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Simulating Income Distribution Changes in Bolivia: a Microeconometric Approach

Leonardo Gasparini, Mariana Marchionni and Federico Gutierrez

CEDLAS, Working Papers from CEDLAS, Universidad Nacional de La Plata

Abstract: This paper uses microeconometric simulations to characterize the distributional changes occurred in the Bolivian economy in the period 1993-2002, and to assess the potential distributional impact of various alternative economic scenarios for the next decade. Wage equations for urban and rural areas estimated by both OLS and quantile regression are the main inputs for the microsimulations. A sizeable increase in the dispersion in worker unobserved wage determinants is the main factor behind the significant increase in household income inequality in the 90s. The results of the microsimulations suggest a small poverty-reducing effect of several potential scenarios, including education upgrading, sectoral transformations, labor informality reduction, gender and race wage gap closing, and changes in the structure of the returns to education. Sustainable and vigorous productivity growth seems to be a necessary condition for Bolivia to meet the poverty Millennium Development Goal by 2015.

Keywords: distribution; Bolivia; wages; decompositions; quantile; education; MDG (search for similar items in EconPapers)
JEL-codes: C15 D31 I21 J23 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-edu, nep-lam and nep-ltv
Date: 2004-08
References: View references in EconPapers View complete reference list from CitEc
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Persistent link: https://EconPapers.repec.org/RePEc:dls:wpaper:0012

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