IDEAS home Printed from https://ideas.repec.org/p/tul/wpaper/1118.html

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
    as

    Download full text from publisher

    File URL: http://repec.tulane.edu/RePEc/pdf/tul1118.pdf
    File Function: First version, 2011
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:wbk:wbpubs:2580 is not listed on IDEAS
    2. Saavedra-Chanduví, Jaime & Molinas, José R. & De Barros, Ricardo Paes & Ferreira, Francisco H. G., 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 361.
    3. Stark, Oded & Taylor, J Edward & Yitzhaki, Shlomo, 1986. "Remittances and Inequality," Economic Journal, Royal Economic Society, vol. 96(383), pages 722-740, September.
    4. Ricardo Paes de Barros & Francisco H.G. Ferreira & Jose R. Molinas Vega & Jaime Saavedra Chanduvi, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2580, September.
    5. repec:wbk:wbpubs:2597 is not listed on IDEAS
    6. repec:idb:brikps:60098 is not listed on IDEAS
    7. Phillippe Leite & Matthew Wai-Poi & Francisco H.G. Ferreira, 2007. "Trade Liberalization, Employment Flows and Wage Inequality in Brazil," WIDER Working Paper Series RP2007-58, World Institute for Development Economic Research (UNU-WIDER).
    8. repec:wbk:wbpubs:14844 is not listed on IDEAS
    9. Marco Manacorda & Carolina Sanchez-Paramo & Norbert Schady, 2010. "Changes in Returns to Education in Latin America: The Role of Demand and Supply of Skills," ILR Review, Cornell University, ILR School, vol. 63(2), pages 307-326, January.
    10. Guillermo Cruces & Leonardo Gasparini, 2008. "A Distribution in Motion: The Case of Argentina," CEDLAS, Working Papers 0078, CEDLAS, Universidad Nacional de La Plata.
    11. repec:wbk:wbpubs:15009 is not listed on IDEAS
    12. Leonardo Gasparini & Guillermo Cruces & Leopoldo Tornarolli & Mariana Marchionni, 2009. "A Turning Point? Recent Developments on Inequality in Latin America and the Caribbean," CEDLAS, Working Papers 0081, CEDLAS, Universidad Nacional de La Plata.
    13. repec:wbk:wbpubs:13263 is not listed on IDEAS
    14. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lustig, Nora & Lopez-Calva, Luis F. & Ortiz-Juarez, Eduardo, 2013. "Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico," World Development, Elsevier, vol. 44(C), pages 129-141.
    2. Nora Lustig & Jaime Ros, 2011. "Latin America's Economic Challenges: Lessons for Emerging Economies," Working Papers 1112, Tulane University, Department of Economics.
    3. Gerardo Esquivel, 2011. "The Dynamics of Income Inequality in Mexico since NAFTA," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2011), pages 155-188.
    4. Gasparini, Leonardo & Galiani, Sebastian & Cruces, Guillermo & Acosta, Pablo A., 2011. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990-2010," IZA Discussion Papers 6244, IZA Network @ LISER.
    5. Harinder Kohli & Claudio Loser & Anil Sood (ed.), 2013. "Latin America 2040 — Breaking Away from Complacency: An Agenda for Resurgence — Second Edition," Books, Emerging Markets Forum, edition 2, number latam2040v2, September.
    6. Arabage, Amanda Cappellazzo & Souza, André Portela Fernandes de, 2015. "Labor earnings dynamics in post-stabilization Brazil," Textos para discussão 390, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    7. Márton Medgyesi & Temesváry, Z., 2013. "GINI DP 84: Conditional cash transfers in high- income OECD countries and their effects on human capital accumulation," GINI Discussion Papers 84, AIAS, Amsterdam Institute for Advanced Labour Studies.
    8. Atamanov, AZIZ & Cuevas, Facundo & Lebow, Jeremy, 2024. "People in Africa face an unlevel playing field for building their productive capacity," MPRA Paper 124047, University Library of Munich, Germany.
    9. Jawad Rahim Afridi & Sajjad Ahmad Jan, 2024. "Assessment of Inequality of Opportunity in Access to Maternal Healthcare Services in Khyber Pakhtunkhwa, Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 870-876.
    10. Dante Contreras & Osvaldo Larrañaga & Esteban Puentes & Tomás Rau, 2014. "Improving the Measurement of the Relationship between Opportunities and Income: Evidence from Longitudinal Data from Chile," Development Policy Review, Overseas Development Institute, vol. 32(2), pages 219-237, March.
    11. Liliana Cano, 2015. "Income Mobility in Ecuador: New Evidence from Individual Income Tax Returns," WIDER Working Paper Series wp-2015-040, World Institute for Development Economic Research (UNU-WIDER).
    12. Ashish Singh, 2011. "Inequality of Opportunity in Indian Children: The Case of Immunization and Nutrition," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 30(6), pages 861-883, December.
    13. Ravi Kanbur & Adam Wagstaff, 2016. "How Useful Is Inequality of Opportunity as a Policy Construct?," International Economic Association Series, in: Kaushik Basu & Joseph E. Stiglitz (ed.), Inequality and Growth: Patterns and Policy, chapter 4, pages 131-150, Palgrave Macmillan.
    14. Liliana Cano, 2015. "Income mobility in Ecuador: New evidence from individual income tax returns," WIDER Working Paper Series 040, World Institute for Development Economic Research (UNU-WIDER).
    15. Ravi Kanbur, 2017. "Citizenship, Migration and Opportunity," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 18(4), pages 429-441, October.
    16. repec:aru:wpaper:201304 is not listed on IDEAS
    17. Ferreira, Francisco H. G. & Brunori, Paolo & Neidhöfer, Guido & Salas-Rojo, Pedro & Sirugue, Louis, 2025. "Inherited inequality in Latin America," LSE Research Online Documents on Economics 130163, London School of Economics and Political Science, LSE Library.
    18. Sarmiento Espinel, Jaime Andrés & Silva Arias, Adriana Carolina & van Gameren, Edwin, 2019. "Evolution of the inequality of educational opportunities from secondary education to university," International Journal of Educational Development, Elsevier, vol. 66(C), pages 193-202.
    19. Alejandro Herrera Jiménez & Horacio Villegas Quino, 2016. "Circumstances and Determination of Individual Outcomes in Bolivia: Family Background and Equality of Opportunities (2003-2013)," Documentos de trabajo 1/2016, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    20. Giang, Long Thanh & Nguyen, Cuong Viet, 2017. "How would cash transfers improve child welfare in Viet Nam?," Children and Youth Services Review, Elsevier, vol. 82(C), pages 87-98.
    21. Nora Lustig, 2015. "Fiscal Policy and Ethno-Racial Inequality in Bolivia, Brazil, Guatemala and Uruguay," Commitment to Equity (CEQ) Working Paper Series 22, Tulane University, Department of Economics.

    More about this item

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Nora Lustig in Wikipedia Spanish

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tul:wpaper:1118. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nicholas Lacoste (email available below). General contact details of provider: https://edirc.repec.org/data/detulus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.