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Income Inequality in Latin America: Recent Decline and Prospects for Its Further Reduction

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  • Cornia Giovanni Andrea

Abstract

The paper reviews the extent of the income inequality decline that took place in Latin America in 2002-10 and then focuses on the factors that may explain such decline. These include a lowered skill premium following an expansion of secondary education among the poor, and the adoption of more equalizing tax, labour market subsidies and macro policies by a growing number of progressive governments. Finally, the paper reviews the changes in inequality during 2009-12 and discusses whether and how the recent decline can be sustained over the next decade in the context of sluggish world growth.

Suggested Citation

  • Cornia Giovanni Andrea, 2015. "Income Inequality in Latin America: Recent Decline and Prospects for Its Further Reduction," WIDER Working Paper Series 020, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2015-020
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    References listed on IDEAS

    as
    1. Ocampo, José Antonio, 2012. "The Development Implications of External Integration in Latin America," WIDER Working Paper Series 048, World Institute for Development Economic Research (UNU-WIDER).
    2. Cornia, Giovanni Andrea, 2012. "Inequality Trends and their Determinants: Latin America over 1990-2010," WIDER Working Paper Series 009, World Institute for Development Economic Research (UNU-WIDER).
    3. Bruno Martorano, 2014. "From Volatility to Stabilization: Cyclicality of Fiscal Policy in Latin America over the Last Decades," Working Papers - Economics wp2014_07.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    4. Nancy Birdsall & Nora Lustig & Darryl McLeod, 2011. "Declining Inequality in Latin America: Some Economics, Some Politics," Working Papers 1120, Tulane University, Department of Economics.
    5. Calcagno, Alfredo Fernando & Sáinz, Pedro, 1992. "En busca de otra modalidad de desarrollo," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    6. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597.
    7. Anthony P. Thirlwall, 2011. "Balance of payments constrained growth models: history and overview," PSL Quarterly Review, Economia civile, vol. 64(259), pages 307-351.
    8. repec:unu:wpaper:wp2012-08 is not listed on IDEAS
    9. Giovanni Andrea Cornia & Bruno Martorano, 2012. "Development Policies and Income Inequality in Selected Developing Regions, 1980–2010," UNCTAD Discussion Papers 210, United Nations Conference on Trade and Development.
    10. Nora Lustig & Carola Pessino & John Scott, 2013. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An Overview," Working Papers 1313, Tulane University, Department of Economics.
    11. Ewout Frankema, 2010. "The colonial roots of land inequality: geography, factor endowments, or institutions?," Economic History Review, Economic History Society, vol. 63(2), pages 418-451, May.
    12. repec:unu:wpaper:wp2012-09 is not listed on IDEAS
    13. 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.
    14. repec:unu:wpaper:wp2012-48 is not listed on IDEAS
    15. Nancy Birdsall, Nora Lustig, and Darryl McLeod, 2011. "Declining Inequality in Latin America: Some Economics, Some Politics - Working Paper 251," Working Papers 251, Center for Global Development.
    16. Cornia, Giovanni Andrea & Martorano, Bruno, 2011. "A New Fiscal Pact, Tax Policy Changes and Income Inequality," WIDER Working Paper Series 070, World Institute for Development Economic Research (UNU-WIDER).
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    Citations

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    Cited by:

    1. Leonardo Gasparini & Guillermo Cruces & Leopoldo Tornarolli, 2016. "Chronicle of a Deceleration Foretold: Income inequality in Latin America in the 2010s," CEDLAS, Working Papers 0198, CEDLAS, Universidad Nacional de La Plata.
    2. UNDP Regional Bureau for Africa, "undated". "Building an Integrated Inequality Dataset and the ÔSeven SinsÕ of Inequality Measurement in sub-Saharan Africa," UNDP Africa Policy Notes 2017-16, United Nations Development Programme, Regional Bureau for Africa.
    3. Pedro Mendes Loureiro, 2016. "Reformism, Class Conciliation And The Pink Tide: Prospects For The Working Classes Under Left-Of-Centre Governments In Latin America," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 020, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Keywords

    Education; Equality and inequality; Fiscal policy; History; Local; Income distribution;

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