Income inequality in Latin America: Recent decline and prospects for its further reduction

Giovanni Cornia

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: The paper reviews the extent of the income inequality decline which has taken place in Latin America over 2002-10 which reduced the regional Gini index to the level of the early 1980s. The paper then focuses on the factors which may explain such decline. These include a drop in the skill premium following an expansion of secondary education, the adoption of a new development model by a growing number of progressive goverments which adopted prudent but more equitable macroeconomic, tax, social assistance and labour policies. For the region as a whole, gains in terms of trade, remittances, FDI and world growth played an important but not determinant role though their impact was perceptible in countries where such shocks were sizeable. Finally, the paper reviews the changes in inequality during the difficult years 2009-12 and discusses whether and how the recent decline can be sustained over the next decade in the context of sluggish world growth.

Pages: 28 pages
Date: 2014
New Economics Papers: this item is included in nep-lam and nep-pbe
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Income Inequality in Latin America: Recent Decline and Prospects for Its Further Reduction (2015)
Working Paper: Income inequality in Latin America. Recent decline and prospects for its further reduction (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:frz:wpaper:wp2014_14.rdf

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