rising of inequality, the figure decline dramatically starting from the year 2000. In this setting, Bolivia has been one of the poorest performers on income distribution efforts, lately, this situation has been improving. The author investigates the dynamics of this change through an analysis of household level surveys for 4 different years (2003/04, 2005, 2008 and 2009). The research applies a method of inequality decomposition– as developed by (Fields, 2003)-, this technique consists on regressing the expenditure of households against a vector of explanatory variables. The results suggest that education (more than other variables) has contributed on the reduction of inequality in Bolivia. Moreover, the sources of inequality are mainly attributed to the differences on human capital accumulation more than any other variables, such as the gender of the household head or the ethnical origin of the household. The results are in line with similar work made by other authors on the same issue (Gray-Molina, et al., 2001; Gray Molina &Yañez, 2009)

Suggested Citation

  • Fortun Vargas, Jonathan M., 2012. "Declining inequality in Bolivia: How and Why," MPRA Paper 41208, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:41208
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    References listed on IDEAS

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    1. Jose Luis Evia & Osvaldo Nina & Miguel Urquiola & Lykke Andersen & Eduardo Antelo, 1999. "Geography and Development in Bolivia: Migration, Urban and Industrial Concentration, Welfare, and Convergence: 1950-1992," Research Department Publications 3085, Inter-American Development Bank, Research Department.
    2. Michael Faye & John McArthur & Jeffrey Sachs & Thomas Snow, 2004. "The Challenges Facing Landlocked Developing Countries," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 5(1), pages 31-68.
    3. Leamer, Edward E. & Maul, Hugo & Rodriguez, Sergio & Schott, Peter K., 1999. "Does natural resource abundance increase Latin American income inequality?," Journal of Development Economics, Elsevier, vol. 59(1), pages 3-42, June.
    4. Ferreira, Francisco H.G. & Ravallion, Martin, 2008. "Global poverty and inequality : a review of the evidence," Policy Research Working Paper Series 4623, The World Bank.
    5. Juan Luis Londoño & Miguel Székely, 2000. "Persistent Poverty and Excess Inequality: Latin America, 1970-1995," Journal of Applied Economics, Universidad del CEMA, vol. 3, pages 93-134, May.
    6. Eduardo Lora, 1997. "Una década de reformas estructurales en América Latina: ¿Qué se ha reformado y cómo cuantificarlo?," Research Department Publications 4075, Inter-American Development Bank, Research Department.
    7. Stephan Klasen & Melanie Grosse & Rainer Thiele & Jann Lay & Julius Spatz & Manfred Wiebelt, 2004. "Operationalizing Pro-Poor Growth - Country Case Study: Bolivia," Ibero America Institute for Econ. Research (IAI) Discussion Papers 101, Ibero-America Institute for Economic Research.
    8. Grootaert, Christiaan & Narayan, Deepa, 2004. "Local Institutions, Poverty and Household Welfare in Bolivia," World Development, Elsevier, vol. 32(7), pages 1179-1198, July.
    9. de Janvry, Alain & Sadoulet, Elisabeth, 2000. "Growth, Poverty, and Inequality in Latin America: A Causal Analysis, 1970-94," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 267-287, September.
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    Cited by:

    1. Gustavo Canavire-Bacarreza & Fernando Rios-Avila, 2015. "On the Determinants of Changes in Wage Inequality in Bolivia," Economics Working Paper Archive wp_835, Levy Economics Institute.
    2. repec:aru:wpaper:201304 is not listed on IDEAS
    3. Oscar Molina Tejerina & Luis Castro Peñarrieta, 2020. "Unexplained Wage Gaps in the Tradable and Nontradable Sectors: Cross-Sectional Evidence by Gender in Bolivia," Investigación & Desarrollo 0120, Universidad Privada Boliviana, revised Nov 2020.
    4. Eid, Ahmed & Aguirre, Rodrigo, 2013. "Tendencias en desigualdad de ingreso y consumo en Bolivia: un cuento de hadas de gigantes empequeñeciendo y enanos. en crecimiento," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 20, pages 75-110, Noviembre.

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    More about this item

    Keywords

    Economic Development; Inequality; Income Distribution; Bolivia;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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