Vertical and Horizontal Inequality in Ecuador: The Lack of Sustainability

Ivan Gachet, Diego Grijalva (), Paúl A. Ponce and Damián Rodríguez
Additional contact information
Paúl A. Ponce: Secretaría Nacional de Planificación y Desarrollo SENPLADES
Damián Rodríguez: Université Paris 1 Panthéon-Sorbonne

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2019, vol. 145, issue 3, No 3, 900 pages

Abstract: Abstract We analyse the evolution of vertical and horizontal inequality in Ecuador in the long-run (1990–2016), as well as during and after the recent commodities boom (2005–2014). Using data from censuses, living standard measurement surveys, and employment surveys we show that Ecuador has made significant progress in reducing inequality, particularly since 2000. However, inequality has not decreased further since 2011. We argue that a key factor behind the reduction and ensuing stagnation of inequality is the dynamic of oil revenues, particularly regarding its effect on economic growth and on the financing of redistributive policies. Using the decomposition of the Gini coefficient by income source proposed by Lerman and Yitzhaki (Rev Econ Stat 67:151–156, 1985) we show that during the last decade there has been a shift away from market sources towards sources of income derived from government expenditures. Following the end of the commodities boom, this process is no longer sustainable. Indeed, we show that the underlying causes that led to the change in the sources of income started long before the end of the boom. The temporary shock following the 2008 financial crisis already affected the structure of Ecuador’s public finances and its current account. And, since around 2011, its institutions and labour market indicators have also deteriorated. We conclude that sustainable inequality reductions require improving the current institutions.

Keywords: Ecuador; Horizontal inequality; Vertical inequality; Commodities boom; Sustainability (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1007/s11205-017-1810-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:soinre:v:145:y:2019:i:3:d:10.1007_s11205-017-1810-2

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11135

DOI: 10.1007/s11205-017-1810-2

Access Statistics for this article

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement is currently edited by Filomena Maggino

More articles in Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().