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The decline in inequality in Latin America: How much, since when and why

Nora Lustig (), Luis Lopez-Calva () and Eduardo Ortiz-Juarez ()

No 211, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: Between 2000 and 2009, the Gini coefficient declined in 13 of 17 Latin American countries for which comparable data exist. The decline was statistically significant and robust to changes in the time interval, inequality measures and data sources. In depth country studies for Argentina, Brazil, Mexico and Peru suggest that there are two phenomena which underlie this trend: (i) a fall in the premium to skilled labor (as measured by returns to education); and (ii) higher and more progressive government transfers. The fall in the premium to skills results from a combination of supply and demand factors and, in Argentina—and to a lesser extent in Brazil--, from more active labor market policies as well.

Keywords: Income inequality; wage gap; government transfers; Latin America. (search for similar items in EconPapers)
JEL-codes: D31 D33 H53 J48 O15 O54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab and nep-ltv
Date: 2011
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