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

21 Pages Posted: 21 Jul 2012

See all articles by Nora Lustig

Nora Lustig

Tulane University

Luis Felipe López-Calva

World Bank

Eduardo Ortiz-Juarez

UNDP - Regional Bureau for Latin America and the Caribbean

Date Written: April 24, 2011

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.

Keywords: Income inequality, wage gap, government transfers, Latin America

JEL Classification: O15, H53, J48

Suggested Citation

Lustig, Nora Claudia and Lopez-Calva, Luis Felipe and Ortiz-Juarez, Eduardo, The Decline in Inequality in Latin America: How Much, Since When and Why (April 24, 2011). Available at SSRN: https://ssrn.com/abstract=2113476 or http://dx.doi.org/10.2139/ssrn.2113476

Nora Claudia Lustig (Contact Author)

Tulane University ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

Luis Felipe Lopez-Calva

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

Eduardo Ortiz-Juarez

UNDP - Regional Bureau for Latin America and the Caribbean ( email )

One United Nations Plaza
New York, NY 10017
United States
2129065892 (Phone)

HOME PAGE: http://www.undp.org/rblac/

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