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The Decline in Inequality in Latin America: How Much, Since When and Why

Author

Listed:
  • Nora Lustig

    (Department of Economics, Tulane University)

  • Luis F. Lopez-Calva

    (Poverty and Gender Unit, Latin America and the Caribbean, the World Bank)

  • Eduardo Ortiz-Juarez

    (Poverty, Human Development and Millennium Development Goal Unit, Regional Bureau for Latin America and the Caribbean, United Nations Development Programme (UNDP))

Abstract

Between 2000 and 2009, the Gini coefficient declined in 13 of 17 Latin American countries for which comparable data exist. The decline was statistically significant and robust to changes in the time interval, inequality measures and data sources. In depth country studies for Argentina, Brazil, Mexico and Peru suggest that there are two phenomena which underlie this trend: (i) a fall in the premium to skilled labor (as measured by returns to education); and (ii) higher and more progressive government transfers. The fall in the premium to skills results from a combination of supply and demand factors and, in Argentina and, to a lesser extent, in Brazil, from more active labor market policies as well.

Suggested Citation

  • Nora Lustig & Luis F. Lopez-Calva & Eduardo Ortiz-Juarez, 2011. "The Decline in Inequality in Latin America: How Much, Since When and Why," Working Papers 1118, Tulane University, Department of Economics.
  • Handle: RePEc:tul:wpaper:1118
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    References listed on IDEAS

    as
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    1. The Decline in Inequality in Latin America: How Much, Since When and Why
      by maximorossi in NEP-LTV blog on 2011-05-16 19:32:20

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    Cited by:

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    2. Nathalie Chusseau & Joël Hellier, 2012. "Inequality in Emerging Countries," Working Papers hal-00993411, HAL.
    3. Kanbur, Ravi, 2012. "Does Kuznets Still Matter?," Working Papers 128794, Cornell University, Department of Applied Economics and Management.
    4. Gabriel Burdín & Mauricio de Rosa & Andrea Vigorito & Joan Vilá, 2019. "Was falling inequality in all Latin American countries a data-driven illusion? Income distribution and mobility patterns in Uruguay 2009-2016," Documentos de Trabajo (working papers) 19-30, Instituto de Economia - IECON.
    5. Siegmeier, Jan & Mattauch, Linus & Franks, Max & Klenert, David & Schultes, Anselm & Edenhofer, Ottmar, 2015. "A Public Finance Perspective on Climate Policy: Six Interactions That May Enhance Welfare," Climate Change and Sustainable Development 202119, Fondazione Eni Enrico Mattei (FEEM).
    6. Nancy Birdsall, Nora Lustig, Christian Meyer, 2013. "The Strugglers: The New Poor in Latin America?-Working Paper 337," Working Papers 337, Center for Global Development.
    7. Peter Edward, Andy Sumner, 2013. "The Geography of Inequality: Where and by How Much Has Income Distribution Changed since 1990?-Working Paper 341," Working Papers 341, Center for Global Development.
    8. Fiszbein, Ariel & Kanbur, Ravi & Yemtsov, Ruslan, 2013. "Social Protection, Poverty, and the Post-2015 Agenda," Working Papers 180070, Cornell University, Department of Applied Economics and Management.
    9. Osmani, S R, 2015. "The Growth-Equity Nexus in Bangladesh: An Analysis of Recent Experience," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 38(2), pages 1-59, June.
    10. Kanbur, Ravi, 2013. "Economic Inequality and Economic Development: Lessons and Implications of Global Experiences for the Arab World," Working Papers 180077, Cornell University, Department of Applied Economics and Management.
    11. Bird, Richard M. & Zolt, Eric M., 2015. "Fiscal Contracting in Latin America," World Development, Elsevier, vol. 67(C), pages 323-335.
    12. Azevedo, Joao Pedro & Davalos, Maria Eugenia & Diaz-Bonilla, Carolina & Atuesta, Bernardo & Castaneda, Raul Andres, 2013. "Fifteen years of inequality in Latin America : how have labor markets helped ?," Policy Research Working Paper Series 6384, The World Bank.
    13. Mathias Silva, 2016. "TIC y Desigualdad Salarial en Uruguay," Documentos de Investigacion Estudiantil (students working papers) 16-06, Instituto de Economia - IECON.
    14. Irene Brambilla & Darío Tortarolo, 2015. "Growth in Labor Earnings Across the Income. Distribution: Latin America During the 2000s," CEDLAS, Working Papers 0182, CEDLAS, Universidad Nacional de La Plata.
    15. González, Mariano & Larrú, José María, 2012. "Egalitarian aid. The impact of aid on Latin American inequality," MPRA Paper 41660, University Library of Munich, Germany.
    16. Nathalie Chusseau & Joël Hellier, 2013. "Inequality in Emerging Countries," Palgrave Macmillan Books, in: Joël Hellier & Nathalie Chusseau (ed.), Growing Income Inequalities, chapter 2, pages 48-75, Palgrave Macmillan.
    17. Peter Edward & Andy Sumner, 2013. "Inequality from a global perspective: An alternative approach," Working Papers 302, ECINEQ, Society for the Study of Economic Inequality.
    18. Carsten Hefeker & Tobias Boos & Ulrich Brand & Martin T. Braml & Barbara Fritz & Ingrid Wehr & Angelica Dominguez-Cardoza & Christoph Trebesch, 2019. "Vom Hoffnungsträger zum Problemfall: Lateinamerika verliert den Anschluss – was sind die Ursachen?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(24), pages 03-23, December.
    19. Flavia Cristina Drumond Andrade & Jeenal Deepak Mehta, 2018. "Increasing educational inequalities in self-rated health in Brazil, 1998-2013," PLOS ONE, Public Library of Science, vol. 13(4), pages 1-13, April.
    20. Andy Sumner, 2012. "The Buoyant Billions: How “Middle Class†Are the New Middle Classes in Developing Countries? (And Why Does It Matter?)," Working Papers id:5169, eSocialSciences.
    21. World Bank, 2013. "Managing Medium-Term Fiscal Challenges," World Bank Other Operational Studies 16573, The World Bank.
    22. Yang Wang, 2015. "Education Expansion and Decline in Tertiary Premium in Brazil: 1995-2013," Working Papers 1525, Tulane University, Department of Economics.

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    More about this item

    Keywords

    Income inequality; wage gap; government transfers; Latin America;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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