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Earnings Mobility in Times of Growth and Decline: Argentina from 1996 to 2003

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  • Fields, Gary S.
  • Sanchez Puerta, Maria Laura

Abstract

In recent years, the economy of Argentina has experienced both rapid economic growth and severe economic decline. In this paper, we use a series of one-year long panels to study who gained the most in pesos when the economy grew and who lost the most in pesos when the economy contracted. To answer these questions, we test two hypotheses both unconditionally and conditionally. The ?divergence of earnings? hypothesis holds that in any given year, the highest earning individuals are those who experienced the largest earnings gains or the smallest earnings losses in pesos. The ?symmetry of gains and losses? hypothesis holds that those groups that gained the most in pesos when the economy grew are those that lost the most in pesos when the economy contracted. Both hypotheses are decisively rejected in the data. Rather, we find that it is the lowest income individuals and groups who gain the most in pesos, whether in good times or in bad. Thus, the panel data analysis performed in this paper presents a picture of economic growth that is much more pro-poor than one gets from cross sectional inequality comparisons.

Suggested Citation

  • Fields, Gary S. & Sanchez Puerta, Maria Laura, 2008. "Earnings Mobility in Times of Growth and Decline: Argentina from 1996 to 2003," WIDER Working Paper Series 006, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:rp2008-06
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    References listed on IDEAS

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    1. Ana Corbacho & Mercedes Garcia-Escribano & Gabriela Inchauste, 2007. "Argentina: Macroeconomic Crisis and Household Vulnerability ," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 92-106, February.
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    Cited by:

    1. Tobias Lechtenfeld & Asmus Zoch, 2014. "Income Convergence in South Africa: Fact or Measurement Error?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 157, Courant Research Centre PEG.
    2. Paul Cichello & Hala Abou-Ali & Daniela Marotta, 2013. "What happened to real earnings in Egypt, 2008 to 2009?," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-38, December.

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    Keywords

    finance; growth; inequality; Argentina; survey; gains; losses;

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