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Inequality in Latin America : determinants and consequences

  • Lopez , J. Humberto
  • Perry, Guillermo

Latin America is together with Sub-Saharan Africa the most unequal region of the world. This paper documents recent inequality trends in the Latin American region, going beyond traditional measures of income inequality. The paper also reviews some of the explanations that have been put forward to understand the current situation, and discusses why reducing income inequality should be an important policy priority. In particular, the authors discuss channels through which inequality can affect growth and output volatility. On the whole, the analysis suggests a two-pronged approach to reduce inequality in the region that combines policies aimed at improving the distribution of assets (especially education) with elements aimed at improving the capacity of the state to redistribute income through taxes and transfers.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4504.

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Date of creation: 01 Feb 2008
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Handle: RePEc:wbk:wbrwps:4504
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  9. Lopez, Humberto & Serven, Luis, 2006. "A normal relationship ? Poverty, growth, and inequality," Policy Research Working Paper Series 3814, The World Bank.
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  18. Hanushek, Eric A, 1992. "The Trade-Off between Child Quantity and Quality," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 84-117, February.
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  22. Deininger, Klaus & Olinto, Pedro, 2000. "Asset distribution, inequality, and growth," Policy Research Working Paper Series 2375, The World Bank.
  23. David de Ferranti & Guillermo E. Perry & William Foster & Daniel Lederman & Alberto Valdés, 2005. "Beyond the City: The Rural Contribution to Development," World Bank Publications, The World Bank, number 7328, April.
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  25. Leibowitz, Arleen, 1974. "Home Investments in Children," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S111-S131, Part II, .
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