More unequal or not as rich? Revisiting the Latin American exception

Mauricio De Rosa, Ignacio Flores and Marc Morgan

World Development, 2024, vol. 184, issue C

Abstract: Latin America is often portrayed as a global exception to the rising or consolidating income inequality trends of the early twenty-first century. In this paper we revisit this exceptionalism by innovatively combining harmonised surveys, social security and tax data, and national accounts for ten countries. The reconciliation of micro and macro incomes present us with a critical dilemma: either the region is more unequal or it is not as rich as officially reported. Distributing the data gaps shows a more heterogeneous region in terms of inequality trends. Falling inequality is most visible among the bottom 99%, but the trend flattens or reverses in the largest economies once the top 1% and capital incomes are better accounted for. Taxes and transfers do not alter the main picture, except when in-kind social spending is considered. These results confirm the strengths and highlight the limits of Latin America’s redistributive policies during the period.

Keywords: Inequality; Redistribution; Macroeconomic growth; Latin America (search for similar items in EconPapers)
JEL-codes: C81 D31 E01 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (5)

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Working Paper: More Unequal or Not as Rich? Revisiting the Latin American Exception (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:184:y:2024:i:c:s0305750x24002079

DOI: 10.1016/j.worlddev.2024.106737

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