The Distribution of Income in Central America

Thomas (Tim) Gindling and Juan Diego Trejos ()
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Juan Diego Trejos: University of Costa Rica

No 7236, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We document changes in income and earnings inequality in the five Central American countries from the early 1990s to 2009. In the 1990s Costa Rica had the most equal distribution of income in Central America, and one of the most equal distributions of income in Latin America. At the other extreme, Guatemala, Honduras and Nicaragua were among the most unequal countries in Latin America. Inequality in El Salvador was between these extremes. Then, in the first decade of the 21st century inequality in El Salvador and Nicaragua decreased while inequality in Costa Rica, Guatemala and Honduras increased. By 2009 levels of inequality in El Salvador and Nicaragua were similar to those in Costa Rica. In this paper, we examine why income and earning inequality differs between the five Central American countries, and why inequality decreased in El Salvador and Nicaragua but increased in Costa Rica, Guatemala and Honduras.

Keywords: Central America; income inequality; labour income (search for similar items in EconPapers)
JEL-codes: J31 O15 O54 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-02
New Economics Papers: this item is included in nep-dev, nep-lam and nep-ltv
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Published - revised version published in: Salvador Marti i Puig; Diego Sanchez-Ancochea (eds.), The Handbook of Central American Governance, London: Routledge, 2014, 75-94.

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Working Paper: The distribution of income in Central America (2013)
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